Seaborne Faces Possible Shutdown as Carrier Bleeds Millions and Shows No Recovery Path; Trustee Calls For Dismissal of Chapter 11 Proceedings

The U.S. Trustee for Region 21 has filed a motion in the Southern District of Florida Bankruptcy Court seeking dismissal of the Chapter 11 cases jointly filed by Silver Airways, LLC and Seaborne Virgin Islands, Inc., citing substantial and continuing losses to the estate and an absence of a reasonable likelihood of rehabilitation.

In the motion, U.S. Trustee Mary Ida Townson argues that the case meets the criteria for dismissal under Section 1112(b)(4)(A) of the U.S. Bankruptcy Code. The provision allows for dismissal when a debtor’s financial trajectory shows persistent losses and little chance of recovery.

Silver Airways and its affiliate, Seaborne Virgin Islands, Inc., filed for Chapter 11 protection on December 30, 2024. Since that filing, the companies have continued operating as debtors-in-possession, with no trustee appointed and no requests made for their removal.

At the time of filing, the companies disclosed ownership of 16 aircraft, including 14 ATR-600 series planes and two DeHavilland Twin Otter Seaplanes. However, all of their assets, valued at approximately $89.9 million, were fully encumbered by $400 million in secured debt held by Brigade Capital Management, Argent Funding, LLC, and Volant SVI Funding, LLC.

In addition to their secured debt, the companies owed approximately $8 million to various taxing authorities and $27.7 million to general unsecured creditors.

From the date of filing through March 14, 2025, Silver Airways and Seaborne reported $22.57 million in total receipts and $22.33 million in disbursements. While this represents a slight positive net of $238,000, the financials tell a more troubling story.

In February 2025, the companies posted a net loss of $467,000, followed by a loss of $1.22 million in just the first two weeks of March. Projections for the second half of March anticipated additional net losses of $1.24 million.

According to operating reports, the total losses since the bankruptcy filing amount to $32.04 million, with no indication of profitability during the reorganization period.