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Zetta Jet committee: proposed DIP facility bad for unsecured creditors
By Caroline Salls
Pittsburgh, Nov. 22 – Zetta Jet USA, Inc.’s official committee of unsecured creditors objected to approval of the debtor-in-possession financing requested by the company’s Chapter 11 trustee, according to a filing with the U.S. Bankruptcy Court for the Central District of California.
“The trustee seeks authority to obtain DIP financing pursuant to terms that are not in the best interests of the general unsecured creditors,” the committee said.
Specifically, the creditor group said the proposed financing will give the DIP lender an advantage in the asset sale process in a transaction that will make it extremely unlikely that general unsecured creditors will see any recovery.
“The DIP lender has overreached its efforts to lock up the assets and is doing its best to shield the debtors’ assets from a competitive marketing process, elevate its previously prepetition unsecured claims into post-petition secured claims, restrict the trustee’s ability to file any plan the DIP lender does not consent to even if it pays off the DIP claims in full and obtain a broad release without the opportunity for parties in interest to investigate whether or not claims against it (and others) exist,” according to the objection.
“At the same time the DIP facility will not even be sufficient to satisfy all claims against the debtors’ estate that will need to be paid in order to confirm a plan of reorganization.”
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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