Zetta Jet Pte. Ltd. has received $8.5 million from a company it owes money to, allowing the private aviation company to continue operations while working through bankruptcy.
The money provided by Scout Aviation II LLC will be used by Zetta to pay for aircraft usage, fuel, employee wages and other obligations.
Zetta Jet, headquartered in Singapore, has its charter sales and operations center at the Hollywood Burbank Airport in Burbank. The company filed for Chapter 11 bankruptcy to restructure its debt in September.
Scout Aviation was listed in the Chapter 11 filing as being owed $1.4 million for aircraft maintenance by Zetta. In the financing term sheet, Scout Aviation said it will sponsor Zetta’s restructuring plan, acting as a stalking horse bidder.
The company’s Chapter 11 Trustee Jonathan King said the funding will allow it to pursue a plan to reduce costs and operate its aircraft fleet more efficiently. The process will culminate in a competitive sale and emergence from bankruptcy by early next year.
“Through this process, we hope to preserve and harvest the going concern value of Zetta Jet to maximize recoveries for the company's stakeholders and continue to provide a superior product for our valued customers for years to come,” King said in a prepared statement.
The bankruptcy filing came as a result of discovering that a former managing director of Zetta had allegedly misappropriated funds and committed other fraudulent activities. A lawsuit was filed by Zetta against the director in U.S. District Court for the Central District of California.