Zetta Jet agrees to trustee appointment, seeks approval of financing

By Caroline Salls

Pittsburgh, Sept. 26 – Zetta Jet USA, Inc. entered a stipulation with the U.S. Trustee for its bankruptcy case that calls for the appointment of a Chapter 11 trustee, according to a Monday filing with the U.S. Bankruptcy Court for the Central District of California.

As previously reported, Zetta Jet’s debt restructuring was necessitated by the recent discovery that former managing director Geoffrey Cassidy allegedly had misappropriated funds from the company and allegedly committed other fraudulent activities.

As a result, the company filed a lawsuit in federal court against Cassidy on Sept. 8.

According to Monday’s filing, Cassidy and Li Qi filed a request for an emergency injunction from a Singapore court to attempt to stop Zetta Jet’s pending Chapter 11 bankruptcy proceedings.

The company said it has been advised that the Singapore court has issued an emergency injunction, which Zetta Jet contends is a violation of the automatic stay and is void.

In addition, Li and Cassidy have given formal notice of an “extraordinary general meeting of the members of Zetta Jet Pte. Ltd.,” which is scheduled for Oct. 3 in Singapore.

The primary order of business at the meeting will be to remove the company’s current management, officers and counsel, and to install new officers, with Qi as the chairman of the board and chief executive officer to take control of the Zetta Jet bankruptcy cases “and seemingly to seek to dismiss the debtors’ bankruptcy cases,” the stipulation said.

Qi’s legal counsel informed Zetta Jet’s current management on Saturday that “it is better to let trustee to take over it,” according to Monday’s filing.

“The debtors’ management also believes that under the circumstances of these cases, the appointment of a trustee in the debtors’ cases is in the best interests of the debtors’ estates so that an independent party can determine the optimal disposition of these bankruptcy estates,” Zetta Jet said.

In a motion filed Monday, Zetta Jet also requested court approval of unsecured post-bankruptcy financing provided through the personal credit cards of two of its shareholders, S. Matthew Walter and James Seagrim.

Financing motion

The company said the use of credit cards for paying immediate expenses for fuel and maintenance in a private charter jet company is part of the regular and ordinary course of business.

Because of a roughly $2 million unsecured claim owed to HSBC, Zetta Jet said its HSBC credit cards were cut off almost immediately upon the filing of the bankruptcy cases. The company’s American Express credit cards were cut off on Sept. 21.

“The debtors’ fleet and crews were stranded at airports around the world unable to pay for fuel and maintenance for their jets and hotels for their pilots to sleep,” the motion said.

As a result, Walter and Seagrim put up their personal credit cards to fund operations on an emergency basis.

Specifically, Walter provided $138,000 in funding, as of the morning of Sept. 25, and Seagrim provided $863,436 in funding.

The company said it is requesting court approval of this financing “out of an abundance of caution.”

Zetta Jet is a Burbank, Calif.-based private aviation charter company. The company filed bankruptcy on Sept. 15 under Chapter 11 case number 17-21386.

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