Welcome to WSJ Pro Bankruptcy's Daily Briefing. It's Tuesday, July 29. In today's briefing, Terraform Labs' wind-down administrator is fighting with law firm Dentons ahead of a fee hearing, and Nikola wants an $80 million government fine wiped out in its bankruptcy case.

Terraform chapter 11 administration accuses law firm Dentons of obstructing probe. The administrator winding down what remains of Terraform Labs accused the company's former law firm Dentons of obstructing efforts to investigate its role in Terraform's collapse until a bankruptcy court signs off on $25 million in legal fees.

Dentons wants to “run out the clock” until a final fee application related to its legal work for Terraform comes up for court approval in September, according to court papers filed by the administrator, Todd Snyder.

• Terraform collapsed in 2022, causing billions of dollars in losses and triggering civil and criminal investigations worldwide. Its Terraform’s liquidation plan was approved in September after its bankruptcy filing last year.

Spirit Airlines to furlough pilots to match smaller flight schedule. Spirit Airlines plans to furlough about 270 pilots to adjust its operations to match a reduced flying schedule, the airline said.

The budget airline emerged from bankruptcy in March, but travel demand among price-sensitive consumers has remained under pressure. Several carriers, including Spirit, have been culling planned flights after the peak summer travel season.

Spirit has made other job reductions in the past year to reduce operating costs. It also furloughed about 200 pilots in January. The airline said it has about 2,800 pilots.

The airline is looking to reshape its business, pivoting from the bargain-basement fares and barebones tickets it was known for to chase more upscale travelers willing to pay for upgrades and amenities.—Alison Sider

Nikola seeks to subordinate SEC claim. The defunct electric truck maker is seeking to negate an $80 million claim against its bankruptcy estate stemming from an earlier settlement with the Securities and Exchange Commission.

Nikola, winding down in bankruptcy, said in court papers that allowing the SEC to recover on its claim would wrongly elevate the interests of the company's stockholders over bankruptcy creditors. The company had already paid $45 million under a $125 million securities-fraud settlement in 2021 before its bankruptcy filing in February.

Nikola's bankruptcy lawyers called the government claim a "disguised claim for holders of equity interests." The company's liquidation plan, which would wipe out the SEC claim, is scheduled to be heard in bankruptcy court next week. —Andrew Scurria

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