Below is our initial take on recent bankruptcy-related developments:
Spirit Airlines continues 'constructive talks' with creditors | Reuters
On Tuesday, ultra-low-cost carrier Spirit Airlines announced it’s in constructive talks with its creditors and will continue to seek strategic alternatives to improve liquidity.
S&K Take: Spirit Airlines seems destined for bankruptcy in the near term in the wake of its failed merger with Frontier Airlines, with the WSJ reporting that Spirit and bondholders are working on a bankruptcy. Spirit also filed a form with the SEC effectively confirming the report, noting that it won’t be able to file its Q3 10-Q because Spirit is too busy negotiating with its creditors. Fair enough. In any case, sounds like a prearranged bankruptcy with noteholder support that passes other GUCs through. Imagine that we will be seeing something soon, and we will be sure to cover.
FTX and their 23 lawsuits: Will defrauded investors see justice? | Forbes
FTX's bankruptcy team is suing multiple entities including Binance, Anthony Scaramucci, SkyBridge Capital, Crypto.com and Fwd.us to recover billions of dollars lost in the exchange's collapse. These lawsuits add to their ongoing efforts to recoup funds for creditors.
S&K Take: The FTX team unleashed a series of claw back actions aimed at recouping funds for customers on Monday. The headliner is clearly the Binance action, which seeks to recover $1.76 billion in connection with a July 2021 share buyback transaction. The other actions aren’t anything to sneeze at, with FTX seeking $438 million from an “international crime syndicate” and $67 million from Skybridge and Anthony Scaramucci just to name a few. Looks like the estate is in the process of settling all family business.
Purdue, Sacklers agree to terms as new Ch. 11 deal nears | Law360
Purdue Pharma LP is nearing a settlement with some Sackler family members, outlining key points like liability releases and their financial contribution to opioid crisis victims through Purdue's bankruptcy case. The report was filed Tuesday in New York bankruptcy court by co-mediators Shelley C. Chapman and Eric D. Green, details on the exact amount haven't been disclosed.
S&K Take: There is a lot going on in the world of Purdue. Per a report filed by the mediators, the parties are tantalizingly close to deal, with only one Sackler family constituency holding out and the vast majority of the other parties on board. The devil is always in the details though, and it will be a herculean effort to doc any potential deal should one be reached, although folks do seem optimistic. Perhaps a Festivus Miracle is in the offing. In related news, Judge McMahon considered Maryland’s appeal of the continued extension of the “temporary” stay of litigation against the Sacklers (going on 5 years), with Maryland arguing that the Supreme Court’s decision supports termination of the stay. Judge McMahon, who famously reversed the confirmation of Purdue’s plan (only to be reversed by the Second Circuit and then vindicated by the Supreme Court) clearly stated that she was skeptical of the parade of horribles that would allegedly commence if the stay were lifted and litigation allowed to move forward. She also referenced “Spaceballs” (“When will then be now? Soon.”) so I think we just became best friends? She said she would issue a decision quickly, which may put some pressure on the parties to cut a deal in the near term.
