Spirit CCO: Another Buyer “Inevitable”?
$Spirit Airlines(SAVE.US$ has $1.3 billion in liquidity, recently received another $69 million from JetBlue in break-up fees, has assets that exceed its liabilities, yet has a market cap under $535 million.
They can’t legally declare bankruptcy with that much cash on hand and assets that exceed liabilities, and Spirit’s Chief Communications Officer Matt Klein claims industry consolidation is “inevitable.”
They can’t legally declare bankruptcy with that much cash on hand and assets that exceed liabilities, and Spirit’s Chief Communications Officer Matt Klein claims industry consolidation is “inevitable.”
Spirit may have another buyer….
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RoNo : Bag holder detected!
Justin BrewerOP RoNo: Not quite… but you are an anonymous
RoNo : a corporation can file for Chapter 11 bankruptcy even if its assets exceed its liabilities. Chapter 11 bankruptcy is primarily a tool for reorganization, allowing a company to restructure its debts and modify its operations to become more profitable while continuing to run its business. The decision to file for Chapter 11 is not solely based on the company’s current asset-to-liability ratio but on its ability to generate future cash flows, manage debt obligations, and sustain operations. It’s often about addressing cash flow issues, restructuring debts to more manageable terms, or reorganizing the business to ensure long-term viability.
RoNo : Confucius says One should sit on one’s ass not talk out of it.
RoNo : My name is Roger Noonan. I’m not anonymous, I’m informed and also a bag holder. I think Spirit will recover and we’ll see a bit of the upside we hoped for on the merger news. But to say they can’t legally petition for bankruptcy is factually incorrect.
Justin BrewerOP RoNo: Duh… but they can’t get Chapter 11 APPROVED with $1.369 billion of cash on hand and an all Airbus order book valued far higher than their contracts.
Justin BrewerOP : Petitioning for Ch. 11 bankruptcy and having it approved are two entirely different things.
QianmengYu RoNo: yes. I was robbed in Venator as they intentionally file bankruptcy while business is OK, such that bond holders takes over company while wipe out all convertible and common shares because large equity owner bought a lot of bond ahead, and passive investment funds just voted FOR motion to wipe out
.
RoNo QianmengYu: Exactly! For a chapter 11 you need the debt holders on board. They become whole at our expense. I hope Spirit’s prospects are better than that outcome but it is a possibility esp if we get an oil price shock .
RoNo Justin BrewerOP: That’s for the court and debt holders to work out and spirit has made it public they are trying to renegotiate terms with the bond holders. If that fails what do you think the next step is?
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