Davis Polk & Wardwell LLP advised Frontier Airlines Holdings, Inc. in connection with a bankruptcy court auction to purchase the stock of Frontier. Republic Airways Holdings, Inc. was announced as the winning bidder at the auction, which was conducted as part of Frontier’s Chapter 11 bankruptcy cases. Frontier Airlines Holdings would become a wholly owned subsidiary of Republic, an airline holding company that owns Chautauqua Airlines, Midwest Airlines, Mokulele Airlines, Republic Airlines and Shuttle America.

Republic had previously agreed to purchase 100% of the stock of Frontier Airlines Holdings upon its emergence from bankruptcy for $108.75 million, so long as certain conditions are met. At the auction, Republic substantially improved that agreement in a number of ways. Republic waived virtually all conditions precedent to closing and advised Frontier that it has received Hart-Scott-Rodino antitrust clearance for the transaction. Republic also agreed to waive its right to receive any distribution on account of its $150 million prepetition claim in Frontier's cases. This is expected to result in a 94% increase in the distributions to be made to Frontier’s other general unsecured creditors in its plan of reorganization. The selection of Republic’s bid was made in consultation with the statutory committee of unsecured creditors appointed in Frontier’s Chapter 11 cases.

Frontier Airlines is the second-largest jet service carrier at Denver International Airport and serves more than 50 destinations in the U.S., Mexico and Costa Rica. Frontier Airlines Holdings, Inc. and its subsidiaries (including Frontier Airlines) filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code on April 10, 2008 in the Southern District of New York.

The Davis Polk insolvency & restructuring team included partners Marshall S. Huebner and Damian S. Schaible and associates Steven C. Krause, Darren S. Klein, Adam Rachlis and Arvin I. Abraham (not yet admitted). The M&A team included partners Daniel G. Kelly Jr. and Julia K. Cowles and associates Peter M. Lamb, Jeremy Brodsky (litigation) and Carmen E. Atkins of the Menlo Park office. The credit team included partner Jason Kyrwood and associate J.W. Perry. Partner Kathleen L. Ferrell and associate Joshua Ruland provided tax advice. Except as noted above, all members of the Davis Polk team are based in the New York office.