Silver Airways LLC has filed an emergency motion seeking approval of bidding procedures for the sale of substantially all of its assets, with its debtor-in-possession (DIP) lender KIA II LLC acting as the stalking horse bidder with a $5.775 million credit bid offer. The Fort Lauderdale-based regional carrier is looking to fast-track the sale process to "maintain the going concern, enterprise value of its business," according to court documents filed May 2 with the U.S. Bankruptcy Court for the Southern District of Florida.
The emergency motion requests a hearing on May 7, 2025, underscoring the carrier's urgent need to establish a formal sale process. Silver Airways and its subsidiary Seaborne Virgin Islands, Inc. have been operating under Chapter 11 protection since filing voluntary petitions on December 30, 2024.
"Silver believes that the most effective way to maximize the value of its estate for the benefit of its constituents was to seek bankruptcy protection and sell its business and assets through a Sale Transaction pursuant to section 363 of the Bankruptcy Code," the company's attorneys stated in the filing.
The proposed stalking horse bid from KIA II LLC would be executed as a credit bid of the amount due under the DIP facility. Notably, the proposed sale includes only Silver Airways' assets and excludes all assets of Seaborne Virgin Islands, Inc. and the equity interests in Seaborne owned by Silver. The carrier indicated it anticipates "finalizing negotiations with a purchaser for the Seaborne assets in the very near future" and will file a separate motion for those assets.
The motion details an aggressive timeline for the sale process. If approved, interested bidders would have until May 23, 2025, to submit qualified bids. An auction, if necessary, would be held on May 28, 2025, followed by a sale hearing on June 5, 2025.
"In order to yield top dollar for the Assets, maintain the support of Silver's passengers and vendors, and maintain Silver's employee base, it is in the best interest of Silver and its estate to move expeditiously with a sale process," the airline argued in its filing.
The proposed bidding procedures include a break-up fee equal to 5% of the purchase price for the stalking horse bidder, and minimum overbid increments of $250,000. To qualify as a potential bidder, interested parties would need to submit a 10% good faith deposit.
Silver Airways' management has already conducted extensive marketing efforts both before and after the bankruptcy filing. According to the court documents, at least 75 potential purchasers have been contacted and no fewer than 20 parties have conducted due diligence to explore purchasing the assets.
"Silver believes that the marketing efforts will be sufficient to ensure the highest and best offer, particularly in light of its limited financing options and ongoing cash needs," the motion states. "Further, Silver believes that a delayed process likely would lead to the deterioration of the operating performance of its business and the value of its assets."
The proposed sale has support from key stakeholders, including Wexford Capital, LP and KIA II LLC (collectively, "Wexford"), the carrier's postpetition lender, as well as Brigade Agency Services LLC and Argent Funding, LLC, the prepetition lenders.
Silver Airways operates as a regional carrier under its own Part 121 certificate. Its subsidiary, Seaborne, also operates under its own separate Part 121 certificate.
The airline is represented in the bankruptcy proceedings by Brian P. Hall and Michael F. Holbein of Smith, Gambrell & Russell, LLP. KIA II LLC is represented by Tucker Arensberg, P.C., with Brandon S. O'Connor signing the bid letter included in the filing.
The case is being heard by Judge Peter D. Russin in the U.S. Bankruptcy Court for the Southern District of Florida (Case No. 24-23623-PDR).
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