Silver Airways: Zero Bids at Auction End Regional Airline's 14-Year Run

Silver Airways LLC, the Hollywood, Florida-based regional airline serving small Florida communities and Caribbean destinations with its ATR turboprop fleet, filed for chapter 11 bankruptcy on December 30, 2024, in the U.S. Bankruptcy Court for the Southern District of Florida after the carrier accumulated $376.5 million in debt while using cash at a high rate. The 14-year-old airline, which employed approximately 900 people and operated Essential Air Service routes subsidized by the Department of Transportation, aimed to emerge from restructuring by the first quarter of 2025 but instead lost $32 million during the chapter 11 case before receiving zero bids at its bankruptcy auction. On June 11, 2025, after DIP lender Wexford Capital declined to support continued operations, Silver Airways posted to Instagram instructing customers "Please do not go to the airport," and six weeks later, the case converted to chapter 7 liquidation.

Company Background

Silver Airways was formed in 2011 after Gulfstream International Airlines, a regional carrier that operated from 1988 until its bankruptcy in December 2010. When Gulfstream's assets went up for sale, Victory Park Capital acquired 21 Beechcraft 1900D aircraft and the operating infrastructure, establishing Silver Airways as a Florida-focused regional carrier headquartered in Hollywood. The new airline served small and mid-size communities that larger carriers did not serve, initially operating Essential Air Service routes in Montana and the Mid-Atlantic region during 2011 and 2012. By November 2013, Silver Airways was receiving $20,515,042 in annual federal subsidies for Essential Air Services.

Fleet modernization and the Seaborne acquisition. The airline's strategy shifted in 2017 and 2018 when Silver Airways made plans to convert its fleet from aging Beechcraft turboprops to newer ATR 600-series aircraft. These fleet conversion deals were cited by CEO Steven Rossum when filing for bankruptcy, stating issues were "rooted in deals dating back to 2017 and 2018." In April 2018, Silver Airways announced the acquisition of Seaborne Airlines, a San Juan-based carrier operating seaplane flights between St. Thomas and St. Croix in the U.S. Virgin Islands. The acquisition expanded Silver's Caribbean footprint and added a seaplane operation under the Seaborne Virgin Islands brand.

At its peak, Silver Airways operated a fleet of 14 ATR turboprops comprising eight ATR 42-600s and six ATR 72-600s, serving five Florida cities and 11 Caribbean destinations. The ATR 42-600 carries 46 passengers while the larger ATR 72-600 accommodates 70 passengers. By the time of the bankruptcy filing, the company maintained its Hollywood, Florida headquarters at 2850 Greensboro Drive and employed approximately 900 workers across its Florida and Caribbean operations. The airline's business model depended on connecting smaller Florida communities to hub airports and providing air links to Caribbean islands that larger carriers did not serve.

The Path to Bankruptcy

The COVID-19 pandemic affected Silver Airways' operating model. Like many airlines that filed for bankruptcy citing pandemic-related financial issues, Silver took on significant debt during the pandemic years to stay afloat. Regional routes to Caribbean destinations proved vulnerable to travel restrictions and demand collapse, leaving the airline with debt obligations it could not service once normal operations resumed. The company's filing listed up to $500 million in both debts and assets, though the actual debt burden continued to increase as the restructuring progressed.

Operational pressures compounded the debt burden. Post-pandemic recovery brought additional challenges: rising fuel costs eroded margins on already thin routes, aircraft parts costs increased, and the industry-wide pilot shortage forced labor cost pressures throughout the operation. Supply chain disruptions limited Silver's ability to operate as many aircraft as planned, reducing revenue capacity. Crew shortages created scheduling inefficiencies that led to higher pilot attrition rates.

Capital Structure at Filing.

The capital structure showed assets of about $90 million encumbered by approximately $400 million in secured debt. The $8 million tax liability added another priority claim ahead of general unsecured creditors, while the $27.7 million owed to trade creditors—vendors, suppliers, and service providers essential to airline operations—remained junior to secured and tax claims. After the pandemic years, management concluded that restructuring the carrier's financial affairs and operations was necessary.

Chapter 11 Restructuring

Filing and Initial Timeline.

CEO Steven A. Rossum filed chapter 11 petitions on behalf of Silver Airways LLC and Seaborne Virgin Islands, Inc. on December 30, 2024, initiating jointly administered cases before Judge Peter D. Russin. The company projected a timeline, intending to exit bankruptcy by the first quarter of 2025 while continuing operations throughout the restructuring process. Flights continued, employees remained at work, and passengers booked travel while the company pursued reorganization.

The First Day Declaration filed January 3, 2025, outlined causes of financial distress: pandemic-era debt accumulation, rising fuel and labor costs, fleet transition complications, and an inability to generate sufficient revenue on regional routes to service the capital structure. Court filings described debt taken on during COVID-19 to maintain operations, with management projecting a timeline of about 90 days.

Ongoing Losses.

The chapter 11 case showed continued losses. February 2025 brought losses of $467,000, and the first two weeks of March 2025 alone produced losses of $1.22 million. The airline reported negative cash flow since at least February 2025. By April 30, 2025, total debt had climbed to $376.5 million—a figure that included $37.8 million in debt accumulated during just the first four months of the calendar year.

The cumulative losses since filing reached $32,037,908. The U.S. Trustee later said neither Silver Airways nor its Seaborne subsidiary showed signs of returning to profitability, and operating losses continued during the case.

U.S. Trustee's Motion to Dismiss.

On April 10, 2025, U.S. Trustee Mary Ida Townson filed a motion to dismiss the chapter 11 cases, citing the perceived inability of Silver Airways and Seaborne Airlines to return to positive cash flow.

After the motion, Silver Airways pivoted to a sale process to seek a buyer willing to acquire the airline as a going concern.

DIP Financing.

To fund the sale process, Silver Airways obtained debtor-in-possession financing from KIA II LLC, an affiliate of Wexford Capital. The $5.5 million DIP facility, approved on an interim basis on April 22, 2025, provided working capital to maintain operations while the company marketed itself to potential buyers. The court entered the final DIP order on May 16, 2025, the same day it approved bidding procedures for the sale—setting the stage for an auction that would determine whether Silver Airways could survive under new ownership.

The DIP financing structure meant Wexford Capital, through its KIA II affiliate, held a secured claim against the debtors' assets.

Failed 363 Sale Process

Stalking Horse Bid and Marketing.

With DIP financing in place, Silver Airways launched a marketing process to find a buyer. The company's investment banker contacted over 75 potential acquirers and finance parties, pitching the opportunity to acquire a regional airline with established routes, an ATR fleet, and Caribbean operations. As CEO Steven Rossum later acknowledged, "Multiple parties expressed interest but ultimately all took a pass."

In May 2025, Argentum Acquisition Co. LLC emerged as the stalking horse bidder with an offer of $5.775 million. Wayne Heller, Wexford Capital's Senior Vice President, was listed as Argentum's CEO. Argentum had been established as a special purpose acquisition company by Wexford Capital, the same entity providing DIP financing. The bid structure consisted of a $5.5 million credit bid on the DIP loan plus $275,000 in cash.

Auction Cancellation.

The auction was scheduled for May 28 through June 4, 2025, following entry of the Bidding Procedures Order on May 16. The marketing process continued through the bid deadline. When the deadline passed, no qualified bids were received. The auction was cancelled. Despite contact with 75+ potential buyers, no party submitted a qualified bid above Wexford's credit bid.

The failure to attract bids left the stalking horse bid as the only offer for the assets.

Sale Approval.

On June 19, 2025, Judge Russin entered the Sale Order approving Argentum's $5.775 million stalking horse bid as the winning offer. The sale consisted primarily of the credit bid on the DIP loan.

Abrupt Shutdown

Wexford Withdraws Support.

Eight days before the sale closed, Silver Airways ceased operations. On June 11, 2025, Wexford Capital informed the company that it would no longer support continued operations. Without DIP funding, the airline could not pay for fuel, airport fees, crew wages, or other operating costs.

The company posted a message on Instagram: "We regret to inform you that we are ceasing operations as of today, June 11, 2025. Please do not go to the airport." The message directed customers holding tickets to seek refunds through their credit card companies or travel insurance. Travelers who had booked flights were stranded.

Silver Airways had reduced its fleet by half in the months leading up to the shutdown and was down to approximately 350 employees at cessation, compared with about 900 at filing.

Judicial Criticism of Management.

In hearings following the shutdown, the judge highlighted what he viewed as "sort of a laissez faire perspective to the finances," criticizing CEO Steve Rossum.

On June 25, 2025, Judge Russin ousted Silver Airways management and moved to appoint a trustee to wind down the bankruptcy. The court cited management's presentation about a potential bidder called Nella Airlines in connection with the decision and appointed independent oversight of the remaining estate.

Chapter 7 Conversion

Transition to Liquidation.

With operations ceased and no going-concern buyer, on July 28, 2025, the case converted from chapter 11 to chapter 7 liquidation on motion of Chapter 11 Trustee Soneet Kapila. Judge Peter D. Russin approved the conversion.

Chapter 7 Trustee Administration.

Soneet Kapila took control of the liquidating estate. On July 29, 2025, Kapila filed a motion seeking limited authority to continue operating the Seaborne subsidiary briefly while completing its separate sale process. The trustee retained specialized professionals: Richards Legal Group for aviation-specific legal matters and E-Hounds, Inc. for technology consulting related to the estate's data and systems.

On August 13, 2025, the trustee filed a Notice of Intent to Abandon Property, beginning the process of returning assets that could not be monetized to the parties that held liens against them. The ATR aircraft returned to their lessors, the airport slots and routes lapsed, and the infrastructure that had supported Silver Airways' operations was dismantled.

Employee Claims and WARN Act Liability.

The shutdown triggered substantial employee claims against the estate. Approximately 900 employees lost their jobs, many without the 60-day advance notice required by the Worker Adjustment and Retraining Notification (WARN) Act. Numerous former employees filed administrative expense claims for unpaid wages and WARN Act damages, documented in docket entries 877 through 887. The trustee established procedures for processing these claims.

Pilots, flight attendants, mechanics, and ground staff who had continued working through the bankruptcy—often at reduced pay or delayed compensation—became creditors in the liquidation.

Seaborne Virgin Islands

Separate Sale Process.

While Silver Airways ceased operations, its Caribbean subsidiary continued flying. Seaborne Virgin Islands, Inc., operating seaplane service between St. Thomas and St. Croix, maintained normal operations through the parent company's shutdown. Executive Director of Operations Philip Lambrechts confirmed that Seaborne continued operating as a distinct carrier with its own route network and customer base.

On July 3, 2025, the court entered a separate Sale Order for Seaborne Virgin Islands. The subsidiary accepted bids through the second week of July, with a sale expected to finalize by August 1, 2025.

Seaborne's operations were separate from Silver's mainline operations. The seaplane service connecting the U.S. Virgin Islands served routes between St. Thomas and St. Croix.

Argentum Revival Plans

Despite the operational shutdown, Wexford Capital moved forward with plans to revive some Silver Airways routes under new ownership. Argentum Acquisition Co., the stalking horse bidder that acquired Silver's assets, announced plans to start service with one ATR aircraft before expanding to two by year end. Initial routes were expected to include former Silver Airways markets in Florida and the Bahamas.

The investment firm also owns Sterling Airways, which operates in Alaska's Aleutian Islands under the Aleutian Airways brand.

Starting a new airline using acquired assets and routes requires Federal Aviation Administration certification, Department of Transportation authorization, and various state and local approvals.

Key Timeline

Industry Context: Regional Aviation Distress

Silver Airways' failure occurred during a period of regional airline distress in the mid-2020s. Several airlines that filed for bankruptcy cited COVID-19-related financial issues as a primary cause, and pandemic-era debt accumulated in 2020 and 2021 created capital structures that were difficult to service once operations resumed. The combination of pandemic debt, rising fuel costs, labor shortages, and competitive pressure from larger carriers continued to pressure regional operators.

Structural challenges facing regional carriers. The regional aviation business model depends on serving routes that larger airlines decline to operate—communities too small to justify mainline jet service, but large enough to support turboprop operations. Routes must generate sufficient revenue to cover costs while competing with driving alternatives and low-cost carriers on connecting itineraries. When fuel prices rise or demand softens, regional operators lack the scale economies and route diversification available to larger carriers.

The pilot shortage impacted regional carriers. Major airlines increased pay and benefits to attract pilots, drawing experienced aviators away from regional operators who could not match the compensation. Silver Airways' crew planning inefficiencies and higher attrition rates reflected this competition for qualified pilots.

Essential Air Service subsidies were not sufficient to sustain operations on some routes. Silver Airways received over $20 million annually in EAS subsidies. The DOT's EAS program continues to face higher costs in serving small communities while appropriations remain constrained.

Frequently Asked Questions

When did Silver Airways file for bankruptcy?

Silver Airways LLC filed for chapter 11 bankruptcy on December 30, 2024, in the U.S. Bankruptcy Court for the Southern District of Florida. The petition, filed by CEO Steven A. Rossum, included both Silver Airways and its Caribbean subsidiary Seaborne Virgin Islands, Inc., under joint administration before Judge Peter D. Russin.

Why did Silver Airways shut down?

After losing $32 million during the chapter 11 case and receiving zero bids at the May-June 2025 auction, DIP lender Wexford Capital declined to continue funding operations. On June 11, 2025, the airline abruptly ceased all flights, posting on Instagram that customers should not go to the airport.

What happened to the bankruptcy auction?

Despite marketing the airline to over 75 potential acquirers and finance parties, no qualified bids were received by the deadline. The auction scheduled for May 28 through June 4, 2025 was cancelled. CEO Steven Rossum acknowledged that multiple parties expressed interest but "ultimately all took a pass."

Who bought Silver Airways' assets?

Argentum Acquisition Co. LLC, a special purpose company controlled by Wexford Capital (the DIP lender), acquired the assets for $5.775 million. The bid consisted primarily of a $5.5 million credit bid on Wexford's DIP loan plus $275,000 in cash.

What was the final case outcome?

The case converted from chapter 11 to chapter 7 liquidation on July 28, 2025. Soneet Kapila was appointed Chapter 7 Trustee to administer the liquidating estate, process employee claims, and distribute any remaining value to creditors.

What happened to Seaborne Airlines?

Seaborne Virgin Islands, Inc., Silver's Caribbean seaplane subsidiary, continued operating despite the parent company's shutdown. A separate sale order was entered July 3, 2025, with a sale expected to finalize by August 1, 2025. Seaborne's distinct route network and customer base allowed it to survive as a standalone operation.

How many employees lost their jobs?

Approximately 900 employees lost their jobs when Silver Airways ceased operations. The sudden shutdown triggered potential WARN Act liability for failure to provide 60-day notice, with numerous former employees filing administrative expense claims for unpaid wages and damages.

What did the bankruptcy judge say about management?

Judge Peter Russin criticized management's "laissez faire perspective to the finances" and placed substantial blame on CEO Steve Rossum. On June 25, 2025, the judge ousted management and moved to appoint a trustee to wind down the bankruptcy, citing the court's discretion under the Bankruptcy Code.

Will Silver Airways routes resume?

Argentum, the asset purchaser controlled by Wexford, announced plans to restart service with ATR aircraft on former Silver Airways routes in Florida and the Bahamas. The revival depends on obtaining regulatory approval from the FAA and DOT. Wexford also owns Sterling Airways, which operates as Aleutian Airways in Alaska.

What caused Silver Airways' financial problems?

Multiple factors contributed to the airline's collapse: pandemic-era debt accumulation that created an unsustainable capital structure, rising fuel and labor costs that eroded margins, crew shortages that impaired operational reliability, fleet transition complications dating to 2017-2018 deals, and fundamental route economics that could not generate sufficient revenue to service the debt load.

Who is the claims agent for Silver Airways?

Verita Global (Kurtzman Carson Consultants) serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.

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