US airline files for bankruptcy with $38M+ in mounting debt, dozens of lawsuits

After just 5 years in business, U.S. non-public airline Verijet has filed for bankruptcy following the death of its founder and CEO, Richard Kane.

The airline, which touted itself for offering a more eco-friendly flying expertise with “100% carbon neutral flights,” filed for Chapter 7 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Florida on Oct. 9.

Under Chapter 7 bankruptcy, companies enter a liquidation course of where the debtor, in this case Verijet, sells its nonexempt property and offers the proceeds to collectors.

Unlike Chapter 11 bankruptcy, Chapter 7 doesn’t contain a reorganization plan, and often indicators the end of a company.

Court filings show Verijet filed with $2.5 million in property and more than $38 million in liabilities.

Among those liabilities is $10.5 million owed to 81 jet card clients, with the most important single buyer steadiness reportedly reaching $728,000, Ch-Aviation reported.

The outlet studies that the airline’s property are primarily tied to an insurance coverage declare involving a jet that was broken in a 2022 crash.

Verijet’s financial troubles have been ongoing.

In its five-year run, the operator confronted a flurry of lawsuits from former lessors, jet card clients, and traders alleging breach of contract, failure to refund canceled flights, and missed lease funds.

In one case, Verijet was compelled to pay $3.4 million to a leasing company in relation to a defaulted plane lease and damages, Aero-News reported.

In another case, a jet card buyer whose 119 hours of flight time have been never fulfilled, and the company was compelled to fork out the worth of those hours, which amounted to $328,000, according to Private Jet Card Comparisons.

Read the unique article on MassLive. Add MassLive as a Preferred Source by clicking right here.