Chapter 11, Regional Carrier Silver Airways, which has been operating year-round under bankruptcy protection, may find buyers who can acquire more cash and additional time to terminate their restructuring plans and take over a company that has served Florida, the Bahamas and the Caribbean for over a decade.
The Fort Lauderdale-based airline, whose Florida route network has diminished to five cities, filed a bankruptcy petition on December 30th last year. Upon filing, Silver Management wrote an open letter to its clients, saying, “We expect to complete this process by the first quarter of 2025.”
However, the first quarter came and the viewing deal was not on the horizon. And, if there are no interested buyers, the airline is under pressure from creditors who want to be paid for services provided during the Chapter 11 bankruptcy proceedings. The case has been assigned to US bankruptcy judge Peter Rassin in Fort Lauderdale.
Court records show that since filing, the silver fleet has been cut in half, with its staff down from over 600 to 448. And the US fiduciary office, which is tasked with protecting creditors’ rights, asked the judge to dismiss the case on the grounds that there are few indications that the reorganization could be successful.
The court file is packed with requests from creditors such as airport authorities, aircraft owners, and fuel providers who want to pay the fees provided after Silver and Seaborn enter bankruptcy court.
Positive signs
However, during a court hearing Thursday, Judge Rasin approved the airline’s request to extend the period in which businesses have an exclusive right to plan bankruptcy organizations and obtain creditor approval. The original period expires on April 29th. The deadline for submission of the plan is June 28th. The date for obtaining creditor assistance is August 27th.
The judge received a $5.5 million loan to fund day-to-day operations and help pay creditors after acted after a Greenwich, Connecticut lender called Kia II LLC.
Silver’s lawyer Michael Holbein told the court that no one has made any progress in filing a competing plan to take over the company.
Meanwhile, Silver serves only five Florida cities after dropping Orlando last month. From Operation Hub at Fort Lauderdale Hollywood International Airport, Silver offers flights to Key West. Tampa, Tallahassee, Pensacola.
The airline also serves several destinations in the Bahamas, including Bimini and Freeport. From San Juan, Puerto Rico, the airline website lists flights from St. Martin, St. Kitts, Tortola, St. Thomas and St. Croix. The website’s map shows Seaborne, a subsidiary operating under Chapter 11, flying between two enclaves in the US Virgin Islands.
Cash burn
But in a motion to dismiss the case filed April 10, written before the new loan money arrived, the US trustee’s office effectively told the court that there is little prospect of a recovery for Caribbean silver and its floating affiliates.
“Debtors may have been able to project and earn weekly receipts over $2,000,000 over the previous period, but the debtors do not believe that the size of their fleet would be reduced by half and such reductions would equally reduce the debtor’s already negative cash flow, if not hamstrings.”
A company spokesman did not respond to an email request on Thursday to comment on the trustee’s claim.
According to the allegations, the value of Silver’s assets was only $90 million when filed in Chapter 11.
However, the property is “completely hampered by the secured creditor’s lien,” the trustee said. The creditors are led by New York Brigade Capital Management, Argent Funding, LLC, St. Louis Asset Management Company, Argent Capital, and LLC, a Delaware company belonging to Verant Svi Funding, LLC, and Versa Capital in Philadelphia.
Total lien: $400 million.
A hearing regarding the fiduciary filing motion is set for May 7th.
Original issue: April 25th, 2025 8am EDT
