Exclusive: ASIC will not act against Bonza bosses

Bonza had four directors prior to its liquidation: chief executive Tim Jordan and chief financial officer Lidia Valenzuela, both based in Australia, and US directors Steve Pasko and Adam Weiss, who worked for parent company and financier 777 Partners.

The watchdog’s decision not to take action does not necessarily mean no wrongdoing occurred, as it may opt not to proceed to enforcement for a variety of reasons, including lack of evidence, or time and/or cost constraints.

“ASIC has sent no further action letters to Australian and US directors of Bonza, confirming it does not intend to proceed to enforcement action at this stage,” an ASIC spokesperson said.

“ASIC may recommence its investigation or commence enforcement action if circumstances change or it receives new evidence.”

Following Bonza’s collapse, Jordan and Valenzuela, alongside Bonza’s administrator and liquidator, Hall Chadwick, accused 777 Partners of undercapitalising the low-cost carrier, leading to its demise.

Hall Chadwick argued in its report to creditors last year that funding from the Miami-based investment firm, on which Bonza relied to keep operating, was “not sufficient to meet the company’s operational requirements”.

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“The Company did receive loan funding from 777 Partners amounting to $77,865,264. However, the funding advances from 777 Partners were paid sporadically, delayed and were ultimately insufficient for the level of funding required to adequately maintain the Company’s operations,” the administrator wrote ahead of a second creditors’ meeting.

“Whilst 777 Partners did provide funding, the funding was insufficient for the level of debt incurred, which continued to increase, particularly from November 2023 to the date of our appointment.”

Reports from investigative football journalism site Josimar last year suggested that 777 Partners has since gone under. The company has faced multiple lawsuits, including one last year by London-based asset management firm Leadenhall Capital, which accused it of fraud.

777, based in Miami and led by Joshua Wander and Steve Pasko, was alleged to have borrowed funds from Leadenhall secured against around $530 million of assets that it did not own, were promised to other parties, or in some cases, did not exist at all.

The firm also faced legal action from aircraft lessors over three 737 MAX 8s and one 737-800 from Bonza’s Canadian sister airline, Flair, that were repossessed in 2023 over unpaid fees.

Hall Chadwick had also suggested that Bonza may have been trading while insolvent, claiming directors were possibly continuing to accept bookings and incur debts on behalf of the company despite not knowing whether Bonza had adequate funding to keep flying.

In particular, the administrator alleged that Pasko and Weiss, who were “at all relevant times, directors and key management personnel of 777 Partners” at the same time as being directors of Bonza, may have been privy to additional information regarding 777’s investment decisions and the potential cancellation of leases, and owed fiduciary duties both to Bonza and 777.

The report noted that Jordan and Valenzuela had provided information and assistance to the administrators, while Pasko and Weiss had not.