Troubled airline gets no bids at bankruptcy auction

At the time it filed for bankruptcy on the second-to-last day of 2024, Florida budget airline Silver Airways had amassed over $500 million in unpaid debts.

While it initially tried to reassure travelers that it would be able to quickly emerge from bankruptcy in 2025, several airports pulled Silver’s right to fly over unpaid fees, while investors both able and willing to help the carrier get back on track failed to materialize.

Argentum Acquisition Co., a hedge fund with a history of taking on troubled airlines, eventually made a stalking-horse offer of $5.77 million.

Between May 28 and June 4, the U.S. Bankruptcy Court for the Southern District of Florida held an auction in the hopes of getting bids that would come closer to helping recoup the $500 million owed to creditors.

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’No qualified bids were received’: what comes next for Silver Airways

“It is not lost on the court that the debtors borrowed collectively several hundred million dollars, yet the contemplated asset sale values total at present less than $10 million,” Judge Peter D. Russin wrote in his order.

With June 4 coming and going, not a single other bidder stepped up with a higher offer. At the end of Wednesday, Silver submitted court filings asking Russin to permit the sale of Silver’s “aircraft and related equipment, ground support infrastructure, airport gate leases, maintenance and operations facilities, receivables, and intellectual property” to Argentum and arguing that despite aggressively marketing the airline’s assets and reaching out to dozens of potential buyers, no one could be found to take on its accumulating debt.

Over Memorial Day weekend, Silver accrued an additional $1 million of debt after a mechanical issue forced it to halt certain flights from Florida to the Caribbean.

“No qualified bids were received by the bid deadline for Silver’s assets and no auction was held,” Silver Airways CEO Steve Rossum said in an affidavit. “[…] In my opinion and business judgment, the bid procedures provided for an orderly and competitive process through which interested parties could have submitted bids to purchase Silver’s assets. The bid procedures and sale process allowed the debtors to test the value of their assets and sufficiently exposed the assets to the market.”

Silver Airways was founded in 2011 out of Gulfstream International.

Image source: Shutterstock

A timeline of the Silver bankruptcy and what went wrong

Silver Airways launched in 2011 with the assets of the defunct Gulfstream International Airlines. In the 14 years that followed, it was able to carve out a market shuttling tourists to holiday destinations in Florida as well as Caribbean countries and territories like the Bahamas, Jamaica, St. Kitts, and St. Thomas.

While popular locally, Silver started facing problems around rising fuel and maintenance costs and the financial hole created by declining travel during the Covid pandemic.

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Another bankruptcy hearing on approval of the sale has been set for June 10, while local outlets report that lawyers are currently working out a “transition services agreement” to present to Russin. In a process that typically takes at least 60 days, the handover would also need to be approved by the Federal Aviation Administration.