Appeal Winds Way Through Courts As Shareholder Sentiments Shellac Stocks

JetBlue has gotten a court date for its appeal for the desired merger with Spirit Airlines, but things won’t be moving as quickly as they desire - the 1st US Circuit Court of Appeals will take the case before June of this year.

The case is actually being taken care of somewhat expeditiously, as far as legal things tend to go. JetBlue had petitioned to have their appeal considered by July 24th, a deadline their merger agreement had set to close the deal had it all gone as planned. While it would be cutting it close, getting the appeal reviewed (and hopefully approved) would allow both companies to go forward as they wanted to without having to go back and gain the authorization of shareholders de novo.

The Department of Justice blocked the merger, believing it threatened the biodiversity of the air travel economy, ridding the market of two players in the ultra low cost carrier niche. The Department moved to block the appeal, too, arguing that June arguments would do just fine. They believe the July 24th closing date was made with an eye towards antitrust arguments to begin with. The airlines fired back at the idea, saying that the merger is dependent upon $3.5 billion in financing that would expire in July without an approved extension. 

Moving on with the case, JetBlue and Spirit will supply their appeal briefs on February 26, with a DoJ response set for april. Briefs should be complete by the end of may. The 1st circuit seemed terse about getting things done for good once court begins, saying that the argument would be contemplated in June with extensions “strongly disfavored”.

FMI: www.justice.gov