Both hearings this newsletter has been pointing you toward for weeks — the data sale and the $58 million Carve-Out B fight — were supposed to happen September 30. Neither one did. Both got pushed, one of them with no new date at all. Here’s what actually happened, and why the Carve-Out B delay matters more than it might look.
Both September 30 Hearings Were Adjourned
The data sale hearing is now October 14 at 11:00 a.m., hybrid (in person and Zoom), with replies due October 9 (Docket 1663). If you read Issue 013 expecting a ruling by now, that’s the correction: it didn’t happen, and the objection deadline had already passed before the adjournment, so the lineup of objectors is locked in.
The Carve-Out B hearing was also adjourned (Docket 1662) — but unlike the data sale, no new date has been set. The September 30 agenda (Docket 1664) confirms both matters as “adjourned” without resolving either one. Judge Lane has not ruled on anything here yet.
What Carve-Out B Actually Is, and Why the Delay Matters
A big shoutout to fellow Spirit employee’s Reno Intregalia (@drimedia), who has been giving play-by-play updates and insider information to all 17,000 of the NK masses! Reno and I have been in contact and sharing information on the developments of this case to make sure everyone involved is updated on all matter concerning unpaid wages and data privacy!
Reno was able to give us three separate videos detailing the situation with the DIP / Carve-Out situation!
Here's the breakdown:
Carve-Out B is a segregated pool of money set up under Spirit’s DIP financing order specifically for certain employee-related claims — originally $80 million, with roughly $58 million reported as still sitting in it (that $80 million figure comes from drimedia’s recap; I have not independently traced it to the DIP order itself, so treat it as reported rather than court-confirmed). Spirit’s position, per its motion, is that the employee claims that actually qualify for this specific fund have already been paid out, and it wants the remaining balance released back to the DIP lenders. AFA, ALPA, IAM, TWU, and individual former employees have objected, arguing the court shouldn’t release that money while employee claims are still unresolved.
The distinction worth repeating for anyone with a pending claim: having a valid vacation, sick-bank, WARN, or grievance claim against Spirit does not automatically mean that claim qualifies for payment from this specific carve-out. The fight is over which claims legally fall inside it. Because the hearing was adjourned with no new date, that question is still completely open — the money has not moved, and it will not move until there’s a ruling.
The Data Sale Fight Picked Up Two More Objectors
The coalition objecting to Spirit’s sale of employee data to Google grew this week. The Allied Pilots Association — the union representing American Airlines pilots, which it says includes more than 700 former Spirit pilots — filed its own objection (Docket 1669), joining AFA’s and ALPA’s. Separately, the Electronic Privacy Information Center and a UC law professor asked the court for permission to file a friend-of-the-court brief (Docket 1677), arguing this may be the first case of an employer trying to sell its employees’ data as a bankruptcy asset, and warning it would encourage other companies to over-collect employee data for the same reason. ALPA also filed a supplement (Docket 1658) saying Spirit rejected a proposed adjournment of the September 30 hearing one business day before adjourning it anyway.
The Numbers, the New Counsel, and a Dispute Over Money Owed To Spirit
Spirit is bringing on a fourth outside law firm, Eversheds Sutherland, as “efficiency counsel,” at rates up to $1,650 an hour for its lead attorneys (Docket 1673). FTI Consulting billed $901,165.22 for August (Docket 1660); O’Melveny & Myers billed $9,395.20 (Docket 1676); and the quarterly report on routine professional fees shows $1,321,552 paid out this quarter alone across 28 firms (Docket 1675).
Separately, Spirit is now the one owed money: it’s asking the court to force release of escrow funds from a buyer, CSDS Asset Management, that has defaulted on payments for two aircraft it agreed to purchase, with two more aircraft at risk of the same (Docket 1659). Both of CSDS’s attorneys withdrew from the case the same week, with no reason given. It’s a smaller story than the carve-out fight, but it’s a reminder that money is contested on both sides of this estate right now, not just the side owed to former employees.
Bottom Line
Nothing got resolved September 30. The data sale now has a real date — October 14 — but the fight over the $58 million carved out for employee claims does not, which means it stays unresolved for at least another cycle. Watch October 14 for the data sale; there’s no date yet to watch for Carve-Out B, and I’ll flag one the moment it’s filed.
Upcoming Court Dates
October 7 — Objection deadline, Eversheds Sutherland retention
October 9 — Reply deadline, data sale hearing
October 14, 11:00 a.m. — Data sale hearing (hybrid)
October 14, 11:00 a.m. — Hearing on Spirit’s motion to release CSDS escrow funds
October 14 — Hearing on Eversheds Sutherland retention
Carve-Out B hearing — adjourned, no new date set
— The Unpaid Employee | spiritdidnotpayme.com