Spirit Airlines Shareholder Calls Out CEO Who Got $3.8M Bonus Ahead Of Bankruptcy

In a filing related to the airline’s Chapter 11 bankruptcy process, a Spirit Airlines shareholder has called out the company’s chief executive for his contradictory statements and actions he made before the company began voluntarily restructuring its debt under court’s supervision.

Egregious actions

In a filing on December 2, a Spirit Airlines shareholder addressed a letter to Judge Sean Lane, who is presiding over the carrier’s Chapter 11 bankruptcy case at the United States Bankruptcy Court for the Southern District of New York, expressing concerns about the events surrounding the bankruptcy process.

The stakeholder said that the actions of Ted Christie, the chief executive officer (CEO) of Spirit Airlines, were contradictory, which included the retention of the law firm Davis Polk & Wardwell and denying any bankruptcy plans in February. The law firm has served as the airline’s restructuring counsel during the case.

Talks of a potential Chapter 11 bankruptcy had begun after the US Department of Justice (DOJ) successfully sued against the JetBlue and Spirit Airlines merger, with the transaction being abandoned by both airlines in March.

“I am writing to bring to light the egregious actions of Ted Christie, CEO of Spirit Airlines, whose leadership has caused devastating harm to retail investors.”

According to the letter’s author, this was not an isolated incident since Christie, an ex-key executive at Pinnacle Airlines, a holding company that owned several regional carriers in the US and emerged from its Chapter 11 process as a subsidiary of Delta Air Lines as Endeavor Air in 2013, made decisions during the latter bankruptcy that had wiped out shareholders’ investments.

“Now, at Spirit Airlines, he is once again abusing bankruptcy laws to eliminate equity holders, destroying the hard-earned life savings of ordinary people.”

The carrier’s shareholders were misled and lied to since they believed their investments were supporting a company that was committed to overcoming its financial distress, the shareholder added.

“Instead, these shareholders—many of whom are retirees, working families, and individuals relying on these investments for their future—have been discarded like collateral damage.”

Executives’ bonuses

The shareholder expressed frustration over the fact that Christie, as well as other C-level executives, will receive substantial one-time cash retention awards according to the terms of the retention agreement, which Spirit Airlines revealed in a Securities and Exchange Commission (SEC) filing on November 18.

In total, Spirit Airlines will pay out $5.3 million in retention awards to five C-level executives, including $3 million to its CEO and the second-highest award of $850,000 going to John Bendoraitis, the chief operating officer (COO) of the airline.

“This gross enrichment of the very people responsible for Spirit’s financial collapse has come directly at the expense of shareholders who trusted the company with their life savings.”

The shareholder also questioned the carrier’s decision to go through the bankruptcy process. They rhetorically asked where was the $560 million in cash from the sale of 23 Airbus A320ceo/A321ceo aircraft (the actual sum was $519 million, with Spirit Airlines disclosing that the transaction would improve its liquidity by $225 million through year-end 2025) or the $76 million break-free fee from JetBlue (the actual sum was $69 million).

The latter does not include JetBlue’s payments to Spirit Airlines’ shareholders, with the former paying the latter’s shareholders $425 million at the end of Q3.

Lastly, the disgruntled shareholder questioned Spirit Airlines’ decision to invest $250 million into its global headquarters near Fort Lauderdale-Hollywood International Airport (FLL).

“Why can’t they not sell more planes, sell brand new global Headquarters and cut flying routes, operate airlines with few planes and few headcount [?] Looks like all this is pre planned to wipe out the shareholder before merging with other airlines.”

While Spirit Airlines had planned to end the year with $1 billion in liquidity, a recent SEC filing by the airline unveiled that at the end of Q3, the company had $593.6 million of cash, cash equivalents, and restricted cash.

Its planned debt repayment schedule, which was valid as of September 30, before it declared Chapter 11 bankruptcy, were $33.5 million in Q4, $1.1 billion alone in 2025.

Calling for investigation

Thus, the shareholder demanded a thorough investigation of Christie’s actions, accusing that the bankruptcy was intentional. They also shared open letters to Christie and the US Trustee Program, which were uploaded on a website with a domain that clearly expressed anger towards Spirit Airlines’ CEO.

“As a shareholder and I believe that I am not alone, I stand to lose my investment entirely under the current plan.”

They detailed that they own 18,417 shares across various savings accounts. Considering that Spirit Airlines had 109.5 million outstanding shares before it was delisted from the New York Stock Exchange (NYSE) following its bankruptcy, the shareholder had a 0.01% stake in the airline.