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Spirit Airlines, based in Florida, has announced that its shareholders are likely to see their shares wiped out as the airline undergoes a restructuring process. The carrier recently filed for Chapter 11 bankruptcy following unsuccessful attempts to merge with Frontier Airlines.
The airline has been seeking an investment partner due to a significant drop in revenue. Failed merger bids with JetBlue and Frontier have left Spirit's future uncertain. On Tuesday, Spirit Airlines publicly confirmed that shareholders are expected to lose their investments as bondholders take control of the company. Marshall Heubner, the airline's lawyer, stated that filing for Chapter 11 was a last resort.
Bloomberg reported that shareholder letters were sent to Judge Sean Lane, who criticized the CEO's support for restructuring deals that disadvantage shareholders. The United States Justice Department watchdog noted that shareholders have requested a formal committee meeting before any major decisions are made. Currently, shares are trading at approximately $0.60.
