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

After just five years in business, U.S. private 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 experience 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, businesses enter a liquidation process where the debtor, in this case Verijet, sells its nonexempt property and gives the proceeds to creditors.

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Unlike Chapter 11 bankruptcy, Chapter 7 does not involve a reorganization plan, and usually signals the end of a company.

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

Among those liabilities is $10.5 million owed to 81 jet card customers, with the largest single customer balance reportedly reaching $728,000, Ch-Aviation reported .

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The outlet reports that the airline's assets are primarily tied to an insurance claim involving a jet that was damaged in a 2022 crash.

Ongoing struggles

Verijet's financial troubles were ongoing.

In its five-year run, the operator faced a flurry of lawsuits from former lessors, jet card customers, and investors alleging breach of contract, failure to refund canceled flights, and missed lease payments.

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

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In another case, a jet card customer whose 119 hours of flight time were never fulfilled, and the company was forced to fork out the value of those hours, which amounted to $328,000, according to Private Jet Card Comparisons .

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