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US: New York bankruptcy court confirms Spirit Airlines’ Chapter 11 with opt-out third-party releases deemed consensual post-Purdue; reasons to follow; US Trustee’s appeal rights preserved

Published on: 24 February 2025

Published by a Law360 reporter

Legal News

Article summary

US Bankruptcy Judge Sean H Lane

At a hearing, Judge Sean H Lane said he intends to approve third‑party releases in Spirit’s Chapter 11 plan using an opt‑out structure, and will set out his rationale in a written opinion to be issued by the end of February 2025. In the interim, he will enter a confirmation order for Spirit’s reorganisation once the airline and the US Trustee’s Office settle wording that safeguards the bankruptcy watchdog’s ability to appeal. The parties plan to file a revised proposed order on the afternoon of 20 February 2025. That approval would allow Spirit to complete a restructuring under which US$795m of debt would be exchanged for equity. Nearly all voting creditors of Spirit have signalled support for the deal. He noted last week that, although the Chapter 11 plan was largely confirmable, he required additional time to weigh objections to the third‑party releases from the US Trustee’s Office and the SEC...

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