Luxury jet firm owes over 200 creditors

Zetta Jet files for Chapter 11 protection in US and alleges ex-MD misappropriated funds

From an electrician to a major bank, those who are owed monies by American luxury jet operator Zetta Jet are following the drama with some interest as events unfold in Singapore and the United States.

Before the firm filed for Chapter 11 protection in the US in mid-September, it alleged that its former managing director, Mr Geoffery Cassidy, had misappropriated funds. Mr Cassidy denied the allegations, and secured an injunction here to stop the Chapter 11 action.

By filing for Chapter 11 - a form of bankruptcy in America - firms buy some time to reorganise their operations and their debts.

Owners of Zetta Jet, which has an office near Seletar Airport and one in the US, say the firm owes more than 200 creditors. This was detailed in a 57-page US court document seen by The Straits Times.

The document lists 20 international companies with the largest unsecured claims ranging from US$232,000 (S$315,200) to US$15 million.

Of the 200 creditors, 25 are Singapore-based businesses such as HSBC, which is owed US$2.08 million in credit card services, and World Fuel Services, which has an outstanding sum of US$4.08 million. Both creditors were contacted but did not respond at press time.

Other creditors include aviation services, legal firms, a garment retailer and a publishing firm. But small business operators are included in the list too.

An electrician, who wants to be known only as Mr Ong, is owed $950 for aircon cleaning services at Zetta Jet's office.

Zetta Jet has also yet to pay him $250 for a job he carried out about three months ago. Mr Ong said he was unaware of the Chapter 11 move.

Tim Heng Transport, a limousine services company, is owed "less than $1,000", said a staff member. It was for ferrying clients from airport to hotel.

US court documents claimed that Mr Cassidy had used company funds for personal purchases... and accepted kickbacks from aircraft acquisitions. Mr Cassidy maintains his innocence.

Before filing for Chapter 11, Zetta Jet had also lodged a lawsuit in the US against Mr Cassidy. It alleged that the debt restructuring "was necessitated by the company's recent discovery that its former managing director, Geoffery Cassidy, had misappropriated funds from the company and committed other fraudulent activities".

US court documents claimed that Australia-born Mr Cassidy had used company funds for personal purchases, took free transportation and accepted kickbacks from aircraft acquisitions.

As a result, Mr Cassidy, who was based in Singapore, was said to have "wrongfully deprived Zetta Jet and/or Zetta Jet USA Inc of at least US$20 million to US$30 million".

Mr Cassidy maintains his innocence and took court action in Singapore on Sept 18 to stop the US bankruptcy proceedings. In an affidavit filed in the Supreme Court, Mr Cassidy said: "I should make it clear that I was absolutely not guilty of any wrongdoing whatsoever. Everything that I had done was for the good of Zetta Jet Singapore."

While the injunction was granted, it was announced on Oct 16 that a Chapter 11 trustee had been approved by a US bankruptcy court to oversee Zetta Jet's restructuring and business affairs.

The company's interim CEO, Mr Michael Maher, said in a press statement to ST that normal business operations would carry on.

"The company has ample liquidity to meet all of its post-bankruptcy obligations and our commitment to providing our passengers with safe, reliable and luxurious air travel remains unchanged," he said.

Attempts to contact Mr Cassidy were unsuccessful.

A version of this article appeared in the print edition of The Straits Times on October 19, 2017, with the headline 'Luxury jet firm owes over 200 creditors'. Print Edition | Subscribe