Silver Airways: Zero-Bid Sale, Shutdown, and Chapter 7 Conversion

Silver Airways LLC entered chapter 11 on December 30, 2024, after telling customers in an open letter that tickets would remain valid while the carrier restructured. In the First Day Declaration, management tied the case to ATR fleet-transition problems, delivery delays, training constraints, spare-parts shortages, and a capital structure that left substantially all assets encumbered.

Silver moved from a cash collateral motion to a $5.5 million DIP facility and then into a sale process built around a $5.775 million stalking horse bid from an affiliate of the DIP lender. No competing bid arrived. The airline stopped operating on June 11, 2025, the court later directed appointment of a chapter 11 trustee, and the cases converted to chapter 7 on July 28. The case ended with a sale order, a trustee-led wind-down, and a separate Seaborne sale process.

Fleet Transition Problems and a Fully Encumbered Balance Sheet

The filing record describes Silver as an independent regional airline built around Florida, the Bahamas, and Caribbean service, with a route map centered on underserved markets and a related Seaborne platform in the Virgin Islands. The First Day Declaration lists the debtors' principal place of business at 2850 Greene Street in Hollywood, Florida and says the company's "Back to our Routes" strategy focused on Florida-Bahamas flying, higher-yield intra-Florida service, and Caribbean routes centered on San Juan. A separate wages motion said Silver employed 537 full-time and 109 part-time workers as of the petition date, with pilots and flight attendants covered by collective bargaining agreements.

Silver said it had shifted from Saab aircraft to ATR 42-600 and ATR 72-600 turboprops and had positioned itself as the ATR-600 launch customer in the United States. The First Day Declaration says certification delays, missed aircraft deliveries, training limits, and spare-parts shortages disrupted the rollout. The declaration says those issues increased costs and reduced operational reliability during the fleet transition. Trade coverage at filing similarly described the case as an effort to continue operating during chapter 11.

The declaration also points to a ground-handling incident involving Menzies that left an ATR72 out of service for roughly six months, plus disputes with lessors over maintenance reserves and engine-reserve reductions. Coverage shortly after the filing reported that the company had already turned to cash collateral while it searched for longer-term financing.

Silver said in the First Day Declaration that its sole member was Argent Financing, LLC, which in turn was owned by Argent Holdings (2016), LLC, both controlled by funds managed by Versa Capital Management. The same filing says Brigade Capital Management held a facility with outstanding principal and interest of at least $186,793,159 through December 2024, while Argent Funding, LLC and Volant SVI Funding, LLC held additional facilities totaling not less than $211 million. Silver also said those lenders asserted liens on substantially all assets, with Brigade claiming cash-collateral rights and Argent and Volant holding second-priority liens. On the petition date, the debtors were seeking chapter 11 relief with secured obligations that management said exceeded $397 million.

Silver's customer letter said the company expected to preserve operations and emerge as a stronger airline, and trade outlets repeated the point that the carrier planned to continue flying. The First Day Declaration says the debtors needed immediate authority to use cash collateral and attributed the filing to operating problems and secured debt. By April, the debtors were seeking DIP financing and a sale process.

DIP Financing and a Sale Process With No Competing Bids

The debtors filed a cash collateral motion on January 2, 2025, and the court entered an interim cash collateral order on January 8. That relief allowed the airline to keep operating while management and lenders worked toward postpetition financing and a formal marketing process.

The next major step came on April 15, 2025, when the debtors filed a DIP motion seeking authority to borrow up to $5.5 million from KIA II LLC. The motion says the facility would fund working capital, case administration costs, and other court-approved expenses under a DIP budget, with roughly $2.75 million available on an interim basis. The proposed pricing included a 13% fixed interest rate, a 15% default rate, a 5% funding fee, and a 5% exit fee. The interim DIP order followed on April 22, and the final DIP order followed on May 16.

The DIP motion gave KIA II priming liens and a superpriority administrative claim, subject to the usual carve-out for U.S. Trustee fees and professional fees. It also tied maturity to the earliest of six months after closing, a sale closing, an acceptable plan effective date, or acceleration after default. Public reporting at the time described Silver as using the financing to stay in the air while it sought a buyer.

In the bidding procedures motion filed on May 2, 2025, Silver proposed a sale of substantially all Silver assets, excluding Seaborne and Silver's equity interests in Seaborne, and identified a stalking horse purchaser affiliated with the DIP lender. The motion says the stalking horse bid totaled $5,775,000 and would be funded through a credit bid of the amount due under the DIP facility. It also proposed a May 23 bid deadline, a May 28 auction if necessary, a June 3 objection deadline, and a June 5 sale hearing. A 5% break-up fee was part of the package. Local coverage of that filing described the offer as a $5.775 million stalking horse bid for the auction.

The court approved the process in the bidding procedures order entered on May 16, but approval of the process did not produce an actual market. Aerospace trade coverage later reported that Silver and its advisors had contacted more than 75 potential acquirers and finance parties and still failed to draw a qualified overbid. That public account fits the record. No competing bid supplanted the stalking horse, and the sale order entered on June 19 says Argentum Acquisition Co. LLC was both the stalking horse bidder and the only bidder.

The sale order approved a sale free and clear under section 363 and recited hearings on June 4, June 10, June 11, and June 18. The order also states that the consideration offered a better recovery than available alternatives. Public coverage described Judge Peter D. Russin as having approved the asset sale after the auction failed to generate a competing bidder. The stalking horse remained the winning bidder.

Shutdown, Trustee Appointment, and chapter 7 Conversion

On June 11, 2025, Silver stopped operating and told customers not to go to the airport. Travel-industry coverage described the shutdown as the end of a Florida-Caribbean route network that had continued flying during chapter 11. Local reporting after the shutdown focused on stranded travelers and unpaid employees.

On June 25, 2025, the court entered the order directing appointment of a chapter 11 trustee. The order says trustee appointment was in the best interests of creditors and the estates, requires management to cooperate and turn over books and records, and notes that the court's reasons were stated on the record rather than set out in detail in the written order. Public coverage described Judge Peter D. Russin as having ousted management and moved to appoint a trustee.

The motion to convert filed on July 15 by chapter 11 trustee Soneet R. Kapila says the estates were administratively insolvent, administrative claims continued to mount, substantially all assets had already been sold, and there was no business left to rehabilitate. Kapila asked to move the cases out of chapter 11 on that basis.

The court agreed in the conversion order entered on July 28, 2025. That order converted the cases to chapter 7, required immediate turnover of estate property and records, directed the filing of an accounting within 30 days, and required schedules of postpetition debts and remaining statements within 14 days. It also set a 90-day deadline for professionals to seek payment for chapter 11 work. Lowenstein later cited the case in a discussion of creditor consent problems.

By late July, the cases had converted to chapter 7. Sale proceeds, professional claims, employee-related issues, and other residual estate matters remained for the chapter 7 trustee to administer.

Seaborne's Separate Sale and the Asset Afterlife

Silver and Seaborne did not end on the same day or through the same process. The Silver bidding procedures motion carved Seaborne out of the initial Silver asset sale, and the Seaborne sale order entered on July 3, 2025 approved a separate transaction for the subsidiary. External coverage at the time reported that Seaborne continued operating after Silver itself stopped flying.

On July 29, 2025, Kapila filed a motion to operate Seaborne for a limited period under section 721. The motion says temporary operations were necessary to comply with the asset purchase agreement and transition-services agreement and to facilitate transfer of DOT and FAA certificates. It also says the bridge period was expected to last until November 8, 2025 at the latest, or earlier if the certificate transfer closed sooner. The filing describes a trustee-run bridge tied to the closing process and certificate transfer.

St. Thomas Source reported that Leonite Fund I acquired Seaborne for $1.425 million. At the same time, Aviation Week reported that a Wexford affiliate planned to launch Argentum Airways using Silver assets. Seaborne moved through its own transaction, while some Silver assets were slated for a successor platform.

Frequently Asked Questions

When did Silver Airways file for bankruptcy?

Silver Airways and Seaborne Virgin Islands filed chapter 11 on December 30, 2024. The debtors used the filing to keep operating while they sought financing and a buyer, and the customer letter sent at filing said tickets remained valid during that effort.

Why did Silver Airways file?

The First Day Declaration attributes the filing to ATR transition problems, spare-parts shortages, training constraints, delivery delays, and broader liquidity pressure. The same filing also points to a Menzies incident that sidelined an ATR72 for months and disputes over maintenance and engine reserves. Those operating issues landed on top of a debt stack that management said exceeded $397 million across the Brigade and Argent/Volant facilities.

How much secured debt did the company report?

Silver said in the First Day Declaration that Brigade was owed at least $186,793,159 through December 2024 and that Argent Funding and Volant SVI Funding were owed not less than $211 million. The filing also says those lenders asserted liens on substantially all assets, including cash collateral, which is why the debtors needed early authority to use lender-controlled cash.

What was the DIP facility?

The DIP motion sought authority to borrow up to $5.5 million from KIA II LLC, with pricing that included a 13% fixed rate, a 15% default rate, a 5% funding fee, and a 5% exit fee. The court entered the interim DIP order on April 22 and the final DIP order on May 16. Trade coverage described the facility as the bridge that let Silver keep flying while it pursued a buyer.

Did any competing bidder emerge at the auction?

No. The bidding procedures motion set up a sale process around a $5,775,000 stalking horse bid, but later reporting said Silver and its advisors had contacted more than 75 potential acquirers and finance parties without producing a qualified overbid. The sale order ultimately says Argentum Acquisition was both the stalking horse bidder and the only bidder.

Who bought Silver Airways' assets?

Argentum Acquisition Co. LLC became the successful bidder under the sale order entered on June 19, 2025. Public coverage described that ruling as approval of the lender-linked stalking horse transaction, including local sale coverage. The consideration was tied largely to the DIP credit bid rather than a third-party cash acquisition.

Why did the court appoint a chapter 11 trustee?

The written trustee order says appointment of a chapter 11 trustee was in the best interests of creditors and the estates and notes that the court's reasons were stated on the record. Outside coverage of the June 25 hearing described Judge Peter D. Russin as having removed management and pushed the case into a trustee-led wind-down. The trustee later argued that the estates were administratively insolvent and had no business left to rehabilitate.

Did Silver Airways confirm a chapter 11 plan?

No. The case did not end with a confirmed chapter 11 plan. Instead, Kapila filed the motion to convert on July 15, and the court entered the conversion order on July 28. Lowenstein later cited the case as a failed restructuring in its discussion of creditor consent problems.

What happened to Seaborne?

Seaborne did not shut down on the same timetable as Silver. The Seaborne sale order approved a separate transaction, and outside reporting said the subsidiary continued operating after Silver stopped flying. Later coverage reported that Leonite bought Seaborne for $1.425 million, while the trustee used the limited-operation motion to bridge certificate transfers and closing obligations.

Who is the claims agent for Silver Airways?

The court approved Kurtzman Carson Consultants, LLC, doing business as Verita Global, as the notice, claims, and solicitation agent in the final claims agent retention order. Verita handled the claims register and noticing function under that order.

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