Spirit Airlines Cayman Subsidiaries File for Chapter 11 Protection

Four Cayman Islands-based subsidiaries of Spirit Airlines (NK) have filed for Chapter 11 bankruptcy protection, requesting to join their parent company’s ongoing case in the US Bankruptcy Court for the Southern District of New York. The subsidiaries—Spirit Finance Cayman 1 Ltd., Spirit Finance Cayman 2 Ltd., Spirit IP Cayman Ltd., and Spirit Loyalty Cayman Ltd.—initiated their restructuring process on November 25, 2024. This move follows Spirit Airlines’ earlier announcement on November 18 that these companies would also seek Chapter 11 protection.

In their filing, the Cayman subsidiaries requested to apply the existing court orders from the Spirit Airlines case to their own proceedings. They also sought to waive or fulfill certain procedural requirements typically required for initiating a new Chapter 11 case, streamlining the restructuring process.

These four subsidiaries were incorporated in 2020 as part of a capital raise by Spirit Airlines. The Cayman entities were used to issue USD 850 million in senior secured notes, carrying an 8% interest rate, which were secured against Spirit’s loyalty and intellectual property assets. The notes are due for repayment in 2025. Importantly, the Cayman subsidiaries have no other creditors, making their restructuring process somewhat distinct from Spirit Airlines’ broader Chapter 11 filing.

This restructuring follows Spirit Airlines’ ongoing efforts to stabilize and reorganize its finances as it navigates challenges in the airline industry. The move is part of Spirit’s wider strategy to address financial obligations and maintain operations during uncertain economic conditions.

The court proceedings will continue as Spirit and its subsidiaries work through the Chapter 11 process, with the goal of reducing debt and securing a more sustainable future for the airline and its affiliated entities. As the restructuring process progresses, these filings will likely have significant implications for Spirit Airlines’ operations, creditors, and future growth strategies.

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Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com