DoJ Objects to Spirit Airlines’ Request for Expedited Hearing
The United States Department of Justice (DOJ) has raised objections to Spirit Airlines’ request for an expedited hearing regarding its bankruptcy reorganization plan. The airline, along with its Cayman Islands subsidiaries, had requested a December 17, 2024, hearing at the US Bankruptcy Court for the Southern District of New York to present a disclosure statement and reorganization plan.
The United States Trustee Program, a division of the DOJ responsible for overseeing bankruptcy cases, argued that Spirit’s request was “premature” and should be postponed until all parties involved have had adequate time to review the necessary documents. The DOJ emphasized that Spirit filed for Chapter 11 bankruptcy on November 18, 2024, followed by its Cayman Islands subsidiaries six days later, leaving insufficient time for all standard procedures to take place by the proposed hearing date.
The DOJ’s objection highlighted several procedural concerns, including the fact that retention applications for bankruptcy professionals had not been approved, and a second-day hearing had not yet been held. Additionally, Spirit Airlines had not filed essential documents, such as schedules and statements of financial affairs, and requested an extension until January 2025 to submit these critical filings. The DOJ pointed out that many typical actions and orders required in large Chapter 11 cases had not yet been completed.
Furthermore, the DOJ questioned Spirit’s claim that the Chapter 11 case was a simple “prepackaged case,” noting that the airline had not presented sufficient evidence to support this assertion. The DOJ also referenced the restructuring support agreement between Spirit and its creditors, which allows for the plan to be approved by February 17, 2025, rather than the expedited December 2024 timeline requested by the airline.
In its filing, the DOJ stressed the importance of ensuring accuracy and completeness at the disclosure statement stage. It argued that the information provided to shareholders, creditors, and other interested parties must be detailed enough for them to make an informed judgment about the reorganization plan. The DOJ expressed concern that the proposed hearing date did not allow enough time for creditors to properly assess the plan and its potential impact on their interests.
The objection, filed on December 10, 2024, underscored the complexity of the bankruptcy case and the need for careful consideration before proceeding. At the time of the filing, Judge Sean H. Lane had yet to rule on the objection, leaving the timing of the hearing and the future course of the bankruptcy proceedings uncertain.
As Spirit Airlines continues its Chapter 11 restructuring efforts, the outcome of this legal challenge will likely play a significant role in determining the timeline for its financial recovery and the resolution of its obligations to creditors.
Related News : https://airguide.info/?s=Spirit+Airlines
Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com