December 16, 2024
Dear AMFA-Spirit Members:
On December 10, 2024, the Office of the United States Trustee, Region 2, held a Meeting of Creditors pursuant to Section 341 of the Bankruptcy Code in the matter of Spirit Airlines Inc., et al. The Aircraft Mechanics Fraternal Association (AMFA) was represented at this meeting by New York attorney George Diamantopoulos.
The 341 Meeting of Creditors was presided over by Trial Attorney Shara Cornell, who works for the Region 2 United States Trustee William K. Harrington. Ms. Cornell questioned witnesses under oath, including Spirit Airlines’ Chief Financial Officer, Fred Cromer and General Counsel, Thomas Canfield. Canfield is on the Board of Directors of the Debtor’s four Cayman Island shell companies that exist for intellectual property purposes. The meeting was also attended by Marshall Huebner, an attorney from Davis Polk representing the Debtors, and an attorney representing the Committee of Unsecured Creditors.
Huebner made some reassuring comments. Specifically, he said this was an unusual Chapter 11 case because the only creditors expected to be impaired are equity holders whose existing stock is going to be canceled. The Debtor currently has $900 million in cash and short-term investments.
The Debtor’s exit strategy from the bankruptcy is to work with its bondholders to restructure $1.65 billion in debt that matures in 2025 and 2026. The restructuring includes an exchange of debt for $745 million, issuance of $350 million in new equity, and restructuring of the remaining amount for payment five years out.
The creditors, including AMFA, were not afforded the opportunity at this conference to ask specific questions about the status of pensions and other benefits; however, the initial representations of Spirit’s legal counsel reflect that any alteration of these benefits is not currently contemplated. The 341 meeting remains open and will resume at a future date set by the United States Trustee, at which time, AMFA expects to obtain further information concerning issues affecting our members.
Any information AMFA receives concerning these matters will be immediately shared with our members.
Fraternally,
Jason Salazar
AMFA-Spirit Airlines Airline Representative
