Investing.com -- Spirit Airlines (OTC: SAVEQ ) Inc. has received court authorization to exit bankruptcy through a take-private deal backed by its top bondholders, following the rejection of a takeover bid by Frontier Group Holdings (NASDAQ: ULCC ) Inc. The decision was made by Judge Sean Lane on Thursday, who approved Spirit's restructuring plan.

The Florida-based discount airline's control will be handed over to its top bondholders, which include Citadel Advisors, Pacific Investment Management Co., and Western Asset Management Co., according to court documents.

Spirit Airlines sought court protection in November to restructure around $1.6 billion in debt, after losing its footing in the post-pandemic period as larger airlines attracted travelers with more basic-economy fares. The company has stated that the restructuring will provide it with the time needed to enhance its business through new premium options, such as wider seats and complimentary alcoholic beverages under certain tickets.

In November 2024, the court held an initial hearing to consider the relief requested in Spirit's motion on an interim basis. Following this, the court entered the Interim Order on November 19, 2024. A second hearing was held on December 17, 2024, which resulted in the Second Interim Order being entered on December 19, 2024. The Third Interim Order was also entered on December 19, 2024, and the Fourth Interim Order was entered on January 28, 2025.

The court has determined that the relief requested in Spirit's motion represents a sound exercise of the company’s business judgment and is in the best interests of the company, its creditors, its estates, and all other parties in interest. The court has also ordered that the motion is granted on a further interim basis.

The court's order authorizes Spirit Airlines to continue operating their Cash Management System, maintain their Bank Accounts, open and close Bank Accounts post-petition in the ordinary course of business, and maintain their existing Business Forms. The court also authorized the banks to treat, service, and administer the Bank Accounts in the ordinary course of business and to receive, process, honor, and pay all checks or wire transfers used by the Debtors.

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