Zetta Jet earlier announced today that its existing lessor, Scout Aviation II, LLC, has committed to provide up to $8.5 million in post-petition financing. The financing, subject to Bankruptcy Court approval, will enable the operator of long-distance luxury private jets to satisfy customary obligations associated with the daily operations of its business, including the timely payment for aircraft usage, fuel, post-petition goods and services, employee wages and other obligations, according to a press release.
“With the help of my advisors, the management team and I have been working on a business plan to restore the company to profitability,” said Zetta Jet’s Chapter 11 Trustee Jonathan King. “We have already begun restructuring our aircraft fleet to operate more efficiently and otherwise reduce redundant costs. Now with funding in place, the company will have financial resources to implement that plan and sufficient liquidity to fund the company through a competitive sale process culminating in emergence under a plan of reorganization. Through this process, we hope to preserve and harvest the going concern value of Zetta Jet to maximize recoveries for the company’s stakeholders, continue to provide a superior product for our valued customers for years to come, and minimize any disruption to our employees, vendors and other constituents.”
According to the release, Scout Aviation will sponsor Zetta Jet’s restructuring plan, acting as a stalking horse bidder. As required under Chapter 11, Zetta Jet will establish a sale process, which will be subject to approval by the Bankruptcy Court, and it intends to file a motion seeking approval of bidding procedures shortly. The Company hopes to emerge from Chapter 11 in February 2018.
“Scout Aviation has been a good business partner to the Company and this financing commitment demonstrates its continued confidence in the Company, the exceptional experience Zetta Jet provides travelers worldwide, and its ability to achieve its potential,” King said. “I also want to recognize the hard work and dedication of management, led by co-founders Matthew Walter and James Seagrim, and all the Zetta Jet employees that have worked tirelessly to ensure that the Company has had no service interruptions and maintained its ARGUS Platinum rating as well as Wyvern Wingman and IS-BAO safety ratings throughout the restructuring process.”
The Company said that it filed a motion yesterday in the U.S. Bankruptcy Court for the Central District of California, seeking interim approval in November to use up to $4.5 million of the $8.5 million financing commitment with final approval of the full amount of the financing commitment in December.
The company has been the subject of high drama since September when its bankruptcy filing was accompanied by a lawsuit against deposed managing director Geoffrey Cassidy charging misappropriation of funds and corruption. Cassidy tried to block the Chapter 11 filing in Singapore, the company’s headquarters but was unsuccessful. The filing left a long trail of creditors.
Zetta Jet had been attempting to carve a niche in long-haul luxury private jet travel with elevated service levels mainly positioned against the likes of NetJets, VistaJet and China’s Deer Jet. Cassidy was accused of using company funds to buy luxury cars, yachts and houses while flying on company planes for personal use.