Regional carrier Silver Airways, which has been operating all year under Chapter 11 bankruptcy protection, has acquired more cash and additional time to hammer out a reorganization plan and potentially find a buyer who can take over a company that has served Florida, the Bahamas and the Caribbean for more than a decade..

The Fort Lauderdale-based airline, whose Florida route network has diminished to five cities, filed its bankruptcy petition last Dec. 30 along with its subsidiary Seaborne Virgin Islands. Upon filing, Silver management penned an open letter to customers, saying “we anticipate completing this process by the first quarter of 2025.”

But the first quarter has come and gone, with no acquisition deals on the horizon. And absent an interested buyer, the airline has come under pressure from creditors who want to be paid for services rendered during the Chapter 11 bankruptcy proceedings. The case is assigned to U.S. Bankruptcy Judge Peter Russin in Fort Lauderdale.

Since the filing, Silver’s fleet has been cut in half and its staff has declined from a little more than 600 people to 448, according to court records. And the U.S. Trustee’s Office, whose mission it is to protect creditor rights, has asked the judge to dismiss the case on the grounds that there are few signs that a reorganization can succeed.

The court file is peppered with requests from creditors such as airport authorities, aircraft owners and a fuel provider seeking payment for fees incurred and services provided since Silver and Seaborn entered bankruptcy court.

Positive signs

But at a court hearing Thursday, Judge Russin approved the airline’s request to extend the period in which the companies have the exclusive right to work up a bankruptcy organization plan and win creditor approvals. The original period expires April 29. The deadline for filing a plan is now June 28. The date for acquiring creditor backing is Aug. 27.

The judge acted after a lender from Greenwich, Conn., called KIA II LLC came up with a $5.5 million loan to be used to help fund day-to-day operations and pay creditors.

Silver attorney Michael Holbein told the court that no one has stepped forward to file a competing plan to take over the company.

Meanwhile, Silver is now serving just five Florida cities after dropping Orlando last month. From a hub operation at Fort Lauderdale-Hollywood International Airport, Silver offers flights to Key West. Tampa, Tallahassee and Pensacola.

The airline also serves several destinations in the Bahamas from the Broward airport including Bimini and Freeport. From San Juan, Puerto Rico, the airline website lists flights for St. Maarten, St. Kitts, Tortola, St. Thomas and St. Croix. A website map shows its subsidiary, Seaborne, also operating under Chapter 11, flying between the two enclaves in the U.S. Virgin Islands.

Cash burn

But in its motion to dismiss the case filed April 10, which was written before the new loan money arrived, the U.S. Trustee’s Office effectively told the court that the recovery prospects are thin for Silver and its seaplane affiliate in the Caribbean.

“While the Debtors may have been able to project and earn weekly receipts exceeding $2,000,000 for prior periods, the Debtors do not appear to consider that their fleet size is significantly reduced by half, and that such reduction will similarly reduce, if not hamstring, the Debtors’ already-negative cash flow,” wrote Mary Ida Townson, the U.S. Trustee for Region 21, which covers Georgia, Florida, Puerto Rico, and the U.S. Virgin Islands.

A company spokesperson did not respond to an emailed request Thursday for comment on the trustee’s motion..

According to the motion, the value of Silver’s assets was just short of $90 million when it filed for Chapter 11.

But that property “is completely encumbered by the liens of their secured creditors,” the trustee said. The creditors are led by Brigade Capital Management of New York, Argent Funding, LLC, an arm of the St. Louis asset management firm, Argent Capital,  and Volant SVI Funding, LLC.,  a Delaware company affiliated with Versa Capital of Philadelphia.

The total lien amount: $400 million.

A hearing on the trustee’s dismissal motion is set for May 7.