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Precedent

The Spirit Airlines data sale

A proposed sale of a debtor's internal operating records to an AI developer, contested by labor unions, vendors and members of Congress. This page summarizes the court record for debtors' counsel, trustees, financial advisors and chief restructuring officers, with each objection and the response the record gives to it.

Status: Not yet approved

  • No order approving the sale has been entered.
  • The sale hearing is set for 11:00 a.m. ET on November 6, 2026 before Judge Sean H. Lane in White Plains, with replies due by noon on November 4. It has been adjourned five times since August 19.
  • The consumer privacy ombudsman now recommends approval from a consumer-privacy perspective. Labor and vendor objections remain on file, and the debtors say they are working to resolve them.

Docket last checked October 21, 2026 (Dkt. 1740, filed October 20, 2026). Dkts. 1695, 1684

Case
In re Spirit Aviation Holdings, Inc., No. 25-11897 (SHL), Bankr. S.D.N.Y.
Successful bid
Google LLC, $10,000,000 Dkt. 1463
Alternate bid
Mercor.io Corporation, $7,500,000 Dkt. 1463
Later competing offer
micro1 Inc., $12,500,000 (notice of intent, Sept. 3) Dkt. 1556
Ombudsman
Lucy L. Thomson, appointed under section 332 Dkts. 1350, 1380
Hearing
November 6, 2026, 11:00 a.m. ET Dkt. 1695

Case summary

Parties

Seller: Spirit Airlines, LLC, a debtor in the Spirit Aviation Holdings chapter 11 cases. Buyer: Google LLC. Debtors' counsel: Davis Polk & Wardwell. The auction was moderated by Davis Polk and PJT Partners.

Dkts. 1463, 1470; Stretto Intelligence, Sept. 13, 2026

What is being sold

Deidentified enterprise data: email, SharePoint, OneDrive and Teams content, core business systems and workflow data. As scheduled in August, the flight attendants' union counted roughly 100 million emails, 500 million Teams items, 175,658 employee records dating from 1986, 3,426,618 payroll records and 148,018 tax forms. Google's counsel told the ombudsman the data will be used to train AI models.

Dkts. 1463, 1489, 1581; Stretto Intelligence, Sept. 13, 2026

What was taken out

Consumer-facing databases were never included (customer profiles, Free Spirit loyalty data, Savers Club, social media and survey data). Before the ombudsman's first report, Google agreed to drop passenger reservation and transaction data, refunds, inflight purchases, Wi-Fi sales and timecards. The flight attendants' union reports that the debtors also agreed to exclude medical and disability data, accommodations, leave, drug and alcohol testing records and union records.

Dkts. 1594, 1684, 1656

Proposed safeguards

These are terms of the sale agreement and representations to the court, not yet a court order.

  • An independent deidentification agent (Tonic.ai), selected by the debtors and paid for by Google.
  • Certified deidentification is a closing condition: nothing transfers until the data is certified deidentified.
  • Before the first transfer and every transfer after it, the agent files an affidavit with the court certifying deidentification.
  • Quality-control testing for reidentification through direct and indirect identifiers, free text, unique characteristics and record linkage.
  • The California Consumer Privacy Act deidentification standard, adopted voluntarily: the buyer publicly commits not to reidentify, and onward transfers require the same commitment.

Dkts. 1594, 1684

Court proceedings

Key filings in date order. Docket numbers link to the public copy of each filing.

  1. May 27, 2026

    Bidding procedures motion

    The debtors move for approval of bidding procedures for the sale of their assets.

    Dkt. 1117

  2. Jun 22, 2026

    Bidding procedures order

    The court approves the bidding procedures under which the data was later auctioned.

    Dkt. 1213

  3. Jul 15 to 23, 2026

    Consumer privacy ombudsman appointed

    The court so-orders a stipulation directing the U.S. Trustee to appoint an ombudsman. The U.S. Trustee appoints Lucy L. Thomson, and the court approves the appointment under section 332.

    Dkts. 1332, 1350, 1380

  4. Aug 11 to 12, 2026

    Ombudsman's late start

    The ombudsman receives data room access on August 11 and asks for more time, noting her appointment came only 21 business days before the scheduled hearing.

    Dkt. 1446; Stretto Intelligence, Sept. 13, 2026

  5. Aug 14, 2026

    Auction

    Google LLC is the successful bidder at $10,000,000; Mercor.io Corporation is the alternate at $7,500,000. In the bidding, the debtors treated a $5.2 million Mercor bid using third-party deidentification as higher than $7 million with in-house deidentification; Mercor's later $10 million in-house offer was not selected.

    Dkts. 1463, 1470; Stretto Intelligence, Sept. 13, 2026

  6. Aug 18 to Sept 4, 2026

    Objections filed

    The flight attendants' union (AFA-CWA) objects; the Professional Airline Flight Control Association, the IAM and TWU Local 570 join. Springshot, International Aero Engines and the pilots' union (ALPA) file their own limited objections.

    Dkts. 1489, 1521, 1539, 1508, 1538, 1558

  7. Aug 18, 2026

    First adjournment

    Hearing moved from August 19 to September 9.

    Dkt. 1488

  8. Sept 3, 2026

    micro1 notice of a $12.5 million bid

    micro1 Inc. gives notice of intent to bid $12,500,000, with in-house deidentification and proposed employee-data covenants. No debtor response appears on the docket.

    Dkt. 1556

  9. Sept 4, 2026

    Second adjournment

    Hearing moved from September 9 to September 16.

    Dkt. 1557

  10. Sept 8, 2026

    Ombudsman's first report

    A conditional recommendation: to approve the sale, the court should adopt conditions on verification and certification, transparency, children's data, reidentification and security.

    Dkt. 1581

  11. Sept 9, 2026

    Google's preliminary response

    Google says the sale is not a sale of consumer data, that consumer databases are excluded entirely, and that certified deidentification by an independent agent is a closing condition.

    Dkt. 1594

  12. Sept 11, 2026

    Third adjournment

    Hearing moved from September 16 to September 30.

    Dkt. 1601

  13. Sept 14 to 25, 2026

    Further objections and supplements

    Navitaire and Amadeus object and join IAE. AFA and ALPA file supplemental objections.

    Dkts. 1602, 1656, 1658

  14. Sept 28, 2026

    Fourth adjournment

    Hearing moved from September 30 to October 14.

    Dkt. 1663

  15. Oct 1, 2026

    Proposed amicus brief

    The Electronic Privacy Information Center and Professor Seema N. Patel seek leave to file a brief supporting AFA.

    Dkt. 1677

  16. Oct 5, 2026

    Ombudsman supports approval

    Her supplemental report finds approval appropriate from a privacy perspective, after passenger databases were excluded and Tonic.ai was engaged. She did not assess risks to employees or third parties.

    Dkt. 1684

  17. Oct 8, 2026

    Letter from 121 members of Congress

    Rep. Steven Horsford and Sen. Elizabeth Warren, with 119 colleagues, ask Spirit and Google for employee-data protections before any transfer. Not a court filing.

    Rep. Horsford press release, Oct. 8, 2026

  18. Oct 9, 2026

    Fifth adjournment

    Hearing moved from October 14 to November 6, with a reply deadline of November 4. Springshot files a supplemental objection the same day.

    Dkts. 1695, 1693

  19. Nov 4, 2026Scheduled

    Reply deadline

    Replies due by 12:00 p.m. ET.

    Dkt. 1695

  20. Nov 6, 2026Scheduled

    Sale hearing

    11:00 a.m. ET, hybrid; witnesses in person only. Outcome pending.

    Dkt. 1695

Objections and responses

Each objection is stated as fairly as we can, then answered first from the record: the debtors' and Google's filings, the ombudsman's findings and the agreed changes. Where we add our own argument, it is labelled as WKD's view. Every objector that addressed the point said it does not seek to unwind the auction or reduce the price. Dkts. 1489, 1508, 1538, 1558; Stretto Intelligence, Sept. 13, 2026

Employee confidentiality

Raised by Association of Flight Attendants-CWA (AFA), joined by the Professional Airline Flight Control Association, the IAM and TWU Local 570; supported by proposed amici EPIC and Prof. Seema N. Patel. Dkts. 1489, 1656, 1521, 1539, 1677

Objection

Deidentification removes names but not confidential content, and the sale's privacy terms were written for consumers while the data is mostly about employees.

On the record

WKD’s view

The objection goes to the terms, not to the sale, and AFA itself named the remedy: defined content categories, a search across unstructured data that flags them, and a certified protocol. An estate can offer that from the start. Excluding by system rather than by content, and not disclosing search terms, is what kept this objection open.

Status: Unresolved on the docket. AFA reports Google has not agreed to exclude flight attendant tax forms.

Reidentification risk

Raised by 121 members of Congress (letter); ALPA; AFA. Dkts. 1658, 1489; Rep. Horsford press release, Oct. 8, 2026

Objection

Removing names and direct identifiers does not make data anonymous, because modern AI can connect patterns across large datasets; preserving links across records makes it easier.

On the record

WKD’s view

These controls are strong for consumers. The ombudsman said she did not assess employee risk, so the gap is scope rather than method. Extending the same testing and certification to employee data, and limiting linkage for sensitive categories, would answer most of the concern without changing the deal.

Status: Open as to employees.

Aviation safety program data

Raised by Air Line Pilots Association. Dkts. 1558, 1658

Objection

Voluntary safety reports (ASAP, FOQA, LOSA) are protected from disclosure by federal law (49 U.S.C. section 40123); the FOQA agreement bars disclosure whether identified or deidentified; and a pilot can be identified from the details of a report.

On the record

WKD’s view

Where a statute or program agreement protects a category regardless of identifiability, deidentification is the wrong tool. The category should be excluded at inventory, before marketing.

Status: Unresolved on the docket.

Vendor and counterparty confidential data

Raised by Springshot; International Aero Engines; Navitaire and Amadeus. Dkts. 1508, 1693, 1538, 1602

Objection

Their proprietary information sits inside Spirit's email and files, is not estate property, is protected by contract, and cannot be removed by deidentification.

On the record

WKD’s view

Section 363 reaches only property of the estate. Data-ownership and confidentiality clauses in vendor contracts should be reviewed during inventory, with a notice-and-exclusion protocol for counterparties. This is diligence, and it can be done before an objection is filed.

Status: Unresolved on the docket.

Passenger privacy and Spirit's privacy policy

Raised by Consumer privacy ombudsman (first report). Dkt. 1581

Objection

Spirit's privacy policy says "We do not sell personal information," and the data originally reached systems holding personal data for more than 97 million passengers, including children.

On the record

Status: Largely resolved by the narrowed scope, per the ombudsman. The court has not ruled.

Is $10 million the best offer?

Raised by micro1 Inc. (competing offer, not an objection). Dkt. 1556

Objection

After the auction, micro1 offered $12,500,000, a 25% premium, with in-house deidentification and employee-data covenants.

On the record

Status: Open. The court has not addressed it.

What this means for your case

Practical lessons from the Spirit record for estates considering a data sale.

  1. Appoint the ombudsman early, and settle the scope.

    In Spirit the ombudsman was approved 21 business days before the first hearing date and reached the data room three days before the auction. Her mandate covered consumers only, so the employee and vendor questions fell outside her review. Consider asking the court at the outset who will review employee data.

    Dkts. 1380, 1446, 1684

  2. Carve out employee and protected data by content, not by system.

    Medical, accommodation, leave, testing, disciplinary, union, pay and tax records, and statutorily protected safety data, can be defined as categories and searched for across email and chat. Disclosing the search terms, a sampling plan and an error rate answers the question objectors asked in Spirit.

    Dkts. 1656, 1558

  3. Use an independent deidentification agent, chosen by the estate and paid by the buyer.

    That structure, with certification filed with the court before every transfer, is what the ombudsman relied on. At the auction the debtors preferred it to higher bids that required in-house deidentification.

    Dkts. 1470, 1594, 1684

  4. Put the protections in the sale order.

    In Spirit the privacy terms sat in the bill of sale, which gives third parties no rights, and the proposed order as filed in August contained none. Decretal provisions on reidentification, use and onward transfer give objectors something enforceable.

    Dkts. 1469, 1463

  5. Review vendor contracts and privacy policies during inventory.

    Data-ownership clauses, confidentiality agreements and the debtor's own privacy policy each produced an objection or a condition in Spirit. All of them can be found before marketing.

    Dkts. 1508, 1538, 1581

  6. Budget for adjournments.

    The Spirit hearing was first set for August 19 and is now set for November 6, after five adjournments. Plan record retention, hosting costs and the wind-down calendar around a contested timeline.

    Dkts. 1488, 1695

Stretto Intelligence, Sept. 13, 2026

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Court filings are linked on the docket references above. Secondary sources we relied on:

This page summarizes public court filings and reporting for general information. It is not legal advice, and it is not a statement of any party's position. The sale has not been approved and the record may change.

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