Spirit Airlines Facing Shareholder Lawsuit Over Potential Deal With Frontier
Spirit Airlines is one of the nation’s top low-cost commercial carriers. It is headquartered in Miramar, Florida. The company is currently prepared to pursue a merger with one of the nation’s other most prominent budget carriers, Frontier Airlines. In recent weeks, the deal has been disrupted by a late-attempt by JetBlue to buy Spirit outright.
According to a report from Paddle Your Own Canoe, a shareholder of Spirit Airlines has filed a lawsuit against the company alleging that investors were “materially misled” by management in an effort to get support from the merger deal with Frontier. In this blog post, our West Palm Beach shareholder disputes attorney provides a more detailed explanation of the shareholder lawsuit.
Background: Management of Spirit Airlines Strongly Supports the Merger With Frontier
As background to this shareholder lawsuit, it is important to emphasize that top management at Spirit Airlines is strongly supportive of the proposed merger with the Denver-based carrier Frontier Airlines. JetBlue has launched a hostile takeover attempt of Spirit Airlines. Notably, JetBlue’s takeover offer is $30 per share, which is more than 60 percent higher than the current value of the Spirit Airlines stock price. On May 25th, 2022, the Spirit Airlines stock price closed at just under $19.00 per share. Spirit Airlines executives argue that the Frontier merger offers better long-term financial prospects for the company.
Allegations: Spirit Management is Misleading Shareholders to Gain Support for the Merger
Several lawsuits have been filed against Spirit Airlines in relation to the proposed merger with Frontier Airlines. The latest shareholder lawsuit was filed in New York by an investor named Miriam Nathan. In her claim, Ms. Nathan contends that top management at Spirit Airlines made false and materially misleading statements to regulators and investors in an effort to push the proposed merger forward.
Spirit Airlines has put together a number of different financial projections in its disclosure to federal regulators. These projections are available to the public. However, Ms. Nathan contends that the projections are not supported by adequate evidence. She contends that the information is materially misleading and incomplete.
Further, the shareholder lawsuit alleges that management at Spirit Airlines is raising inconsistent concerns about regulatory risk. Spirit Airlines executives have publicly stated that they are concerned that any JetBlue acquisition stands a strong risk of being blocked by federal antitrust regulators. The shareholder lawsuit contends that the same risk exists with the Frontier Airlines merger deal, but Spirit Airlines management has not made concerns or disclosed preparations.
Get Help From Our West Palm Beach Shareholder Attorney Today
At Pike & Lustig, LLP, we are devoted to helping clients solve problems. With extensive experience handling complex shareholder cases, our attorneys have the skills to protect your best interests. If you have any questions about shareholder litigation, we are here to help. Call us today for a strictly private consultation. From our offices in West Palm Beach, Miami, and Wellington, we handle shareholder disputes and shareholder litigation throughout South Florida.