After taking flight in 2020, by 2023, Verijet had grown to become the 13th-largest private jet operator in the U.S., ranked by charter and fractional flight hours. Last week, a receiver who was appointed to oversee the company back in June filed for Chapter 7 bankruptcy protection. Unlike Chapter 11, which enables a company to reorganize and continue, Chapter 7 provides a means to liquidate assets and pay off debts.
The filing comes less than a month after its founder and CEO, Richard Kane, died of an apparent heart attack.
Kane’s vision had been to use the single-engine Cirrus Vision Jet, also known as the SF50, to blanket the U.S. and then Europe with a private jet service that enabled flyers affordable access.
The jet, which can be flown with one pilot, includes a state-of-the-art auto-landing system that, if the pilot becomes incapacitated, can land itself with the touch of a button.
Depending on the configuration, it can seat three to five passengers. While it doesn’t have a toilet, Kane believed the airplane would replace long drives and offer a more economical alternative than other jet alternatives.
In fact, Verijet launched with hourly rates for jet card buyers as low as $2,500, more than 40% lower than very light jets such as Embraer’s Phenom 100 or the Honda Aircraft HA-420 HondaJet.
After starting with a focus on flights within 600 nautical miles of Orlando, Florida, Kane expanded to California, Texas, the Northeastern U.S., and Canada.
Verijet ranked 30th among Part 135/91k operators in North America at the end of 2022.
Funding the expansion was the sale of jet cards, which offered guaranteed rates but not availability.
In other words, you had to be flexible.
However, along with the growth came a steady flow of lawsuits, including from companies that had leased aircraft to Verijet, employees, trade vendors, and consumers..
Consumers who had purchased the non-refundable jet cards complained in their legal filings that the company often canceled flights, making their jet cards essentially unusable.
In 2023, Kane left and then returned to the corner office over several months.
One constant was claims and promises of more financing.
In February 2023, Verijet announced a non-binding letter of intent to merge with a SPAC led by former Boeing CEO Dennis Muilenberg that would have made the company publicly traded. However, within weeks, the SPAC’s shareholders decided to liquidate the fund.
Upon returning to his CEO position, Kane claimed to have secured a significant investment from Delaware-based Solaino.
Kane said at the time, “Solaino’s initial infusion of $85 million of working capital into Verijet empowers and advances our efforts in the journey toward decarbonizing and democratizing private travel and business expansion,” adding, “This initial capital injection from Solaino positions Verijet for accelerated development, market expansion, and enhanced innovation across the industry. This partnership leverages the financial acumen and global reach of Solaino to empower Verijet’s ongoing mission to drive technological advancement and redefine aviation industry standards.”
A Solaino spokesperson, Kyal Erikson, seemed to confirm the investment, with a written statement, “Solaino is excited to announce its partnership with Verijet, an organization that shares our commitment to innovation and growth.”
Last year, Kane said he was pivoting, in part, toward medical flights and had an MOU with a family office representing First Nations in Canada.
Kane had also alleged a former board member was trying to drive the company into bankruptcy as part of a takeover plot.
At the time of his death, the fleet had dwindled from around 20 jets with plans for hundreds to just three aircraft, none of which had flown in the previous month.
The court-appointed receiver, Miami attorney David Mandel, declined to comment earlier in the week when contacted following Kane’s death, which the company did not announce.
By the end of the week, he had filed papers for Chapter 7 liquidation.
The ledger showed no cash across several bank accounts, and its biggest asset was an insurance claim for over $2.4 million.
Other than that, the only asset listed was $200 in furniture held at a Public Storage facility in Sanford, Florida.
The $38.7 million in liabilities included numerous judgments, a $58,465 civil contempt order against Kane, and $10.5 million in unused jet card deposits from over 80 customers, including 39 with balances of over $100,000 with the company.
In the order appointing a receiver, Judge Migna Sanchez-Llorens wrote, “Verijet, Inc. and Richard Kane knowingly or recklessly failed to provide complete and current information and records to which the judgment creditor was entitled.”