Regional South Florida airline Silver Airways ceased flying early Wednesday after a would-be buyer withdrew its offer to acquire the troubled carrier out of Chapter 11 bankruptcy proceedings, the company said.
Seaborne Airlines, an affiliated carrier that serves the U.S. Virgin Islands, will continue to operate.
CEO Steven Rossum notified about 350 of the company’s remaining employees via email late Tuesday
“It is with a heavy heart that I share the difficult news that, after months navigating through Chapter 11 bankruptcy, our journey at Silver Airways is coming to an end for most of us,” he wrote. “Wexford Capital—our DIP lender—has informed us they will no longer support operations or, except for a few, retain our employees. As a result, Silver Airways will cease operations on Wednesday June 11 and begin the wind-down process. A small group will be asked to stay on temporarily to assist with asset management and records. Those individuals will be contacted directly. Seaborne will continue to operate as scheduled.”
The decision left passengers stranded at five Florida cities and 11 locations in the Bahamas and the Caribbean. There was no immediate word on what type of accommodations the airline intended to make for them.
Lawyers for both the company and Wexford appeared before U.S. Bankruptcy Judge Peter Russin on Tuesday for a hearing on a proposed sale but requested and were granted a continuance until Wednesday..
Both Silver, which is based in Hollywood, and Seaborne filed for Chapter 11 bankruptcy protection last Dec. 30 after a key lender cut off funding, creditors pressed for payments on past due bills and no one stepped forward to rescue the businesses in a buyout. At filing, the airline owed secured and unsecured creditors more than $400 million.
A subsequent sales effort during the Chapter 11 in May ended in the same result after Russin authorized an auction that attracted no qualified bids to challenge a “stalking horse offer” made by an affiliate of Wexford Capital of Wets Palm Beach and Greenwich, Conn. In April, the Wexford affiliate KIA II LLC provided $5.5 million in debtor-in-possession financing so that Silver could continue flying. Another affiliate, Argentum. Acquisition, submitted a $5.775 million to buy Silver.
Since the Chapter 11 filing, Silver’s service profile diminished considerably as its fleet of French-made ATR turbo-props was cut in half to eight and it is now serving just five Florida cities along with 11 island destinations in the Bahamas and Caribbean. The destinations now served by Silver include Fort Lauderdale-Hollywood International Airport, which serves as a hub for flights to Tampa, Tallahassee, Pensacola and Key West. Seaborne’s flights, which were temporarily suspended for maintenance reasons, operate between St. Thomas and St. Croix.
Silver’s work force was cut in half from 608 to 348 pilots, flight attendants and ground workers.
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