Judge Would Not Clear New Financing To Keep The Charter Company Open

Zetta Jet has been shut down and its assets are to be liquidated to satisfy debt, according to court documents filed in California.

CH-Aviation reports that a Central District of California Bankruptcy judge would not approve an attempt by Zetta Jet to secure $8.5 million in post-petition financing from Scout Aviation II LLC, which was attempting to bail out the ailing charter company.

Scout was an existing lessor to the company, according to a November news release announcing the offer of assistance. Scout Aviation was to have  sponsored the Company's restructuring plan, acting as a "stalking horse" bidder.

But before that could happen, creditors took possession of six of Zetta Jet's airplanes. In light of those developments, Jonathan King, the bankruptcy trustee for Zetta Jet, changed the filing from Chapter 11 to Chapter 7 on December 1.

The company and its parent, Zetta Jet Pte based in Singapore, filed for Chapter 11 bankruptcy protection with a plan to reorganize the company by February of next year. In the filing, they cited allegedly fraudulent acts by managing director Director Geoffrey Cassidy, who is suspected of misappropriating between $20 and $90 million in company funds. Both Zetta Jet USA and Zetta Jet Pte have sued Cassidy.

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FMI: Original Report