Spirit Now Sure As It Emerges From Bankruptcy
09-08-2025 | 10:38 AM
#1751
Banned
Joined: Jul 2023
Posts: 633
Likes: 32
The termination of the GA Telesis deal is bad news for Spirit’s bondholders, because it wipes out a $520 million liquidity lifeline they were counting on to strengthen Spirit’s position in bankruptcy. With less cash, creditors lose flexibility and bargaining power.
But if you’re not worried about bondholder recoveries — and your priority is just seeing Spirit sold, or forcing them to accept whatever lowball bid Frontier (Frankie) puts on the table — then it actually helps. Spirit has fewer options to resist and may be compelled to take the deal.
But if you’re not worried about bondholder recoveries — and your priority is just seeing Spirit sold, or forcing them to accept whatever lowball bid Frontier (Frankie) puts on the table — then it actually helps. Spirit has fewer options to resist and may be compelled to take the deal.
09-08-2025 | 10:46 AM
#1752
Line Holder
Joined: Sep 2020
Posts: 1,564
Likes: 343
The termination of the GA Telesis deal is bad news for Spirit’s bondholders, because it wipes out a $520 million liquidity lifeline they were counting on to strengthen Spirit’s position in bankruptcy. With less cash, creditors lose flexibility and bargaining power.
But if you’re not worried about bondholder recoveries — and your priority is just seeing Spirit sold, or forcing them to accept whatever lowball bid Frontier (Frankie) puts on the table — then it actually helps. Spirit has fewer options to resist and may be compelled to take the deal.
But if you’re not worried about bondholder recoveries — and your priority is just seeing Spirit sold, or forcing them to accept whatever lowball bid Frontier (Frankie) puts on the table — then it actually helps. Spirit has fewer options to resist and may be compelled to take the deal.
Frontier isn't going to take over Spirit's liabilities. The BK administrator doesn't just "wipe out debt" so some other airline can get a sweet deal. Spirit "taking the deal" doesn't include just super diluting its financial responsibilities. The people that loaned money will all get paid.
This isn't waying Frontier won't take on all that debt, but why would they do it? Trying to carry that $1B a year operating loss going forward would crush them.
09-08-2025 | 11:07 AM
#1753
Banned
Joined: Jul 2023
Posts: 633
Likes: 32
The problem is those bond holders now have secured debt. So the $2.1B total they are owed now needs to get paid from sales of other assets. This gets paid before wages. So that $512M would have gone a long way to cover them.
Frontier isn't going to take over Spirit's liabilities. The BK administrator doesn't just "wipe out debt" so some other airline can get a sweet deal. Spirit "taking the deal" doesn't include just super diluting its financial responsibilities. The people that loaned money will all get paid.
This isn't waying Frontier won't take on all that debt, but why would they do it? Trying to carry that $1B a year operating loss going forward would crush them.
Frontier isn't going to take over Spirit's liabilities. The BK administrator doesn't just "wipe out debt" so some other airline can get a sweet deal. Spirit "taking the deal" doesn't include just super diluting its financial responsibilities. The people that loaned money will all get paid.
This isn't waying Frontier won't take on all that debt, but why would they do it? Trying to carry that $1B a year operating loss going forward would crush them.
09-08-2025 | 11:23 AM
#1754
Line Holder
Joined: Sep 2020
Posts: 1,564
Likes: 343
09-08-2025 | 02:53 PM
#1756
Gets Weekends Off
Joined: Mar 2014
Posts: 4,114
Likes: 291
If you transfer funds electronically to another bank account, there would be a paper trail.
I would probably just withdraw the money as cash and deposit it into another account unrelated to your paycheck account. Keep in mind the $10k limit and potential structuring issues.
I would probably just withdraw the money as cash and deposit it into another account unrelated to your paycheck account. Keep in mind the $10k limit and potential structuring issues.
09-08-2025 | 04:45 PM
#1759
Bent over by buybacks
Joined: Feb 2017
Posts: 1,569
Likes: 519
09-08-2025 | 05:18 PM
#1760
Line Holder
Joined: Sep 2017
Posts: 1,169
Likes: 164
From: NK CA
- “Bondholders now have secured debt… $2.1B must be paid from sales of other assets” — Incorrect as stated.
- Secured creditors are paid from their collateral’s value, not automatically from “other assets.” If an asset isn’t in their collateral package, they don’t jump ahead of everyone on it. [url alt="https://www.uscourts.gov/court-programs/bankruptcy/bankruptcy-basics/chapter-11-bankruptcy-basics?utm_source=chatgpt.com"=https://www.uscourts.gov/court-programs/bankruptcy/bankruptcy-basics/chapter-11-bankruptcy-basics?utm_source=chatgpt.com]United States Courts[/url]
- Some Spirit noteholders were already secured pre-petition; there’s no blanket order converting all bond debt into secured claims. (Adequate-protection liens, if granted, don’t turn every bond into a first-priority claim on all assets.)
- Secured creditors are paid from their collateral’s value, not automatically from “other assets.” If an asset isn’t in their collateral package, they don’t jump ahead of everyone on it. [url alt="https://www.uscourts.gov/court-programs/bankruptcy/bankruptcy-basics/chapter-11-bankruptcy-basics?utm_source=chatgpt.com"=https://www.uscourts.gov/court-programs/bankruptcy/bankruptcy-basics/chapter-11-bankruptcy-basics?utm_source=chatgpt.com]United States Courts[/url]
- “This gets paid before wages” — Wrong (for your paycheck).
- Post-petition wages/benefits are administrative expenses paid currently under the court-approved budget. Cash collateral can be used to fund payroll only with consent/court order and adequate protection for secured parties—but employees still get paid during the case. [url alt="https://www.uscourts.gov/court-programs/bankruptcy/bankruptcy-basics/chapter-11-bankruptcy-basics?utm_source=chatgpt.com"=https://www.uscourts.gov/court-programs/bankruptcy/bankruptcy-basics/chapter-11-bankruptcy-basics?utm_source=chatgpt.com]United States Courts[/url][url alt="https://www.law.cornell.edu/uscode/text/11/503?utm_source=chatgpt.com"=https://www.law.cornell.edu/uscode/text/11/503?utm_source=chatgpt.com]Legal Information Institute[/url]
- Pre-petition wages have priority status (capped) ahead of general unsecured claims. Secured creditors still have first claim on their collateral, but not on everything. [url alt="https://www.law.cornell.edu/uscode/text/11/507?utm_source=chatgpt.com"=https://www.law.cornell.edu/uscode/text/11/507?utm_source=chatgpt.com]Legal Information Institute[/url]
- Post-petition wages/benefits are administrative expenses paid currently under the court-approved budget. Cash collateral can be used to fund payroll only with consent/court order and adequate protection for secured parties—but employees still get paid during the case. [url alt="https://www.uscourts.gov/court-programs/bankruptcy/bankruptcy-basics/chapter-11-bankruptcy-basics?utm_source=chatgpt.com"=https://www.uscourts.gov/court-programs/bankruptcy/bankruptcy-basics/chapter-11-bankruptcy-basics?utm_source=chatgpt.com]United States Courts[/url][url alt="https://www.law.cornell.edu/uscode/text/11/503?utm_source=chatgpt.com"=https://www.law.cornell.edu/uscode/text/11/503?utm_source=chatgpt.com]Legal Information Institute[/url]
- “Frontier isn’t going to take over Spirit’s liabilities” — Largely correct (in a 363 sale).
- A buyer can purchase assets “free and clear” of most liens/claims under §363(f), choosing which contracts to assume (with cure) and leaving legacy liabilities behind. That’s exactly what 363 is for. [url alt="https://www.goodwinlaw.com/en/insights/publications/2024/05/insights-finance-frg-top-10-questions-about-bankruptcy-sales?utm_source=chatgpt.com"=https://www.goodwinlaw.com/en/insights/publications/2024/05/insights-finance-frg-top-10-questions-about-bankruptcy-sales?utm_source=chatgpt.com]Goodwin[/url][url alt="https://www.mayerbrown.com/en/insights/publications/2025/04/section-363-sales-considerations?utm_source=chatgpt.com"=https://www.mayerbrown.com/en/insights/publications/2025/04/section-363-sales-considerations?utm_source=chatgpt.com]Mayer Brown[/url]
- A buyer can purchase assets “free and clear” of most liens/claims under §363(f), choosing which contracts to assume (with cure) and leaving legacy liabilities behind. That’s exactly what 363 is for. [url alt="https://www.goodwinlaw.com/en/insights/publications/2024/05/insights-finance-frg-top-10-questions-about-bankruptcy-sales?utm_source=chatgpt.com"=https://www.goodwinlaw.com/en/insights/publications/2024/05/insights-finance-frg-top-10-questions-about-bankruptcy-sales?utm_source=chatgpt.com]Goodwin[/url][url alt="https://www.mayerbrown.com/en/insights/publications/2025/04/section-363-sales-considerations?utm_source=chatgpt.com"=https://www.mayerbrown.com/en/insights/publications/2025/04/section-363-sales-considerations?utm_source=chatgpt.com]Mayer Brown[/url]
- “…the BK administrator doesn’t ‘wipe out debt’ so another airline gets a sweet deal” — Misstated.
- There’s no “administrator” in Chapter 11; Spirit remains debtor-in-possession. The court can confirm a plan that impairs/equitizes debt or approve free-and-clear sales. Creditors are not guaranteed par; recoveries depend on sale proceeds/plan value and priority. [url alt="https://www.uscourts.gov/court-programs/bankruptcy/bankruptcy-basics/chapter-11-bankruptcy-basics?utm_source=chatgpt.com"=https://www.uscourts.gov/court-programs/bankruptcy/bankruptcy-basics/chapter-11-bankruptcy-basics?utm_source=chatgpt.com]United States Courts[/url][url alt="https://www.law.cornell.edu/uscode/text/11/363?utm_source=chatgpt.com"=https://www.law.cornell.edu/uscode/text/11/363?utm_source=chatgpt.com]Legal Information Institute[/url]
- There’s no “administrator” in Chapter 11; Spirit remains debtor-in-possession. The court can confirm a plan that impairs/equitizes debt or approve free-and-clear sales. Creditors are not guaranteed par; recoveries depend on sale proceeds/plan value and priority. [url alt="https://www.uscourts.gov/court-programs/bankruptcy/bankruptcy-basics/chapter-11-bankruptcy-basics?utm_source=chatgpt.com"=https://www.uscourts.gov/court-programs/bankruptcy/bankruptcy-basics/chapter-11-bankruptcy-basics?utm_source=chatgpt.com]United States Courts[/url][url alt="https://www.law.cornell.edu/uscode/text/11/363?utm_source=chatgpt.com"=https://www.law.cornell.edu/uscode/text/11/363?utm_source=chatgpt.com]Legal Information Institute[/url]
- “The people that loaned money will all get paid” — Usually false.
- In real Chapter 11s, many lenders/bondholders take haircuts or equity; some classes recover less than 100¢, sometimes far less. Secureds can credit-bid to prevent fire-sale pricing, but that still doesn’t ensure par. [url alt="https://www.crowell.com/en/insights/client-alerts/credit-bidding-a-sword-and-a-shield?utm_source=chatgpt.com"=https://www.crowell.com/en/insights/client-alerts/credit-bidding-a-sword-and-a-shield?utm_source=chatgpt.com]Crowell & Moring - Home[/url]
- In real Chapter 11s, many lenders/bondholders take haircuts or equity; some classes recover less than 100¢, sometimes far less. Secureds can credit-bid to prevent fire-sale pricing, but that still doesn’t ensure par. [url alt="https://www.crowell.com/en/insights/client-alerts/credit-bidding-a-sword-and-a-shield?utm_source=chatgpt.com"=https://www.crowell.com/en/insights/client-alerts/credit-bidding-a-sword-and-a-shield?utm_source=chatgpt.com]Crowell & Moring - Home[/url]
- “Frontier would have to carry a $1B/yr operating loss” — Not how buyers model it.
- In an asset deal, the buyer isn’t buying the old P&L. They take selected aircraft/gates/routes, reject money-losing pieces, and run a new schedule and cost base. Past losses don’t automatically follow them. (That’s the point of 363 and plan tools.) [url alt="https://www.mayerbrown.com/en/insights/publications/2025/04/section-363-sales-considerations?utm_source=chatgpt.com"=https://www.mayerbrown.com/en/insights/publications/2025/04/section-363-sales-considerations?utm_source=chatgpt.com]Mayer Brown[/url]
- In an asset deal, the buyer isn’t buying the old P&L. They take selected aircraft/gates/routes, reject money-losing pieces, and run a new schedule and cost base. Past losses don’t automatically follow them. (That’s the point of 363 and plan tools.) [url alt="https://www.mayerbrown.com/en/insights/publications/2025/04/section-363-sales-considerations?utm_source=chatgpt.com"=https://www.mayerbrown.com/en/insights/publications/2025/04/section-363-sales-considerations?utm_source=chatgpt.com]Mayer Brown[/url]
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