The charter and jet membership provider JetSuite, has filed for bankruptcy this week in the court in Delaware. Prepaid memberships represent a significant proportion of the outstanding debts.
Two weeks ago the company grounded its fleet of Phenom 100 and Phenom 300 light jets, and at the same time said it had furloughed most of its employees. This left the SuiteKey membership holders unable to use their deposits to fly. Note that SuiteKey is the name that JetSuite used for its prepaid, fixed hourly rate jet card type product.
The Delaware bankruptcy filing was done in the name of Superior Air Charter LLC, which is the actual operating company that uses the JetSuite trade name. The court documents show the company owes debts of between $50 million to $100 million, largely to the unsecured SuiteKey members, but has assets of less than $10 million. The largest of these debts, at $931,000, is owed to online streaming company Netflix. Typical SuiteKey memberships were sold in amounts of $100,000 to $500,000, with larger amounts buying lower hourly rates on the JetSuite fleet. So it looks like Netflix did its own custom deal to lower rates even further. Of the top 30 debts, 29 of them are for SuiteKey memberships, with the smallest amount in the top 30 being $219,000.
The main assets are likely to be the fleet of aircraft.
As part of the bankruptcy filing JetSuite obtained a credit facility of up to $3.6 million, which will be secured by substantially all the assets of the company. This money can be used while the Chief Restructuring Officer, Ted Gavin, figures out what to do with the company. The home page for JetSuite suggests it may return, saying “It will seek bankruptcy protection to reorganize, preserve and maximize the value of its assets, and potentially resume operations.” But that is little consolation for the SuiteKey members, who may see very little return on their deposits, given the low level of assets, the current economic uncertainty and its impact on travel.
The advice to ask for your jet card deposit to be put in an escrow, rings truer now than ever. It ensures your money is safe if the jet card provider has financial issues. Use the link on the right to gain access to comparisons of the leading jet card providers, including which providers offer an escrow.