When Silver Airways lawyers and executives entered the courtroom this week for US bankruptcy judge Peter Rassin, they ultimately felt they had a clear path to wrap up the Chapter 11 reorganization case of a struggling career.
They signed a $5.75 million “stalking horse” bid with a company with a long history of investing in troubled airlines. They also notified the judge that another buyer had signed a letter of intent to acquire Seaborne for $4 million. No Seaborne buyers have been identified.
However, at a hearing Wednesday at U.S. Bank Prime Minister’s Court in Fort Lauderdale, the judge raised the stop sign.
He said he was concerned that the sale could be done “on the back” of creditors who are still owed the money. They should be paid in full, he advised the company’s lawyers.
“I’m very well set up in the concept that if (the claim) is not paid in full, the sale should be approved,” Rasin said.
“Many judges have achieved similar positions,” he added. “It’s about applying bankruptcy laws because it was meant to apply.”
Rasin did not imply that, but creditors of Dania Beach-based carriers, aircraft lenders and other Spirit Airlines, who filed the “pre-placed” Chapter 11 case last November, were paid for what they were owed. The major bond holders then agreed to convert $795 million in debt into equities. Investors also kicked $350 million in stock funds when the airline withdraws from bankruptcy.
I’ll go slowly
The silver and sea cases were less clear.
Both applied for Chapter 11 on December 30 after not attracting debtors’ owned funds to fund operations during the reorganization process. Instead, they relied on a large scale of their main supporters, brigade agency services. This used nine interim requests that illuminated the green with silver to use the revenue generated by the airline when flying through bankruptcy.
Silver currently offers five Florida destinations, including Fort Lauderdale Hollywood International Airport, as well as 11 destinations in the Bahamas and Caribbean. When three planes were reclaimed by the owners, it was forced to drop Orlando Services.
Seaborn continues to fly a single seaplane between St. Thomas and the US Virgin Islands in St. Croix.
Airline management has publicly set first quarter targets to withdraw bankruptcy, but the lawsuit continues until April, entering its fifth month. Despite discussions with multiple candidates, the two airlines didn’t attract buyers until affiliates from Wexford Capital and Greenwich in West Palm Beach, Connecticut generated $5.5 million in silver funding, creating what is known as a $5.75 million credit bid.
However, the judge wondered where it would come from to pay other creditors, including the airport, fuel services company and the owners of the remaining eight planes where silver is flying under the lease. Early in the hearing, lawyers at several Florida airports, including Fort Lauderdale Hollywood International, told the court that arrangements had been made to repay past costs and other fees.
Rasin praised those arrangements. However, he said the photos are still unknown about the totality of the airline’s debts and how they will be paid.
Brian Hall of Atlanta’s company Smith, Gambrell & Russell, who is the lead lawyer for the two airlines, said the money could be withdrawn from the $4 million generated by Seaborn’s potential sales.
But Barbra Perlin, a lawyer for the Dutch & Night Company, who represents creditors for both airlines, questioned how money from the sale of one bankrupt property could be used to pay another debt. A single management team oversees both companies, but each airline has filed separate Chapter 11 petitions with the court.
The judge said he was about to raise the same question.
“I need a clear vision — and stakeholders need a clear vision as to where this case will go in the end,” Rasin said.
Airline lawyers sought more time to gather the information the judges needed.
Rasin has approved the requests – they will be given until early next week. He set up an evidence hearing on Tuesday.
Steven Rossum, CEO of both Silver and Seaborne, declined to comment.
Original issue: May 9, 2025 7am EDT
