In the second-to-last day of August, the airline industry was rocked by the news that Spirit Airlines (SAVE) was refiling for bankruptcy after ceremoniously emerging from Chapter 11 protection to great fanfare last March.
Earlier in August, Spirit submitted quarterly Securities and Exchange Commission (SEC) filings showing that its leaders had “substantial doubt” about the airline’s ability to stay in business amid spiraling debt.
Even as the airline prepares to delist from the market and go private, news of the second bankruptcy sent Spirit shares down by nearly 50% in after-hours trading.
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This is how much Spirit Airlines execs were offered to stay with the struggling airline
Further SEC filings around the second bankruptcy dug up by Bloomberg now additionally reveal that four of the airline’s top executives will receive millions in bonuses for agreeing to stay on with the airline amid flagging finances.
Taking over after longtime CEO Ted Christie was pushed out last April, Dave Davis has reportedly been offered a $2.9 million retention bonus that will need to be returned to the company if he leaves the role in less than a year or within 90 days of Spirit emerging from what will now be a second restructuring.
Related: Chapter 11 Bankruptcy: Is my Spirit Airlines flight canceled?
Chief Financial Officer Frederick Cromer and Chief Operating Officer John Bendoraitis have both also received similar packages of a respective $1.2 and $1.1 million.
“The retention bonuses come after a previous bankruptcy restructuring that had promised ‘surgical’ precision and a swift debt fix failed within six months,” Bloomberg’s Eliza Ronalds-Hannon and Jonathan Randles report.
The bonuses were awarded right before Spirit filed for a second bankruptcy, as Chapter 11 proceedings would limit the airline’s ability to hand out such bonuses.
At the time it filed for Chapter 11 protection in November 2024, Spirit debts had totaled over $3.8 billion. The airline was able to emerge from it by converting $795 of debt into equity and announcing plans to go private by handing over control to its biggest bondholders.
Image source: Alex Tai/SOPA Images/LightRocket via Getty
“Gross enrichment of the very people responsible for Spirit’s financial collapse”: Investor calls out airline
In December 2024, one of the investors called out Spirit Airlines for repeatedly reassuring customers and investors that bankruptcy was not an option and then filing for it anyway, while also paying bonuses of over $850,000 for Bendoraitis and $3 million for then-CEO Christie.
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“This gross enrichment of the very people responsible for Spirit’s financial collapse has come directly at the expense of shareholders who trusted the company with their life savings,” reads the letter addressed to Judge Sean Lane of the United States Bankruptcy Court for the Southern District of New York by a shareholder whose name was kept private.
Just prior to the second filing, Spirit’s leadership has similarly tried to reassure investors that it was doing just fine, even as public numbers painted a very different picture.
After the SEC filing about the airline’s future went public, Davis sent out a statement saying that there was only a bankruptcy “risk if we do not make changes” and that the team was “confident that we can build a Spirit that will continue to provide consumers the unmatched value that they have come to expect for many years.”
Related: Spirit Airlines stock is in a crater amid second bankruptcy
