06/06/2025 | Press release | Distributed by Public on 06/06/2025 15:32
THE MONTHLY OPERATING REPORT FOR FEBRUARY 2025
The (Reorganized) Debtors2 prepared the attached monthly operating report for February 2025 (together herewith and with all exhibits and schedules thereto, the "MOR").
On November 18, 2024, Spirit Airlines, Inc. (n/k/a Spirit Airlines, LLC) filed a voluntary petition for relief under chapter 11 of title 11 of the United States Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court"). On November 25, 2024, Spirit Airlines, Inc.'s subsidiaries (collectively, the "Cayman Debtors") filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code in the Bankruptcy Court. The Chapter 11 Cases were jointly administered for procedural purposes only pursuant to Bankruptcy Rule 1015(b), as ordered by the Bankruptcy Court [ECF No. 121].
On February 20, 2025, the Bankruptcy Court entered the Confirmation Order [ECF No. 500] confirming the Plan and granting related relief. The Plan became effective and was substantially consummated on March 12, 2025 [ECF No. 533]. On March 27, 2025, the Bankruptcy Court entered the (I) Final Decree Closing Certain of the Chapter 11 Cases and (II) Order Amending the Joint Administration Order [ECF No. 546], closing all the Chapter 11 Cases other than that of Spirit Finance Cayman 1 Ltd. (No. 24-12038).
The following notes and statements and limitations pertain to, are incorporated by reference in, and comprise an integral part of, the MOR, and should be referred to and considered in connection with any review thereof.
1. | Basis of Presentation. The (Reorganized) Debtors prepared the MOR with the assistance of their advisors and professionals, and are filing it solely for purposes of complying with the reporting requirements applicable in the Chapter 11 Cases. There can be no assurance that such information is complete, and the MOR may be subject to revision. |
1 The last four digits of the Reorganized Debtor's employer identification number are 7020. The Reorganized Debtor's mailing address is 1731 Radiant Drive, Dania Beach, FL 33004.
2 Capitalized terms used but not immediately or otherwise defined herein shall have the meanings ascribed to them elsewhere herein or in the First Amended Joint Chapter 11 Plan of Reorganization of Spirit Airlines, Inc. and Its Debtor Affiliates [ECF No. 500, Ex. A] (the "Plan"), as applicable. The rules of interpretation set forth in Article I.B of the Plan shall apply hereto.
This MOR is unaudited, limited in scope, and has not been prepared in accordance with federal or state securities laws or other applicable non-bankruptcy law or in lieu of complying with any periodic reporting requirements thereunder, but has been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") (except that the MOR does not include all information and footnotes required by U.S. GAAP).
The (Reorganized) Debtors and their agents, advisors, attorneys, and other professionals undertake no responsibility to indicate variations from securities laws, other laws, or generally accepted accounting principles herein, or for any evaluations of the (Reorganized) Debtors based on this financial information or any other information. This information has not been subjected to audit procedures that would typically be applied to financial information presented in accordance with U.S. GAAP or any other recognized financial reporting framework, and upon application of such procedures, the presented financial information could be subject to material changes. The MOR is not intended to reconcile to any financial statements otherwise prepared or distributed by or for the (Reorganized) Debtors. Each signatory to the MOR has necessarily relied upon the efforts, statements, advice, and representations of personnel of the (Reorganized) Debtors and their agents, advisors, attorneys, and other professionals. Each signatory has not (and could not have) personally verified the accuracy of each such statement, representation, and answer contained in the MOR.
The financial information contained herein is presented per Spirit's books and records without, among other things, all adjustments or reclassification that may be necessary or typical with respect to consolidating financial statements or SEC reporting purposes or in accordance with U.S. GAAP. The (Reorganized) Debtors' accounting systems, policies, and practices were developed to produce consolidated financial statements at the Spirit Airlines, Inc. (n/k/a Spirit Airlines LLC) reporting entity rather than financial statements at each individual legal entity. The Cayman Debtors do not have day-to-day business operations or physical presence and thus do not traditionally maintain books and records. Upon agreement reached with the United States Trustee for the Southern District of New York (the "U.S. Trustee"), the Cayman Debtors are to provide information for Part 1 and Part 7, with limited information on cash balances for Part 2 of the MOR form and provide no financial statement attachments at the entity-level. As such, intercompany balances, historical retained earnings, and equity balances for the Cayman Debtors are not reflected in the separate MORs for each of the Cayman Debtors as these were not historically maintained in the (Reorganized) Debtors' accounting system.
2. | Reporting Period. Unless otherwise noted, the MOR reflects the (Reorganized) Debtors' books and records and financial activity occurring during the applicable reporting period. Except as otherwise noted, no adjustments have been made to activity occurring after the close of the reporting period. The first monthly operating reports encompassed the reporting period from November 18, 2024, until the end of the month, November 30, 2024, with the exception of the Debtors' Statement of Operations attachment and information provided in Part 4, both of which were provided on a full-month basis. This MOR covers the full calendar month, as was the case for the December 2024 and January 2025 monthly operating reports. |
3. | Disbursement Systems. Cash was received and disbursed by the Debtors in a manner consistent with the Debtors' historical cash management practices, as described in the Motion of the Debtor for Entry of Interim and Final Orders (I) Authorizing (A) the Debtors to Maintain their Existing Cash Management System, Bank Accounts, and Business Forms, (B) the Debtors |
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to Open and Close Bank Accounts, and (C) Financial Institutions to Administer the Bank Accounts and Honor and Process Related Checks and Transfers, (II) Waiving Deposit and Investment Requirements, and (III) Allowing Intercompany Transactions and Affording Administrative Expense Priority to Post-Petition Intercompany Claims [ECF No. 7].
4. | Use of Information. The financial information disclosed herein was not prepared in accordance with federal or state securities laws or other applicable non-bankruptcy law or in lieu of complying with any periodic reporting requirements thereunder. The MOR should not be used or relied upon for any other purpose, including for information relating to the (Reorganized) Debtors' current or future financial condition or performance or for purchasing, selling, or transferring the claims against or equity interests in the (Reorganized) Debtors. |
5. | Payment of Prepetition Claims Pursuant to First Day Orders. Pursuant to certain "first day" orders entered by the Bankruptcy Court in the Chapter 11 Cases (collectively, the "First Day Orders"), the Debtors were authorized (but not directed) to pay or otherwise satisfy various prepetition claims, including those related to employees, lienholders, customer obligations, insurance, vendors, taxes and fees, trade, and intercompany transactions. To the extent any reportable payments were made on account of prepetition claims following commencement of these Chapter 11 Cases pursuant to a First Day Order, such payments have been included in the applicable reporting matrices or notices required per, and identified in, each respective final First Day Order. |
6. | Reservation of Rights. Although the (Reorganized) Debtors and their advisors made reasonable efforts to ensure that the MOR is as accurate and complete as possible under the circumstances and based on information available at the time of preparation, inadvertent errors or omissions may have occurred. The Reorganized Debtors hereby reserve all rights to dispute the nature, amount, validity, status, enforceability, or executory natures of any claim, agreement, representation, or other statement set forth in this MOR. Further, the Reorganized Debtors reserve the right to amend or supplement the MOR in all respects, as they deem necessary or appropriate, but shall be under no obligation to do so. Nothing contained in this MOR shall constitute a waiver of the Reorganized Debtors' rights or an admission of any kind with respect to these Chapter 11 Cases or any claim of or against any (Reorganized) Debtor. |
7. | Specific MOR Disclosures. |
Notes to Part 1:
· | Cash balances, receipts, and disbursements reflect bank activity during the reporting period. Timing differences in recognition of certain transactions may create differences between bank balances presented in Part 1 and cash balances reported in the Balance Sheet attachment to the MOR. |
· | Where applicable, the (Reorganized) Debtors convert non-USD cash transactions to USD using applicable currency exchange rates. As a result, changes in currency exchange rates give rise to month-over-month fluctuations in cash balances which are reported in USD. |
· | Intercompany receipts and disbursements are excluded from Parts 1(b) and 1(c), respectively. As such, the ending cash balances in Part 1 will not comport with the ending cash balances in the (Reorganized) Debtors' bank statements or the (Reorganized) Debtors' books and records. A reconciliation of end-of-month bank balances to the balances presented in Part 1 is provided in the attached Statement of Cash Receipts and Disbursements. |
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Notes to Part 2:
· | Part 2 balances for the Cayman Debtors only include the cash balances for total current assets and total assets. Historical intercompany asset and liabilities balances as well as historical equity balances are not provided. No other Part 2 balances are applicable to the Cayman Debtors. |
· | Balances reflected in Part 2(g) accrued due to changes to the Debtors' accounts payable processes implemented upon the commencement of the Chapter 11 Cases, among other nonrecurring related issues. The total overdue post-petition amount of $20.5 million reflected in Part 2(g) includes approximately $20.0 million paid in the first week of the succeeding month. |
Notes to Part 3:
· | None |
Notes to Part 4:
· | Part 4(e) does not incorporate certain general and administrative expenses related to payroll, technology, or other expenses that would otherwise be considered as general and administrative expenses for purposes of MOR reporting. This is due to the setup of the (Reorganized) Debtors' accounting system-the (Reorganized) Debtors do not separately classify expenses in their general ledger accounts between general and administrative expense financial statement line items. |
Notes to Part 5:
· | Part 5(a) includes payments made to Epiq Corporate Restructuring LLC in its capacity as claims and noticing agent in the Chapter 11 Cases [ECF No. 50]. |
· | Part 5(b) reflects payments made in accordance with the Bankruptcy Court's Order Authorizing the Retention and Compensation of Professionals Utilized in the Ordinary Course of Business [ECF No. 266]. |
· | Part 5(c) includes payments made to professionals of various creditor constituencies in the Chapter 11 Cases (including in accordance with the Bankruptcy Court's Final DIP Order [ECF No. 257]). |
Notes to Part 6:
· | None |
Notes to Part 7:
· | For Part 7(a), pursuant to the relief granted via the First Day Orders, the Debtors made payments on account of certain prepetition debts as they come due in the ordinary course of business. Where required, details of these payments have been delivered to the required notice parties pursuant to the reporting requirements contained within the final First Day Orders. |
· | For purposes of Part 7(c), the (Reorganized) Debtors included information with respect to the individuals that the (Reorganized) Debtors believe may be included in the definition of "insider" set forth in section 101(31) of the Bankruptcy Code during the reporting period. Such individuals may no longer serve in such capacities. Persons listed as "insiders" have been |
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included for informational purposes only and their inclusion shall not constitute an admission that those entities or persons are insiders for purposes of section 101(31) of the Bankruptcy Code. The listing of a person as an insider for purposes of the MOR is not intended to be, nor should it be, construed as an admission of any fact, right, claim, or defense and all such rights, claims, and defenses are hereby expressly reserved. Information regarding the individuals listed as insiders in the MOR has been included for informational purposes only and such information may not be used for any purpose, including to determine (a) control of any (Reorganized) Debtor, (b) the extent to which any individual exercised management responsibilities or functions, (c) corporate decision-making authority over any (Reorganized) Debtor, or (d) whether such individual could successfully argue that he or she is not an insider under applicable law, including the Bankruptcy Code and federal securities laws, or with respect to any theories of liability. Where Part 7(c) is indicated as "Yes," such persons were confirmed to have received employee compensation payments in the ordinary course of business.
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