Some Spirit Lenders Balk as US Rescue Talks Hit Impasse

Talks over a potential $500 million US government rescue financing deal for Spirit Aviation Holdings Inc. have hit an impasse, with a lender group that includes Citadel, resisting terms that would likely severely impair their claims and recoveries, according to people familiar with the matter.

The group made a counterproposal in recent days that has gone unanswered, one of the people said. The people asked not to be identified discussing confidential talks.

Spirit and its affiliates filed for bankruptcy protection in August. The company said in March that it had reached a restructuring deal with creditors and filed a plan ...