FIHPNP - Chapter 11 Case Summary

Brightline's holding companies filed for Chapter 11 after ridership and revenue materially lagged the original projections the company borrowed against, interest payments and maturities went unmet at several holding company and non-debtor obligors, and equity-raise and sale processes produced no transaction. The operating company for the Miami-to-Orlando rail system, Brightline Trains Florida LLC, is not a debtor. The Debtors, which carry approximately $2.5 billion of funded debt, seek to use the cases to rebalance their holding company debt obligations and inject additional liquidity into the business. They plan to implement a restructuring support agreement with Assured Guaranty and an ad hoc group of mutual fund bondholders that contemplates approximately $490 million of new long-term exit capital, and seek approval of a $257.7 million senior secured DIP facility to be issued by the non-debtor operating company.

Business Description

Brightline Holdings LLC ("Brightline Holdings") and Brightline East LLC ("Brightline East" or the "Parent"), together with their debtor affiliates (collectively, the "Debtors"), are holding companies whose primary assets include direct and indirect ownership of non-Debtor Brightline Trains Florida LLC (the "Project Owner" or "OpCo"), the primary non-Debtor subsidiary that operates Brightline, an intercity passenger rail system in Florida (the "Rail System"). The Debtors, together with Debtor FIHPNP LLC's ("FIHPNP") wholly owned and/or controlled non-Debtor subsidiaries, constitute the "Company" or "Brightline." Entities managed by an affiliate of Fortress Investment Group LLC are indirect owners of the majority of the equity interests in the Debtors.

The Rail System runs approximately 235 miles from Miami to Orlando, serving six stations in downtown city centers and major transit hubs, including Orlando International Airport. The Company operates up to 36 one-way trains daily at speeds of up to 125 miles per hour and recorded trailing 12-month ridership of 3.6 million through July 2026.

The Chapter 11 cases address a holding company capital structure; the operating business is not itself in Chapter 11. Debtor Brightline Management employs the workforce that runs the Rail System under management agreements with non-Debtor affiliates, and Debtor DT Miami LLC operates retail and office spaces, including point-of-sale and food-preparation operations, that rely on utility services purchased from third-party utility providers.

Corporate History

The Company commenced rail operations between Fort Lauderdale and West Palm Beach in January 2018 and expanded to include Miami in May 2018, operating 110 weekly departures at the time of commencement. The Company increased the frequency of its train schedule over time, reaching 226 weekly departures in October 2019, and carried over one million passengers in its first full year of operations in 2019, in line with the 2018 Ridership and Revenue Study's first full year ridership projection, adjusted for the timing of the system reaching full operability. Service was suspended from March 2020 until November 2021, which the Declaration attributes to the impact of the COVID-19 pandemic on the general travel market and to a decision to focus efforts on the construction and development of the South Florida Commuter Rail Project. After the full South Segment service reopened for the Miami, Fort Lauderdale, and West Palm Beach stations in November 2021, ridership returned rapidly. On September 22, 2023, the Company completed construction of and opened its Orlando station.

Corporate and Ownership Structure

Debtor Brightline East owns 100% of the equity interests in Debtor BLTF Holdings LLC ("BLTF" or the "Pledgor"), which in turn owns 100% of the equity interests in the Project Owner. Debtor Brightline Management LLC ("Brightline Management"), a wholly owned subsidiary of Debtor Brightline Holdings, is the only Debtor entity with employees. Non-Debtor AAF Operations Holdings LLC ("AAFOH") owns equity interests in its subsidiaries, including non-Debtor Brightline Tampa LLC ("Brightline Tampa") and Debtor Brightline East. Non-Debtor Brightline Florida Holdings LLC ("Brightline Florida") holds common equity interests of AAFOH, and Debtor BLH Investment LLC holds preferred equity interests of AAFOH.

Brightline West and the Las Vegas Land

Debtor Brightline Holdings owns a non-controlling, approximately 40% equity interest in non-Debtor BL West Holdings LLC ("BL West Holdings"), with the remaining interests owned by certain non-Brightline investment vehicles. The Brightline West project contemplates the construction of a 218-mile high-speed passenger rail system connecting southern California and Las Vegas, Nevada, and the rail line remains in the early phases of development. Neither BL West Holdings nor its direct or indirect subsidiaries are filing for bankruptcy in connection with these Chapter 11 Cases. In August 2024, each preferred unit of BL West Holdings converted into common units ("BLWH Common Units") at the conversion ratio then in effect, and a corresponding number of preferred units of non-Debtor BL West Intermediate Holdings LLC ("BL West Intermediate Holdings") automatically converted into special units such that the number of issued and outstanding special units equaled the number of BLWH Common Units issued in the conversion.

Separately, Debtor BL Florida LLC ("BL Florida") owns approximately 40% of non-Debtor LV TOD Property Holdings LLC ("LV TOD JV"), which owns an approximately 90-acre property along the west side of Las Vegas Boulevard in Las Vegas, Nevada.

Operations Overview

The Project Owner owns and operates the Rail System, connecting major population centers along the 235-mile Miami-to-Orlando corridor. It built and owns or controls the entire Rail System for passenger rail service (other than the South Florida Regional Transportation Authority), including the corridor, track and signal systems, rolling stock, six passenger stations, and two maintenance facilities, and operates up to 36 one-way trains daily, seven days per week, serving stations in downtown Miami, Aventura, Fort Lauderdale, Boca Raton, West Palm Beach, and at the Orlando International Airport. The fleet consists of ten trainsets, each with two diesel-electric locomotives and multiple passenger cars. On-time performance runs in the low-90% range, with a Net Promoter Score in the 70s.

The Corridor and Its Counterparties

The infrastructure comprises approximately 235 miles of double track, of which 195 miles between Miami and Cocoa is shared corridor and approximately 40 miles between Cocoa and Orlando is dedicated passenger-only track. On the shared segment, the Project Owner holds an exclusive and perpetual passenger rail easement from Florida East Coast Railway, LLC ("FECR"), which retains the exclusive right to operate freight trains. The rail corridor agreements with FECR also govern shared use of the Miami-to-Cocoa corridor, including permitted train volumes, operations and maintenance, dispatching, capital improvements, cost allocations, management fees, and liability and insurance arrangements. The Cocoa-to-Orlando corridor is governed by lease and easement agreements with three public counterparties; the terms below reflect the original contractual term, not the remaining term:

Federal Grant Awards and Infrastructure Projects

On August 11, 2026, the Federal Railroad Administration (the "FRA") selected the Cocoa Multimodal Station and Rail Project for the National Railroad Partnership for Intercity Passenger Rail Program, awarding approximately $57.5 million to the City of Cocoa for the final design and construction of a new multimodal passenger station in Cocoa, Florida (the "Cocoa Station"). Under the federal award, non-Debtor OpCo will collaborate with the City of Cocoa to construct the Cocoa Station and has agreed to maintain and operate it upon completion. The Cocoa Station is expected to provide a new stop along the existing Miami-to-Orlando corridor, connecting Brevard County directly to the Rail System.

On August 18, 2026, the U.S. Department of Transportation ("USDOT") announced a $78.9 million grant to the City of Stuart, which, combined with an already committed $130 million USDOT grant from 2023 and $26.2 million of matching fund requirements from the Company, will provide for the replacement of the existing 100-year-old St. Lucie River Railroad Bridge with a new double-track structure offering significantly improved vertical and horizontal navigational clearances. The bridge serves both the Rail System and FECR's freight operations along the shared corridor.

Non-Debtor OpCo is also advancing the "Intrusion Mitigation Project," funded through the federal Rebuilding American Infrastructure with Sustainability and Equity grant program, which provides for the enhancement of 327 grade crossings between Miami and Cocoa and the installation of approximately 33 miles of fencing along the corridor. The FRA and FDOT have contributed approximately $2.6 million to the project to date ($1.5 million and $1.1 million, respectively, as of June 2026), and as of August 31, 2026, 299 of the 327 grade crossing improvements were complete, with corridor fencing in preliminary design pending final approvals from FECR on a county-by-county basis.

Commuter Rail and the Tampa Extension

The Debtors hold indirect interests in non-Debtor special purpose vehicles that own long-term rights relating to commuter rail access and the development of commuter rail infrastructure along certain South Florida segments of the Rail System in Miami-Dade, Broward and Palm Beach Counties (the "Commuter Access Rights"); the rights were originally held by non-Debtor OpCo and subsequently sold to those vehicles. Through non-Debtor subsidiaries of Brightline Florida, the Company is planning to develop the South Florida commuter rail project in those three counties, with negotiations with Miami-Dade County the most advanced. If fully developed as planned, the project is contemplated to span up to 85 miles and include at least 17 new stations, and is intended to increase access to the intercity Rail System, drive increased long-distance ridership, and generate cash flow for the relevant non-Debtor entities through negotiated payments from the three counties.

Non-Debtor OpCo, as access provider, supports non-Debtors MDC Commuter LLC, BRWD Commuter LLC, and PBC Commuter LLC (collectively, the "Commuter Designees") under intercompany access agreements and intercompany development agreements (collectively, the "Commuter Agreements"). Under the access agreements, OpCo is to grant each Commuter Designee the right to access and operate commuter rail service on the applicable segment of the Rail System and to assist in negotiating third-party access agreements and satisfying availability conditions, including completion of required infrastructure and station construction, payment of all infrastructure development invoices, regulatory confirmation that infrastructure and rolling stock are ready for service, procurement of required insurance, and qualification of necessary operating employees. Under the development agreements, OpCo serves as developer of the project and provides construction management services for the stations and rail infrastructure. Each Commuter Designee is obligated to pay OpCo an annual fee of $250,000.

The Debtors also hold indirect interests in a non-Debtor subsidiary advancing an extension of the Rail System to create a Miami-to-Tampa corridor, with a new 84-mile segment between Orlando International Airport and Tampa expected to include stops at the Orange County Convention Center, South International Drive, and in the Tampa area. The Project Owner was awarded exclusive rights to develop the expansion via an awarded request for proposals on November 28, 2018, and on January 2, 2024 sold the related assets to non-Debtor Brightline Tampa, a subsidiary of AAFOH. The transferred assets included design and development contracts and certain related rights that were assigned, or agreed to be assigned: the award under the request for proposals to lease rights-of-way from FDOT and CFX for an intercity passenger rail system between Orlando and Tampa; a $15.875 million FRA grant; and access rights at Orlando International Airport granted by GOAA (collectively, the "Tampa Assets"). On April 1, 2024, the Project Owner reacquired certain rights from Brightline Tampa, which otherwise retained its rights relating to the Orlando-to-Tampa project and continues to pursue its development. Certain of the Debtors also hold rights relating to an easement for passenger rail services from Cocoa to Jacksonville.

Workforce

Debtor Brightline Management employs approximately 520 employees (the "Employees"), substantially all of whom are engaged in operating the Rail System, including train operations, stations and hospitality services, and corporate functions. They comprise approximately 90 in corporate functions, approximately 340 engaged in stations, maintenance, engineering, safety and security, ticket counter and guest services, baggage handling, café and commissary services, and other operational support roles, and approximately 90 engaged in train operations as train engineers, conductors, and related crew. The Project Owner has no employees of its own. None of the employees supporting Rail System operations are currently covered by a collective bargaining agreement, though approximately 100 of the Debtors' employees are members of the Transport Workers Union and will potentially be subject to a collective bargaining agreement currently under negotiation. As of August 2026, monthly payroll was approximately $4.2 million, consisting primarily of bi-weekly payments, and the Debtors estimate approximately $1.1 million in unpaid wages and salaries owed to Employees as of the Petition Date. The Debtors also offer certain eligible employees the use of a Company vehicle for business purposes, with a current fleet of 31 vehicles.

Certain non-Debtor affiliates provide shared services to the Debtors. Under an Employee Sharing Agreement dated November 1, 2022 among Debtor Brightline Management, Debtor Brightline Holdings, non-Debtor BLH Capital & Management Services LLC, non-Debtor FECI Holding Corp. (whose interest in the agreement was assigned to non-Debtor Brightline Train Development LLC on July 27, 2026), and non-Debtor DXE Management LLC ("DXE"), the non-Debtor employers make their employees available to Brightline Management, Brightline Holdings, DXE and the other non-Debtor employers to perform services as requested. Cash funding employment costs for shared employees relating to the Brightline Florida project is transferred from non-Debtor OpCo to Brightline Management, Brightline Holdings, or the non-Debtor employers, as appropriate. Some Employees also perform services for non-Debtor entities involved in the Brightline West project, and the applicable Brightline West entity reimburses Brightline Management for its allocable share of employment costs based on the proportion of time spent.

Management Agreements and Cash Flow Mechanics

Under the General Operations, Management and Administrative Services Agreement dated December 19, 2017 between non-Debtor OpCo and Debtor Brightline Management, as amended (the "Florida Management Agreement"), and the General Operations, Management and Administrative Services Agreement dated September 1, 2024 between non-Debtor Brightline Tampa and Brightline Management (the "Tampa Management Agreement"), Brightline Management serves as the dedicated day-to-day operations manager for non-Debtors OpCo, Brightline Tampa, and the Commuter Designees.

The Company generates materially all of its cash through ticket receipts from non-Debtor OpCo's operations and merchandise, concessions, and sponsorships. A substantial portion of those funds are used by OpCo to pay its direct expenses and do not flow through any Debtor entity. Certain funds are sent to specific Debtor entities, the majority of which are used to make disbursements on behalf of and for the benefit of OpCo — for example, to pay the Debtors' employees who provide services to OpCo or to cover insurance obligations allocated to OpCo. The Debtors maintain 25 bank accounts across multiple banks in connection with the centralized cash management system. OpCo relies on the Debtors to fulfill many of the day-to-day operations of the projects, pay insurance, taxes, and professional fees, and fulfill its payroll obligations.

The Company maintains insurance policies covering both the Debtors and certain non-Debtor affiliates, including OpCo, for general liability, excess rail liability, railroad property, auto liability, environmental liability, workers' compensation, crime, cyber liability, and directors' and officers' liability. Debtor Brightline Holdings has historically paid substantially all Insurance Obligations on behalf of itself and other entities for administrative convenience; substantially all such amounts are allocated to OpCo as primary beneficiary under many of the policies, and OpCo transfers funds to Brightline Holdings for coverage costs.

Prepetition Obligations

As of the Petition Date, the Debtors' consolidated long-term debt obligations totaled approximately $2.5 billion across four facilities. Non-Debtor OpCo carried approximately $2.4 billion, and other non-Debtor obligors (AAFOH and Brightline Florida) carried approximately $2.2 billion, for a total of approximately $7.1 billion across the structure.

Obligor / InstrumentTypeMaturity / Scheduled Mandatory TenderApproximate Principal Outstanding
Brightline East LLC — 11.00% Senior Secured Notes due 2030 (Parent Notes)144A/Reg S NotesJanuary 31, 2030$1.12 billion
BLH Investment LLC Credit Facility (BLHI Credit Facility)Term LoanNovember 8, 2025$775 million
Brightline Holdings LLC Credit FacilityTerm LoanSeptember 30, 2027$484 million
BL Florida LLC Credit FacilityTerm LoanSeptember 24, 2026$112.6 million
Total (Debtors)$2.492 billion
Brightline Trains Florida Series 2024 PABs (OpCo Bonds)Private Activity Municipal BondsVarious, July 1, 2034 – July 1, 2053$2.219 billion
Brightline Trains Florida Note Purchase Agreement (OpCo NPA Notes)Note Purchase FacilitySeptember 29, 2026$148.9 million
Brightline Trains Florida Credit Facility (Citizens Credit Facility)Revolving Loan FacilityMay 9, 2027$45 million
Total (non-Debtor OpCo)$2.413 billion
AAFOH Series 2024 PABs and Series 2024A PABs (HoldCo Bonds)Private Activity BondsJuly 15, 2028$925 million / $286 million
Brightline Florida Holdings LLC Series 2025B Bonds (Commuter Bonds)Private Activity BondsSeptember 28, 2026$985 million
Total (other non-Debtors)$2.196 billion
Total$7.101 billion

Parent Notes — Brightline East

On May 9, 2024, BLH Escrow 1 LLC (the "Escrow Issuer"), a subsidiary of Debtor Florida Investment Holdings LLC ("FIH"), issued $1,325.0 million principal amount of 11.00% Senior Secured Notes due 2030 (the "Parent Notes") under an Indenture of Trust with Deutsche Bank National Trust Company as trustee. Immediately following issuance, the Escrow Issuer merged into the Parent, which assumed the obligations under a first supplemental indenture dated the same day. Interest is payable on each January 1 and July 1, and the notes mature on January 31, 2030 unless earlier redeemed or repurchased. On December 23, 2024, the Parent repurchased and canceled $206.2 million aggregate principal amount pursuant to privately negotiated note purchase agreements with certain holders. Approximately $1,118.8 million in principal amount was outstanding as of the Petition Date.

The Parent Notes are secured on a senior lien basis by substantially all personal property of the Parent, whether now or hereafter acquired, including certain accounts held by the collateral agent under a collateral agency, intercreditor and accounts agreement dated as of May 9, 2024, and the equity interests owned by the Parent in the Pledgor, excluding customary excluded assets. Debtor Brightline East owns four debt service accounts with active balances totaling approximately $48 million of interest reserves associated with the Parent Notes.

BLHI Credit Facility

Debtor BLH Investment LLC ("BLHI") entered into a Credit Agreement on May 9, 2024, amended three times through October 29, 2025, with Debtor FIH as guarantor, Morgan Stanley Senior Funding, Inc. as administrative agent, and the lenders party thereto. Term loans of $775 million in principal amount were outstanding as of the Petition Date. Rate: prime plus 4.25% for base rate loans and SOFR (with a 0.1% adjustment) plus 5.25% for SOFR loans, with a default rate of an additional 2% per annum on overdue amounts. The facility is secured by a first-priority security interest in substantially all personal property of BLHI, including the preferred equity interests of non-Debtor AAFOH owned by BLHI, a first-priority lien on the equity interests of BLHI owned by FIH, and a first-priority lien granted by non-Debtor BL West Holdings on the common equity of BL West Intermediate Holdings (the "BL West Intermediate Holdings Common Equity"), excluding customary excluded assets.

An interest payment was due July 15, 2025, a 10% mandatory prepayment was due August 8, 2025, and the remaining principal was required to be repaid at the November 8, 2025 maturity. No such payments have been made as of the Petition Date.

Brightline Holdings Credit Facility

Debtor Brightline Holdings entered into a Credit Agreement on June 30, 2022, amended five times through December 15, 2022, with certain subsidiaries as guarantors, Morgan Stanley Senior Funding, Inc. as administrative agent, and the lenders party thereto. Term loans of $484 million in principal amount, including capitalized interest, were outstanding as of the Petition Date. Rate: 20% per annum, payable in kind. Maturity: September 30, 2027. Collateral consists of a first-priority security interest in the equity interests owned by the loan parties in certain of their direct subsidiaries and entities that were direct subsidiaries when the agreement was entered into, including the equity interests of BL West Holdings owned by Brightline Holdings as of the Petition Date, subject to customary excluded assets. The scope of that pledge, and whether BL West Holdings or any of its subsidiaries remains a guarantor, is the subject of the litigation described below.

BL Florida Credit Facility

Debtor BL Florida entered into a Credit Agreement on February 14, 2025 with Morgan Stanley Senior Funding, Inc. as administrative agent and the lenders party thereto. Term loans of $112.6 million in principal amount, inclusive of payment-in-kind interest, were outstanding as of the Petition Date. Loans bear interest at prime plus 2.5% for base rate loans and SOFR plus 3.5% for SOFR loans. The facility is secured by a first-priority security interest in substantially all personal property of BL Florida, including the equity interests of LV TOD JV, subject to customary excluded assets. Initially scheduled to mature April 15, 2026, the maturity has been extended multiple times through September 24, 2026.

OpCo Bonds, OpCo NPA and the Citizens Revolver — Pari Passu at the Operating Company

On May 9, 2024, the Florida Development Finance Corporation (the "FDFC") issued $2.2 billion aggregate principal amount of Revenue Bonds (Brightline Florida Passenger Rail Project) Brightline Trains Florida LLC Issue, Series 2024 (Tax-Exempt) (the "OpCo Bonds") under an indenture of trust with Deutsche Bank National Trust Company as trustee, and loaned the proceeds to non-Debtor OpCo under a senior loan agreement of the same date. The bonds have varying maturities from July 1, 2034 through July 1, 2053 and are subject to optional and mandatory sinking fund redemption prior to maturity. Approximately $2.2 billion in principal amount was outstanding as of the Petition Date. Greater than $1 billion of the OpCo Bonds, representing 50.1% of the principal amount outstanding, are insured by a financial guaranty insurance policy issued by Assured Guaranty Inc. ("Assured"), which has the right to vote on behalf of those insured bonds.

The OpCo Bonds are secured on a pari passu basis with the OpCo NPA and the Citizens Credit Facility by (i) a first-priority security interest in substantially all personal property of OpCo, whether now owned or hereafter acquired, excluding customary excluded assets, (ii) a first-priority security interest in substantially all real property of OpCo pursuant to certain mortgages, and (iii) a pledge by Debtor BLTF of 100% of the equity interests in OpCo (collectively, the "OpCo Bond Collateral").

On May 21, 2026, OpCo entered into a Note Purchase Agreement, amended three times through August 19, 2026 (the "OpCo NPA"), with Assured and certain of its affiliates as purchasers as of the Petition Date and Deutsche Bank National Trust Company as administrative and paying agent. The notes were issued at an original issue discount of 30% and mature on September 29, 2026; proceeds funded critical vendor payments, employee obligations, professional fees, and working capital needs in advance of the Petition Date. Approximately $148.9 million in aggregate principal amount was outstanding as of the Petition Date, secured by the OpCo Bond Collateral on a pari passu basis.

OpCo's revolving credit facility under a Credit Agreement dated May 9, 2024, with Citizens Bank, N.A. as administrative agent, provides for revolving loans in an aggregate principal amount of up to $45 million. The facility was scheduled to mature May 8, 2026 following OpCo's exercise of its first one-year extension option; an amendment negotiated in May 2026 extended maturity to May 9, 2027. The full $45 million in principal amount was outstanding as of the Petition Date, secured by the OpCo Bond Collateral on a pari passu basis.

HoldCo Bonds — AAFOH

On May 9, 2024, the FDFC issued $925 million aggregate principal amount of Revenue Bonds (Brightline Florida Passenger Rail Project) AAFOH Issue, Series 2024 (Tax-Exempt), and on December 23, 2024 issued a further $285.7 million aggregate principal amount of Series 2024A Bonds (together, the "HoldCo Bonds"), in each case loaning the proceeds to non-Debtor AAFOH. Approximately $1.2 billion in principal amount was outstanding as of the Petition Date.

Interest is payable on each January 15 and July 15. AAFOH exercised its option to defer the interest payments otherwise due July 15, 2025 and January 15, 2026; upon deferral, interest accrues at a step-up rate of an additional 2% per annum until all interest due and unpaid is paid in full. An interest payment deferral is not an event of default under the indenture unless and until no interest payment is made on three consecutive interest payment dates. AAFOH did not make the cash interest payment due July 15, 2026; the grace period for that payment has been extended multiple times through the earlier of (i) September 24, 2027 and (ii) five business days after termination of the Consensual RSA described below, or such other date specified by or on behalf of holders of a majority of the aggregate outstanding principal amount. The scheduled mandatory tender date is July 15, 2028.

The HoldCo Bonds are guaranteed by non-Debtor Brightline Tampa and secured by a first-priority security interest in the equity interests owned by AAFOH in its subsidiaries, including a pledge of 100% of the equity interests owned by AAFOH in Brightline Tampa and Debtor Brightline East, and in substantially all other personal property of AAFOH and Brightline Tampa, including the Tampa Assets, excluding customary excluded assets. The trustee was replaced twice during 2026: with Wilmington Savings Fund Society, FSB on January 15, 2026 at the request of majority holders, and with UMB Bank, N.A. on April 9, 2026.

Commuter Bonds — Brightline Florida

On August 13, 2025, the FDFC remarketed $985 million aggregate principal amount of Revenue Bonds (Brightline Florida Passenger Rail Expansion Project), Series 2025B (the "Commuter Bonds") under a fifth supplemental indenture of trust supplementing the original indenture of trust dated August 25, 2022, with proceeds loaned to non-Debtor Brightline Florida. The full $985 million was outstanding as of the Petition Date. Interest was payable February 15, 2026 and is payable on the mandatory tender date following the end of the Current Term Rate Period; no interest due and payable on the Commuter Bonds has yet been paid.

The Commuter Bonds are guaranteed by the non-Debtor subsidiaries of Brightline Florida that directly or indirectly hold the Commuter Access Rights (the "Commuter Guarantors") and secured by a first-priority security interest in substantially all personal property of Brightline Florida and the Commuter Guarantors, including the equity interests they own in their respective subsidiaries — among them a pledge of 100% of the common equity interests of AAFOH owned by Brightline Florida — and the Commuter Access Rights, together with a second-priority security interest in the BL West Intermediate Holdings Common Equity, excluding customary excluded assets.

On October 24, 2025, majority holders replaced the trustee with UMB Bank, N.A. On October 29, 2025, the second-priority lien on the BL West Intermediate Holdings Common Equity securing the Commuter Bonds was granted; the Declaration identifies the grantor as BL West Holdings in its description of the Commuter Bonds and as Brightline Florida in its account of the 2025 remarketing. On February 17, 2026, a supplemental indenture extended the end of the grace period for the February 15, 2026 interest payment (the "Grace Period Termination Date") from February 27, 2026 to April 15, 2026 and provided for a 2.00% step-up in the interest rate during the grace period; the Grace Period Termination Date has since been extended to September 28, 2026. A June 15, 2026 supplemental indenture extended the Current Term Rate Period from June 14, 2026 to June 30, 2026, and it has since been extended to the day immediately preceding the Grace Period Termination Date.

Virgin Trademark Judgment and Guaranty Enforcement

On February 10, 2021, Virgin Enterprises Limited ("VEL") commenced proceedings against Debtor Brightline Holdings in the High Court of Justice, Business and Property Courts of England and Wales, Commercial Court, in relation to a Trademark License Agreement dated November 15, 2018. Following a July 2023 trial, the court entered an order on October 12, 2023 finding in favor of VEL and ordering Brightline Holdings to pay $115,730,901.61 in damages, which Brightline Holdings paid. VEL subsequently claimed damages should be increased by approximately $94 million. On December 21, 2025, the parties entered into a settlement agreement under which Brightline Holdings agreed to pay VEL $8,500,000 by April 30, 2026, with Debtor FIHPNP, as indirect parent of Brightline Holdings, guaranteeing payment under a guaranty of the same date.

VEL issued a demand letter to FIHPNP under the guaranty on May 18, 2026 demanding payment within seven days and, on June 9, 2026, commenced an action against FIHPNP in the Supreme Court of the State of New York, County of New York, filing a motion for summary judgment in lieu of complaint for the settlement amount together with pre- and post-judgment interest, costs, and attorneys' fees. On June 10, 2026, VEL also filed an application for enforcement against Brightline Holdings in the High Court of Justice, King's Bench Division, Commercial Court. The New York motion was granted July 28, 2026, and on August 5, 2026 the court entered judgment against FIHPNP in the amount of $8,619,752.59. On September 11, 2026, VEL moved in the New York action for turnover of FIHPNP's membership interests in Debtor FIHP and non-Debtor FTL Garage LLC to satisfy the judgment; FIHPNP responded September 21, VEL replied September 24, and the return date is September 28, 2026. No ruling has been issued on the enforcement application or turnover motion.

Make-Whole Litigation — Brightline Holdings Credit Facility

In September 2023, funds affiliated with Knighthead Capital Management and Certares Management sued Morgan Stanley Senior Funding and certain Debtors, as well as certain non-Debtors associated with the Brightline West project, in the Supreme Court of the State of New York, County of New York, seeking at least $750 million in damages and other declaratory and injunctive relief in connection with a make-whole provision the plaintiffs allege was triggered under the Brightline Holdings Credit Facility. An amended complaint filed August 30, 2024 added a cause of action against Morgan Stanley Senior Funding, Inc. as administrative agent and lender. The operative complaint asserts that BL West Holdings consummated a December 2022 preferred-equity issuance transaction that, in the plaintiffs' view, was not permitted under the facility and should have triggered a make-whole prepayment. Brightline Holdings and Morgan Stanley each moved to dismiss on September 30, 2024; Brightline Holdings moved for summary judgment on October 15, 2025, as did Morgan Stanley and the plaintiffs on October 17, 2025. The court heard oral argument on all summary judgment motions on September 3, 2026 and reserved judgment, and has not ruled on those motions or on the earlier motions to dismiss.

Railroad Retirement Board Determination

On May 15, 2026, the Railroad Retirement Board (the "RRB") issued a determination (BCD 2026-28) finding that non-Debtor OpCo is a covered employer under the Railroad Retirement Act and the Railroad Unemployment Insurance Act, effective as of February 8, 2019. If upheld, the determination could require OpCo to participate in the railroad retirement system, a tax system that replaces Social Security and imposes additional employer contributions, and could subject OpCo to liability for unpaid employer and employee contributions going back as far as 2019. Tier I tax rates match Social Security (currently 7.65% for both employers and employees on a maximum of $184,500 in earnings per employee), and Tier II is funded by an additional tax currently imposed at 13.1% on employers and 4.9% on employees on the first $137,100 of wages per employee. OpCo disputes both the finding of coverage and the effective date, and filed a request for reconsideration on August 6, 2026 seeking either reversal or revision of the coverage date to December 21, 2022 with prospective-only effect from May 15, 2026. Out of an abundance of caution, the Debtors have established a reserve for estimated RRB obligations that would have accrued had the system been operationalized as of the date of the determination, and intend to withhold and remit RRB taxes in lieu of Social Security taxes for covered Employees.

MiamiCentral Retail Foreclosure

On September 1, 2022, non-Debtor Brightline Investment Holdings LLC ("BIH") entered into a Loan Agreement with Debtor FIH as parent guarantor, non-Debtor DTS DT Retail LLC ("DTS") as subsidiary guarantor, U.S. Bank Trust Company, National Association as administrative agent, and the lenders party thereto, providing a $128.5 million loan facility consisting of a $65 million tranche A loan and a $63.5 million tranche B loan. The facility is secured by a first-priority security interest in the equity interests of DTS owned by BIH, a guaranty by DTS, and a mortgage on retail property at Brightline MiamiCentral Station owned in fee simple by DTS (the "Retail Property").

On July 30, 2026, U.S. Bank Trust Company, solely as administrative agent and on behalf of XYQ Cayman Ltd. as lender, filed a verified complaint in the Circuit Court of the Eleventh Judicial Circuit in Miami-Dade County, Florida against BIH, DTS, non-Debtor FECI Realty LLC as property management agent, Debtor FIH, and certain other defendants, alleging various payment defaults and seeking foreclosure of the mortgage over the Retail Property and enforcement of the loan agreement with respect to the $65 million in tranche A loans outstanding. On September 18, 2026, the court entered an order approving the appointment of a receiver over the Retail Property. The Debtors do not anticipate that resolution of the proceeding will directly impact the Chapter 11 cases.

Personal Injury Litigation

Certain of the Debtors, alongside non-Debtor OpCo, are parties to pending personal injury litigation arising in the ordinary course from alleged incidents involving Rail System operations. The Debtors named in such litigation are holding companies that do not conduct Rail System operations, and the Debtors do not believe those entities have any direct liability in connection with such claims. The Company maintains an insurance program covering casualty and rail liability for bodily injury, personal injury, and property damage arising from such operations, and has not faced any material judgments relating to such lawsuits to date.

Insurance Obligations

Total Insurance Obligations are approximately $18.36 million, of which $10 million was outstanding as of the Petition Date. The Debtors pay approximately $5.6 million in premiums per policy period under policies financed through a commercial premium financing agreement with AFCO Credit Corporation, with $980,000 in remaining payments as of the Petition Date, $490,000 of which falls due in the interim period, with the next payment due October 15, 2026. Premiums on the workers' compensation policy with Continental Casualty Company run approximately $1.92 million per policy period, paid in installments, and approximately $1.92 million was due and owing as of the Petition Date, all of which will come due during the interim period.

Events Leading to Bankruptcy

Ridership and Revenue Behind Plan

Brightline's revenue and ridership have continued to grow (the Company achieved record monthly ridership in March 2026, and monthly ridership exceeded prior-year levels in each month through July 2026), but results have materially lagged the Company's original projections, and the reserves set aside to cover debt service through ramp-up were not enough for the slower ramp-up experienced. The Company borrowed based on those original projections. Both total ridership and average fare levels have underperformed expectations, causing revenue to fall short of forecasted levels. As a result, the Project Owner, the only revenue-generating entity within the Brightline corporate structure, has not generated sufficient cash flow to both pay its vendors and make the distributions necessary to support its own and its direct and indirect parent entities' substantial debt service obligations.

The Declaration attributes the gap to several factors: the COVID-19 service suspension; slower-than-expected development of distribution relationships with third-party travel platforms, which limited visibility to business and visitor travelers; delays from lawsuits brought by Indian River and Martin counties seeking to block construction of the railroad through the Treasure Coast; and liquidity constraints that forced the Company to scale back marketing and sales spending during parts of 2025, further slowing customer acquisition. The Declaration states that the Company has since completed fleet capacity additions and implemented distribution integrations with global travel platforms, and projects that it will capture a greater share of the visiting friends and relatives, leisure, business, and visitor segments over the next several years, with load factor rising to approximately 70%. The Company reports penetration of approximately 19% of its addressable long-distance market; it believes it requires additional time to realize the full benefit of that growth and that the growth trajectory alone will not be sufficient to address its near-term financial challenges.

Against that operating performance, the Company faced near-term maturities, interest payment deadlines, and mandatory tender obligations across the structure. It pursued a series of one-off transactions to address those obligations as they arose, an approach the operating entity's slower-than-anticipated growth made unsustainable.

Advisors

Skadden, Arps, Slate, Meagher & Flom LLP has advised the Company since September 1, 2025 in connection with its funded debt obligations and, more recently, in evaluating potential strategic alternatives to address upcoming debt maturities, managing certain litigation liabilities, and negotiating with counterparties. Perella Weinberg Partners LP ("PWP") and Houlihan Lokey Capital, Inc. have served as co-financial advisors since January 23, 2026 and June 9, 2026, respectively, and Alvarez & Marsal North America, LLC has served as restructuring advisor since April 2, 2026.

The Failed Equity Raise and Sale Process

Beginning in 2025 and continuing into early 2026, the Company, with support from several global investment banks, solicited third-party interest in a potential equity investment. Two separate waves of outreach to a total of 32 global infrastructure investors, transportation operators, and financial sponsors generated limited interest: four investors advanced to the diligence stage and the Company received only one formal preliminary non-binding offer. Negotiations with that party continued for several months before it elected not to pursue a transaction in advance of, or in connection with, a Chapter 11 filing.

In the fourth quarter of 2025, the Company sought approximately $100 million of incremental capital to support operations at the Project Owner, exchanging term sheets with a group of Parent Notes holders represented by Davis Polk & Wardwell LLP (the "Ad Hoc Group of East Noteholders"), but was unable to obtain the requisite consents.

On May 4, 2026, PWP and one of the banks involved in the earlier effort launched a new marketing process seeking proposals to sell all or a portion of the equity in non-Debtor OpCo or Debtor BLTF, the assets of OpCo, the assets or equity of non-Debtor Brightline Tampa, the equity of the entities that directly or indirectly hold the Commuter Access Rights (which the Declaration describes here as Debtor entities and elsewhere as non-Debtor special purpose vehicles), or some combination. They contacted 64 global infrastructure investors, transportation operators, and institutions, 22 of which were granted access to the virtual data room. One submitted a formal non-binding indication of interest and shortly thereafter informed the Company it had determined not to proceed.

The 2025 Commuter Bonds Remarketing and Second Lien Pledge

In August 2025, non-Debtor Brightline Florida faced an August 13, 2025 mandatory tender deadline on its approximately $985 million of Series 2025A Commuter Bonds. It negotiated with certain holders of the Commuter Bonds (who also own a material portion of the HoldCo Bonds and OpCo Bonds) represented by Herbert Smith Freehills Kramer LLP (the "Ad Hoc Mutual Fund Group") to remarket the bonds through a new issuance of approximately $985 million of Series 2025B Commuter Bonds, the proceeds of which funded the tender price and effectively rolled over the existing Series 2025A bonds. The remarketed bonds carried a 10% coupon and a scheduled mandatory tender date of June 15, 2026, and required Brightline Florida to cause AAFOH to make the January 15, 2026 cash interest payment on the HoldCo Bonds when due rather than defer it as otherwise permitted. As additional downside protection, the Ad Hoc Mutual Fund Group required Brightline within 60 days either to grant a second lien security interest on the BL West Intermediate Holdings Common Equity or to prefund certain interest and premium amounts; failing that, the mandatory tender date would have been automatically pulled forward to October 28, 2025, subsequently extended to October 30, 2025. The required second lien security interest was granted on October 29, 2025.

Deferral of the HoldCo and Commuter Interest Payments

As the January 15, 2026 HoldCo Bonds interest payment date approached, the Company engaged the Ad Hoc Mutual Fund Group to negotiate a deferral of the cash payment that the August 2025 Commuter Bonds remarketing documents required. The group agreed to amend the Commuter Bonds indenture to eliminate the requirement that the payment be made in cash on January 15, 2026; in exchange, Brightline Florida agreed, among other things, to cause Debtor Brightline Holdings to guarantee the Series 2025B Commuter Bonds.

Brightline Florida then faced a February 15, 2026 interest payment on the Commuter Bonds. It did not make that payment, and the Ad Hoc Mutual Fund Group agreed to extend the 10-business-day grace period to April 15, 2026, with further extensions negotiated from time to time ultimately reaching the current Grace Period Termination Date. Debtor BL Florida separately negotiated several extensions of the maturity of the BL Florida Credit Facility with its lenders, ultimately to September 24, 2026.

The OpCo Bridge Financings and the Parent Notes Default

Beginning in February 2026, the Company began discussions to raise $21.9 million in new non-Debtor OpCo financing as a short-term measure to fund critical payments to certain vendors, employees, and taxing authorities and to bridge to a larger financing or other transaction; that amount was the maximum the Company could incur under certain of its existing debt baskets, subject to certain consents. After negotiations with the Ad Hoc Mutual Fund Group, the Ad Hoc Group of East Noteholders, and Assured, on May 21, 2026 Assured funded $22.2 million to OpCo under the OpCo NPA. The Company did not obtain the consent of the majority bondholders under the HoldCo Bonds and the Commuter Bonds before incurring the debt, but obtained a waiver of the resulting potential event of default from the Ad Hoc Mutual Fund Group before the applicable grace period expired.

On June 17, 2026, the Company received an additional $8 million from Assured under the OpCo NPA. The additional funds were provided at a 30% original issue discount, which Assured will waive upon certain conditions set forth in the Consensual RSA, and the original $22.2 million was redeemed, repaid, and reissued at 30% OID, for an aggregate total principal amount of notes issued at that time of $43,142,857 (the "Initial Bridge Financing"). The parties agreed to the OID structure as a condition of the additional financing in light of the risk associated with the funding and the Company's near-term liquidity needs. Again the Company did not obtain majority bondholder consent under the Parent Notes, the HoldCo Bonds and the Commuter Bonds, and again obtained a waiver from the Ad Hoc Mutual Fund Group with respect to the HoldCo Bonds and Commuter Bonds before the applicable grace period expired.

The $8 million upsizing resulted in a default under the indenture governing the Parent Notes, which the Ad Hoc Group of East Noteholders contended would ripen into an event of default after September 7, 2026. On September 4, 2026, the Company entered into standstill agreements with that group extending the deadline through September 14, 2026; on September 11, 2026 the group agreed to extend through September 22, 2026, subsequently extended to September 29, 2026.

Chapter 11 Filing

The Debtors filed Chapter 11 on September 24, 2026 in the District of New Jersey. The Debtors seek to use the cases to rebalance holding company funded debt obligations and inject additional material liquidity into the Company, positioning the operating business to continue serving riders and other stakeholders.

From the Assured RSA to the Consensual RSA

In June 2026, the Company received from Assured a proposed restructuring support agreement together with a restructuring term sheet and a proposed debtor-in-possession financing term sheet. Months of arm's-length negotiations, including the exchange of multiple iterations of the transaction documents, culminated in a Restructuring Support Agreement dated as of August 19, 2026 between the Company and Assured (the "Assured RSA"), which contemplated certain restructuring transactions involving the Company and Assured while providing flexibility and support to continue pursuing a broader resolution with additional key stakeholders.

In parallel, the Company and Assured continued negotiating with the Ad Hoc Mutual Fund Group, which in May 2026 had provided a restructuring term sheet the Company believed could serve as the basis for a value-maximizing, broader consensual transaction. Those negotiations culminated in a Restructuring Support Agreement dated as of September 24, 2026 among the Company, Assured, and the Ad Hoc Mutual Fund Group (the "Consensual RSA"). The Consensual RSA contemplates additional prepetition bridge financing from Assured and postpetition financing from Assured and other parties to the agreement, to both the Debtors and non-Debtor OpCo, as well as approximately $490 million of new long-term capital through exit financing funded by Assured and the Ad Hoc Mutual Fund Group, while addressing billions of dollars of holding-company-level debt.

Additional Prepetition Bridge Financing

In addition to the Initial Bridge Financing, Assured agreed before the filing to provide non-Debtor OpCo approximately $46 million in net proceeds after deducting original issue discount of additional bridge financing to fund Chapter 11 preparation costs, employee-related payments, critical vendor payments, professional fees, and working capital needs in advance of the Petition Date. It was provided on substantially the same terms as the Initial Bridge Financing and served to extend the Company's liquidity runway to prepare for Chapter 11.

First-Day Relief

The Debtors filed motions to continue their centralized cash management system and 25 bank accounts, including authority to continue intercompany transactions with superpriority administrative expense status for postpetition intercompany claims. The accounts fall into four groups:

Because Deutsche Bank is not an authorized depository, the Debtors seek an interim extension of time to comply with, and a final waiver of, section 345(b) requirements. As of the Petition Date, the four active debt service accounts carried a combined balance of approximately $48.1 million; the Debtors are in discussions with Wilmington Savings Fund Society, FSB regarding its potential appointment as successor collateral agent and trustee to replace Deutsche Bank under the Brightline East indenture governing the Parent Notes, with documentation in substantially agreed form, and on replacement the cash would move to accounts maintained by the successor.

The Debtors also seek authority to pay prepetition wages and continue employee compensation and benefits programs, to continue their insurance programs and honor related obligations including modification of the automatic stay for workers' compensation claims, and to establish adequate assurance procedures for utility providers, proposing an adequate assurance deposit of $87,967 against average monthly utility payments of approximately $176,000 over the 12 months ending August 2026. A motion to obtain postpetition financing and grant liens and superpriority administrative expense claims was filed contemporaneously, supported by declarations from Bruce Mendelsohn and Gaurav Malhotra.

On the administrative side, the Debtors seek joint administration, authority to file a consolidated list of their 20 largest unsecured non-insider creditors and to redact personally identifiable information for current and former employees, retention of Stretto, Inc. as claims and noticing agent, a 32-day extension of the deadline to file schedules and statements (to 46 days after the Petition Date), and an extension of the deadline for Bankruptcy Rule 2015.3 reports to the same date, in each case through November 9, 2026.

Governance

Certain Debtors maintain boards of managers comprised of two independent managers appointed in April 2026 who are not Employees. Each receives $45,000 per month payable monthly in advance, plus a per diem fee of $7,500 for each day spent in mediation, being deposed, testifying in court, or spending more than four hours preparing for a deposition or court appearance, and each is entitled to a minimum of $270,000 in aggregate monthly fees over the course of his respective agreement so long as he is not removed by voluntary resignation or for cause. The boards of Debtor Brightline East, Debtor BLTF, and non-Debtor OpCo also include one non-employee independent manager provided by Corporation Service Company ("CSC") under service agreements; CSC is compensated $800 annually by each of Brightline East and BLTF, and under a letter agreement the hourly fee for the CSC independent manager to attend meetings and review documents in connection with these cases is $625, with additional fees assessed for post-filing meetings, document review, approvals, depositions or testimony. CSC was paid a $40,000 retainer prepetition to cover time spent and expenses incurred for the pendency of the cases. The letter agreement was entered in connection with requests that the CSC independent manager attend board meetings to discuss the ongoing financial situations of Brightline East, BLTF, and OpCo, including to potentially consider approval of the commencement of these Chapter 11 Cases.

Path Forward

The Debtors intend to pursue implementation of the restructuring transactions contemplated by the Consensual RSA, to continue evaluating all available and additional options and transactions for maximizing stakeholder value, and to continue negotiations with key stakeholders free from the immediate pressures of upcoming maturities or liquidity constraints, in order to right-size their funded debt obligations and emerge with a more sustainable capital structure.

Key Dates