Brightline persuaded creditors owed about $1 billion to back a deal to repair its balance sheet and won court approval for a new loan to keep the Florida passenger railroad running while in bankruptcy.

Two groups of bondholders have joined a proposed restructuring support agreement that’s key to Brightline’s plans to emerge from bankruptcy, Skadden Arps’ Paul Leake, who represents the company, told the judge overseeing the company’s Chapter 11 case. Brightline’s bankruptcy-exit proposal now has the backing of creditors holding about $4.6 billion of its debt, Leake said.

That support came Tuesday morning, shortly before US Bankruptcy Judge Mark E. Hall approved a new financing package that will initially give the railroad $190 million to continue operating while its parent reorganizes. The railroad itself is not part of the Chapter 11 filing. Brightline must return to bankruptcy court in the coming weeks for approval to increase the size of the debt package to $258 million.

Hall approved the new financing over the objection of CK Opportunities Fund, an affiliate of Knighthead Opportunities Capital, which has been battling Brightline in New York state court over a 2022 stock deal that allegedly stripped lenders of valuable collateral. In a lawsuit filed in 2023, CK Opportunities claimed the transaction was a so-called fraudulent transfer that should be reversed. The lawsuit has not yet been set for trial, according to court documents. The case is FIHPNP LLC, 26-20876, US Bankruptcy Court, District of New Jersey.