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According to an SEC filing, Spirit Airlines, Inc. (OTC:SAVEQ) CEO Ted Christie was paid a $3.8 million retention bonus just one week before the budget airline filed for bankruptcy.
The Details: Spirit Airlines filed for Chapter 11 bankruptcy protection on Monday and announced a comprehensive balance sheet restructuring plan aimed at reducing its debt and allowing the airline to continue to operate through the bankruptcy process.
Spirit's existing bondholders agreed to take a $350 million ownership position in a reorganized airline and erased $795 million of debt. They also agreed to provide $300 million of debt-in-possession financing, giving Spirit access to cash that will allow it to continue to pay employee wages and benefits through its reorganization.
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"This set of transactions will materially strengthen our balance sheet and position Spirit for the future while we continue executing on our strategic initiatives to transform our guest experience, providing new enhanced travel options, greater value and increased flexibility," Christie said.
The troubled airline also saw its stock delisted from the New York Stock Exchange (the ticker was SAVE) and is now trading in the over-the-counter marketplace. Spirit disclosed the shares are expected to be canceled and will have no value when the reorganization process is completed.
Spirit approved large retention bonuses for its top executives on Nov. 12, six days before the company announced the restructuring and filed for bankruptcy. CEO Christie’s retention bonus was $3.8 million, which he gets to keep if he remains with the company for another year.
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Photo: Courtesy of Spirit Airlines, Inc.
