Zetta Jet has lined up $8.5 million in financing from existing lessor Scout Aviation II as the international charter operator positions to reorganize under Chapter 11 bankruptcy protection and to secure a buyer for the company.
The funding will help Zetta Jet to meet obligations associated with its daily operations, including payments for aircraft usage, fuel, wages, goods and services, said the company, which filed for Chapter 11 restructuring in September. Zetta Jet is seeking interim U.S. bankruptcy court approval to immediately use up to $4.5 million of the financing and access the full amount in December.
“We have already begun restructuring our aircraft fleet to operate more efficiently and otherwise reduce redundant costs,” said Jonathan King, a partner and co-chair of DLA Piper's white collar, corporate crime and investigations practice, who was approved by the court last month to serve as the Chapter 11 trustee. “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.”
Zetta Jet expects to file a motion shortly that lays out a bidding process for the sale of the company. That plan must receive bankruptcy court approval. Scout Aviation will act as a stalking horse bidder and sponsor the restructuring plan.
"Scout Aviation has been a good business partner to the company and this financing commitment demonstrates its continued confidence in the company," King said.
As Zetta Jet continues its reorganization efforts, the dispute with its former managing director Geoffery Cassidy also continues. Cassidy last week issued a statement laying out objections to the bankruptcy proceedings and company’s actions, and he's denying charges that the company has leveled against him. Cassidy has maintained that the bankruptcy procedures were avoidable and said the situation is “unacceptable.”