Spirit Airlines has rejected a merger offer with Frontier as it prepares to exit bankruptcy.Wednesday, Frontier made its second offer to merge with the bankrupt Spirit Airlines, but Spirit rejected it on the grounds that it was financially insufficient.In 2022, Frontier offered to acquire Spirit for $2.9 billion, but the offer was ultimately rejected when Spirit chose to accept a higher offer from JetBlue (which was later blocked for antitrust concerns).Frontier Airlines put forward its current merger offer in hopes of creating a strong, low-fare airline together.We have long believed a combination with Spirit would allow us to unlock additional value-creation opportunities, said Barry Biffle, CEO of Frontier, in a statement.In a joint letter to Spirits chair and CEO, Biffle and Frontiers chair of the board added that they believe the transaction generates more value for all Spirit stakeholders than Spirits current plan filed to the Bankruptcy Court.But Frontiers offer was lower than the amount the two parties had discussed in 2022, Raniero DAversa, an attorney and market-leading practitioner in bankruptcies, out-of-court restructurings, and creditors rights controversies, tells Fast Company.In Frontiers offer, debt holders would receive $400 million in new debt and 19% of Frontiers common equity. It would also require stakeholders to invest $350 million in equity, which they were not willing to do, according to a regulatory filing.The offer appears to be too little, too late, DAversa says.In its rejection of the offer, Spirit said that the board believes Frontiers proposal is so insufficient as not to merit a counter.Accepting or considering this offer could also interfere with the airlines plans to exit bankruptcy, which it had filed for in November. Spirit Airlines is on a fast track to exit, DAversa says.Any serious consideration of the Frontier offer would derail the whole bankruptcy process, which is overwhelmingly supported by its constituents. The airline has a February 13 court date to finalize its exit plan.While a company and its board have a fiduciary obligation to consider any deal for the benefit of its constituents and equity holdersand in the case of bankruptcy, its creditorstheyre under no obligation to actually accept it.Although Spirit has operated normally during its bankruptcy, the airline has cut 200 jobs and sold some Airbus planes in order to raise millions of dollars.DAversa compares the situation to the classic a bird in the hand . . . idiom. Spirit is lined up to come out of bankruptcy imminently, and it appears the airline is ready to fight through its final month rather than merge.