Regional South Florida airline Silver Airways ceased flying early Wednesday, stranding passengers around the state, throwing hundreds of employees out of work and infuriating a U.S. Bankruptcy Court judge who thought a turnkey deal was in place to sell the financially troubled airline to a private investment firm.

The unexpected grounding — which is permanent — came shortly before midnight Tuesday with the last flight arriving at Fort Lauderdale-Hollywood International Airport from Tallahassee.

Seaborne Airlines, an affiliated carrier that serves the U.S. Virgin Islands, will continue to operate.

CEO Steven Rossum notified about 350 of the company’s remaining employees via email late Tuesday that the company was going out of business..

“It is with a heavy heart that I share the difficult news that, after months navigating through Chapter 11 bankruptcy, our journey at Silver Airways is coming to an end for most of us,” he wrote. “Wexford Capital—our DIP lender—has informed us they will no longer support operations or, except for a few, retain our employees. As a result, Silver Airways will cease operations on Wednesday June 11 and begin the wind-down process. A small group will be asked to stay on temporarily to assist with asset management and records. Those individuals will be contacted directly.  Seaborne will continue to operate as scheduled.”

The decision left passengers stranded at five Florida airports — including Fort Lauderdale-Hollywood International — and 11 locations in the Bahamas and the Caribbean.

“Silver Airways left me stranded in Tampa,” wrote a passenger from Broward County via email at 1:47 a.m. Wednesday. “They went out of business I guess.”

In a separate announcement, Silver advised passengers not to go to their local airports as the airline ceased operations.

“We regret to inform you that we are ceasing operations as of today, June 11, 2025,” the statement said. “In an attempt to restructure in bankruptcy, Silver entered into a transaction to sell its assets to another airline holding company, who unfortunately has determined to not continue Silver’s flight operations in Florida, the Bahamas and the Caribbean.”

For many passengers flying out of Fort Lauderdale-Hollywood, Silver was the only airline flying to several Bahamian destinations, according to airport spokeswoman Arlene Satchell. They include Bimini, North Eleuthera, Georgetown and Marsh Harbor. Western Air and Bahamas Air both serve Freeport.

In Florida, Silver was the only carrier flying from Broward to Tallahassee and Key West. For travelers headed for Tampa, Spirit Airlines and Southwest Airlines remain options.

For those whose future flights were canceled, Silver said all credit card purchases should be refundable through their credit card companies. The airline also advised its customers to seek assistance from their travel agencies.

Both Silver, which is based in Hollywood, and Seaborne filed for Chapter 11 bankruptcy protection last Dec. 30 after a key lender cut off funding, creditors pressed for payments on past due bills and no one stepped forward to rescue the businesses in a buyout. At filing, the airline owed secured and unsecured creditors more than $400 million.

A subsequent sales effort during the Chapter 11 proceeding in May ended with the same result after U.S. Bankruptcy Judge Peter Russin authorized an auction that attracted no qualified bids to challenge a “stalking horse offer” made by an affiliate of Wexford Capital. In April, the Wexford affiliate KIA II LLC provided $5.5 million in debtor-in-possession financing so that Silver could continue flying. Another affiliate, Argentum Acquisition, submitted a $5.775 million to buy Silver.

An unwelcome turn

Lawyers for both Silver and Wexford appeared before Russin on Wednesday, who was stunned by the shutdown, as well as by the news from Silver and Wexford that the financial firm no longer intended to acquire the airline’s operations as planned.

Russin had been expecting that the two sides had finalized a transition service agreement where Silver would operate the airline temporarily while the Wexford affiliate acquired an operating certificate from the Federal Aviation Administration, a process that normally takes 60 days.

But attorney Michael Shiner, representing Wexford, said his client retreated after finding that Silver’s finances had severely deteriorated since the Memorial Day holiday.

The cause: Shortly before Memorial Day, the Federal Aviation Administration mandated a temporary shutdown of the airline over the lack of updated battery kits for Silver’s eight ATR turboprop planes.

The airline resumed operations after the FAA authorized a workaround where Silver would fly only by day and under visual rules, Geoffrey Jacobs, assistant chief pilot, told the South Florida Sun Sentinel in a post-hearing interview.

In court, Silver attorney Brian Hall told the judge the episode cost the airline $1 million in lost revenue.

The loss exacerbated a financial condition that saw Silver’s service profile diminished considerably as its fleet of French-made ATR turbo-props was cut in half to eight. As of late Tuesday, Silver had been serving just five Florida cities and with 11 island destinations in the Bahamas and Caribbean. The work force, once as high as 900 people, had declined in number to about 600 at the Chapter 11 filing and to 348 at the end of April.

The final Florida destinations served by Silver included Fort Lauderdale-Hollywood International Airport, which served as a hub for flights to Tampa, Tallahassee, Pensacola and Key West. Seaborne’s flights operate between St. Thomas and St. Croix.

 Anger from the bench

On Wednesday, Russin proceeded to take the lawyers — and Rossum, the CEO — to the proverbial woodshed. He called the bankruptcy case a “disaster” and a “failure,” and informed the lawyers he thought he had not been apprised of all of the facts. He also questioned Rossum’s management of the case.

Rossum did not respond to the Sun Sentinel’s request for comment.

By the hearing’s end, the lawyers provided Russin with the following outlook:

• Wexford still wants a deal, but only one that will yield the airline’s inventory, accounts receivables and a flight certificate. It does not want to assume the leases of Silver’s planes. Shiner said Wexford has no intention of operating the airline. A revised sales agreement was to be drafted Wednesday and submitted to the court and Silver’s creditors. Shiner said Wexford never had any intention of paying off the pre-bankruptcy debts of Silver’s creditors.
• Seaborne, the Caribbean affiliate, will be put up for auction at some point after July 4, according to Hall, the Silver attorney. He said two bidders have expressed interest in the company.
• Silver’s planes, which now number eight, are being rounded up and returned to their owners.
• A nominal number of Silver employees will continue to work for the buyer, Wexford, which will pay them.
• An unspecified amount of cash remains in Silver’s bank accounts. Russin advised Rossum to manage it “with care.”

As Wednesday’s hearing came to a close, it was not lost on Judge Russin that more than a dozen Silver employees,  some of them pilots dressed in their uniforms, had been watching from the back of the courtroom.

“I feel your pain,”: Russin said. He added that he’d approved the auction in part because he wanted to see the workers’ jobs preserved.

Generally speaking, he said, the bankruptcy court system works “incredibly well.”

“But it didn’t work in this case,” he said.