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Ireland

Silver Airways enters US Chapter 11 after ATR transition woes; pursues going-concern sale with minimal recoveries for secured creditors to save 700 jobs

Published on: 14 January 2025

Published by a LexisNexis Ireland - Banking & Financial Services expert

Legal News

Article summary

Having emerged in 2011 by picking up the assets of a failed carrier at auction, and later expanding by buying a smaller carrier in a further insolvency sale, Silver Airways filed for Chapter 11 on 30 December 2024. A shift to a new aeroplane manufacturer badly disrupted Silver Airways' business and finances, driving the company to seek investments and loans from its parent and others, according to a first-day declaration by CEO Steven A. Rossum. Silver Airways' largest individual creditor is Versa Capital Management, the private equity fund that has owned it since 2017 and holds a $211m second-lien loan. In 2022 it issued $50m of convertible notes to Brigade Capital Management LP, an amount that swelled to $186m over two years. The terms of the Brigade loan provided that Silver Airways would be penalised with an increase in the loan's principal if it failed to make interest payments in cash, according to a bankruptcy declaration. A further $60m in unsecured debt rounds out the balance sheet in total...

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