U.S. Trustee for Zetta Jet case objects to post-bankruptcy financing

By Caroline Salls

Pittsburgh, Nov. 20 – Region 16 U.S. trustee Peter C. Anderson objected to Zetta Jet USA, Inc.’s proposed post-bankruptcy financing, according to a Monday filing with the U.S. Bankruptcy Court for the Central District of California.

Anderson said no budget is attached to the financing motion. As such, the U.S. Trustee said it is unclear whether Zetta Jet will have enough cash to fund its operations through confirmation of a Chapter 11 plan.

In addition, Anderson said a $1.5 million general unsecured claim held by the lender has been rolled into the proposed financing, giving that claim super-priority status over other unsecured claims filed in the company’s bankruptcy case.

Anderson also raised concerns regarding a no-bid period and break-up fee contained in the financing agreement. The U.S. Trustee said the break-up fee exceeds the normal amount and “may have a chilling effect on potential bidding” for the company’s assets.

A hearing is scheduled for Nov. 28.

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

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