Zetta Jet trustee gets OK of settlement with Yuntian, Minsheng, EDC

By Sarah Lizee

Olympia, Wash., June 8 – Zetta Jet USA, Inc.’s Chapter 7 trustee received court approval of a settlement with settling defendants Yuntian 3 Leasing Co., DAC, Yuntian 4 Leasing Co., DAC, Minsheng Financial Leasing Co., Ltd., Minsheng Business Aviation Ltd. and Export Development Canada Ltd. (EDC), according to an order filed Tuesday with the U.S. Bankruptcy Court for the Central District of California.

Chapter 7 trustee Jonathan D. King said the settlement will result in the withdrawal of over $14 million in administrative claims, $214 million in unsecured claims and $8 million in secured claims against the debtors’ estates on a consolidated basis.

King said that while operating the debtors’ business in the Chapter 11 cases and investigating potential methods of recovery of assets of the debtors, he uncovered extensive fraud committed by Zetta Jet’s chief executive officer, including a fraudulent aircraft purchasing program.

In September 2019, the trustee filed a complaint against the settlement defendants to recover the claims, and later the court sent the parties to mediation to resolve the claims without the need for litigation.

Under the settlement, Yuntian and Minsheng will pay $2.25 million to the trustee on behalf of the debtors’ estates within the next 15 days.

The Minsheng defendants will pay another $2.25 million to the trustee on behalf of the debtors’ estates on Jan. 26, 2022.

Yuntian will withdraw its proofs of claims with prejudice. The trustee and the Minsheng defendants will mutually release each other from any and all claims. Export Development Canada and the trustee will mutually release each other from only the claims that relate to the plane 12 financing and transfer to Export Development Canada with respect to the financing, with all other claims and defenses being fully preserved.

Zetta Jet is a Burbank, Calif.-based private aviation charter company. The company filed for bankruptcy on Sept. 15, 2017 under Chapter 11 case number 17-21386.

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