Bankruptcy & Restructuring News & Analysis

In a landmark ruling for bankruptcy proceedings, Judge Sean H. Lane of the U.S. Bankruptcy Court for the Southern District of New York has approved Spirit Airlines' use of third-party releases with an opt-out mechanism in its Chapter 11 reorganization plan. The decision addresses objections from the U.S. Trustee and SEC while providing important guidance on what constitutes proper consent for such releases following the Supreme Court's 2024 Purdue Pharma decision. Spirit's restructuring includes debt-to-equity conversions and exit financing arrangements that will allow most creditors to receive full recovery