Silver Airways, which filed for Chapter 11 bankruptcy protection in December, has designated Argentum Acquisition Co. LLC as a stalking horse bidder for a sum of $5.775 million, according to filings this week in the U.S. Bankruptcy Court for the Southern District of Florida.
The deal, which would require court approval, does not include Silver’s subsidiary, Seaborne Airlines, according to the 99-page asset purchase agreement filed Tuesday by Silver’s attorneys Brian P. Hall and Michael F. Holbein. However, it contains a clause that “in the event that no Qualified Bid … is submitted or received at the Auction for the assets of Seaborne,” the Argentum deal will be interpreted to include the assets of both airlines.
The move comes after financial firm KIA II LLC — an affiliate of Argentum and Wexford Capital of Connecticut and West Palm Beach in Florida — offered an initial $5.775 million in financing on May 2 to allow Silver to exit bankruptcy, which also set the floor for others who wish to bid on the troubled airline before a proposed May 23 deadline. KIA also provided Silver with $5.5 million last month so it could continue operating, according to court documents.
Argentum’s stalking horse bid comes after U.S. Trustee Mary Ida Townson filed a motion April 10 to dismiss the case because she felt there was little chance the airlines would succeed.
According to Townson, while Seaborne and Silver have a fleet of 16 aircraft and the value of their property totals almost $90 million, it “is completely encumbered by the liens of their secured creditors” to the tune of $400 million. Additionally, they owe $8 million to various taxing authorities and $27 million to general unsecured creditors, the motion states.
Among the Top 20 creditors is the V.I. Port Authority, which is owed $644,971 for airport rent and usage fees, according to the court filings.
Argentum is requesting that a bankruptcy auction be concluded on or prior to May 29.
The asset purchase agreement lists Wexford Capital Senior Vice President Wayne Heller as Argentum’s CEO. According to his LinkedIn profile, Heller is also president and CEO of Aleutian Airways, based in Alaska, and Sterling Airways, based in Jacksonville, Florida, where he is also CEO of Sterling Flight Training. He was executive vice president and COO of Republic Airways Holdings from 1999 to 2015.
Silver and Seaborne filed for bankruptcy protection in December via separate petitions, citing a need to restructure their finances and secure additional capital. The move came six years after Seaborne voluntarily reorganized in 2018 and announced it had secured a new $4.2 million credit facility and entered into a purchase agreement with Silver.
The airlines provide a critical link between St. Croix and St. Thomas and also serve the wider Caribbean region, with Silver headquartered in Fort Lauderdale, Florida, and Seaborne in San Juan, Puerto Rico.
Despite the bankruptcy filing, Silver Airways has assured customers that all tickets remain valid and that flights will continue to operate as usual.
