A termsheet had already been drawn up by the government and presented even before last Thursday's hearing. The creditors saw it for the first time on that day as it had been negotiated without them up to that point- This was before Trump's later comments about the DPA. Not sure what the hold-up is now, assuming the creditors and bondholders reach an agreement presumably the final hurdle is to figure out some other legal mechanism in which to push this through.

In any case, payroll will be due Wednesday and if liquidation is in the works then I'd imagine they'd want to pull the plug by then.

 

Still negotiating trying to get bond holders on board

https://x.com/krisvancleave/status/2...017481068?s=46

 

The merger was anti competitive, and got blocked.

Jetblue themselves said spirit was their biggest threat. A spirit frontier merger wouldve destroyed jetblue. So jetblue attempted a hostile takeover.

A lcc absorbing a ulcc to eliminate a competitor

Blocked by the US court, not biden

 

Such is the way the chips fall. If you want to have a beach session about the seniority system and lack of career portability in our chosen field, I’m right there with you.

 

Biden admin brought on a lawsuit that didn’t need to happen, but the autopen was hijacked by the radical left part of his party.

 

Those two have the same exact problem. You can't come up with $2.5 billion any easier than coming up with $500 million. You can't just spend money without a legal framework, or congressional action.
And everyone knows DPA aint it.

 

But Spirit was not making money as a ULCC. There was too much competition of cheap seats. So they needed to reduce competition by merging. The alternative is failing. It’s now a failed business model because the government didn’t want Spirit to go away. They were trying to pivot, and were blocked, because the government wanted the cheap seats despite it not being profitable. The die was cast when the judge ruled in favor of DOJ.

 

Here's the info "..two of the three Spirit creditor groups are on board with the government's offer of up to a $500M lifeline. The unsecured creditors and the revolving creditors are in. The bondholders have not yet committed."

The bondholders are currently in first position in a liquidation. If they agree to the term sheet they'd get crammed down and the Government would get their $500M back before bondholders get a penny. Its pretty obvious that unsecured and revolving creditors are ok with it because they would be totally wiped out anyway. At least this gives them a shot if this ends up surviving. I wonder what would cause the bondholders to get nothing and just give up the chance to recoup their losses?

Especially if the Government is taking a 90% ownership stake.

OK I think I get it now. The bondholders will get their $450M DIP money back, but likely no chance to recoup any of their $2B in debt since the Government would own the airline. The only issue is that with the money going out the door this only gives them a few weeks to a few months of cash. So it kicks the can down the road.

 

Revolving creditors don't get wiped out, I believe they are as good as secured creditors, with liens on planes, engines, spare parts etc. They are largely represented by Citibank. Not quite but close to 100% recovery. Unsecured creditors of course are on board with anything that's not liquidating, where they get near 0%.

Bondholders are led by Ken Griffin's Citadel and other hedge funds. I'd imagine in refurn for that govt stake they'd want a pretty chunk of that 500mil or some other favors.

I hear late yesterday night a Citadel owned Global 6000, N68KJ arrived in FLL.

 

And didn’t Franke land in FLL Saturday night?