How Geoffrey Cassidy defrauded Zetta Jet to bankruptcy

It is no longer news that Geoffrey Cassidy, the former chief executive of Zetta Jet contributed to its fall, however, details of the scandal are still unfolding.

Last week, Zetta Jet and its parent company Zetta Jet PTE Ltd filed for Chapter 11 bankruptcy protection in the Central District of California, LA division saying it needs to restructure its debt following the discovery that Geoffrey Cassidy had committed various fraudulent acts that put the company in dire straits.

According to Ch-Aviation, The airline has also filed a lawsuit against Geoffrey Cassidy and has appointed Michael Maher as interim CEO to guide the company through the restructuring process and legal issues.

“By availing itself of the Chapter 11 process, the Company will be able to continue its normal daily operations while the management team works to restructure the Company’s debt, making Zetta Jet financially stronger,” Maher said.

In its lawsuit, Zetta Jet contends that Cassidy, along with his wife Miranda Tang, utilised company funds “to purchase and/or renovate personal property including boats and related items valued conservatively at between $3 million and $10 million.” They also claim that Cassidy purchased property in France and Singapore, luxury vehicles, held extravagant and expensive parties across the globe, and used company jets for personal transportation.

theme_forest_300x250
Zetta’s lawsuit puts the total amount of company funds used by Cassidy for personal purposes at a conservative estimate of between USD20 – 90 million.

In addition to misappropriation of company funds, Zetta claims that Cassidy received significant kickbacks from Jetcraft for the purchase of seven Bombardier Global Express aircraft, to the tune of USD2 million per aircraft.

“The kickbacks inflated the financing obligations of Zetta Jet Pte. Ltd.; and the kickbacks continue to cause harm to this day,” the suit says.

Jetcraft has denied the allegations, saying the claims are “wholly inaccurate”.

Suffering financially from Cassidy’s actions, Zetta claims it was then forced to seek outside capital, diluting the shareholding of the other co-owners. During this transaction, they claim Cassidy misrepresented the deal to gain additional shares for himself.

In its press statement, Zetta emphasises that it will continue to operate as per normal.

“Flight operations at Zetta Jet will continue as they always have. 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,” Maher said.

See below the full press release:

Zetta Jet announced today that on September 15, 2017, Zetta Jet Pte. Ltd and its U.S. subsidiary, Zetta Jet USA, Inc., filed voluntary bankruptcy petitions under Chapter 11 of the U.S. Bankruptcy Code to seek to restructure their debt while continuing normal business operations.

The Company said that the debt restructuring was necessitated by the Company’s recent discovery that its former managing director, Geoffrey Cassidy, had misappropriated funds from the Company and committed other fraudulent activities. As a result, the Company filed a lawsuit in federal court (case number: 2:17-cv-06648) against Cassidy on September 8, 2017.

Following Cassidy’s termination in mid-August, the Board of Directors appointed Michael Maher as Zetta Jet’s CEO. Maher is an experienced leader who held various senior leadership positions with a privately-held industrial management contractor. A veteran of the U.S. Navy, Maher also served in various roles in the U.S. Government. He was educated domestically and internationally with a background in nuclear power production and international business. He was a top athlete for The Queens College while attending Oxford University.

“By availing itself of the Chapter 11 process, the Company will be able to continue its normal daily operations while the management team works to restructure the Company’s debt, making Zetta Jet financially stronger,” Maher said.

The Company emphasized that normal business operations would continue throughout the restructuring process and beyond.

Maher concluded, “Flight operations at Zetta Jet will continue as they always have. 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. The Chapter 11 filings will enable us to restructure the Company’s debt, providing us with the increased financial flexibility to further enhance our market-leading position and ensure the long-term viability of the Company.”

The Company plans to file a number of “first-day” motions with the Bankruptcy Court to facilitate a smooth transition into Chapter 11 and minimize business disruption. Among other things, the motions request authorization to continue certain customer programs and to honor certain employee compensation and benefit obligations.

The Company filed its Chapter 11 bankruptcy petitions in the Central District of California, Los Angeles Division.

Leave a Reply

Your email address will not be published. Required fields are marked *