iscover
Former Bonza parent company and financier 777 Partners has been placed in limited receivership over unpaid legal bills.
The Miami-based investment firm was held in contempt by a Delaware court over the approximately US$600,000 in fees, which it had been ordered to pay to former CFO Damien Alfalla, as revealed in legal documents unsealed earlier this month.
This content is available exclusively to Australian Aviation members.
A monthly membership is only $5.99 or save with our annual plans.
- Australian Aviation quarterly print & digital magazines
- Access to In Focus reports every month on our website
- Unlimited access to all Australian Aviation digital content
- Access to the Australian Aviation app
- Australian Aviation quarterly print & digital magazines
- Access to In Focus reports every month on our website
- Access to our Behind the Lens photo galleries and other exclusive content
- Daily news updates via our email bulletin
- Unlimited access to all Australian Aviation digital content
- Access to the Australian Aviation app
- Australian Aviation quarterly print & digital magazines
- Access to In Focus reports every month on our website
- Access to our Behind the Lens photo galleries and other exclusive content
- Daily news updates via our email bulletin
As reported by ch-aviation, evidence showed that 777 Partners had withheld the ordered reimbursement to Alfalla for around 14 months wile paying US$6.1 million to other law firms.
Magistrate in Chancery Christian Douglas Wright was unimpressed by 777 Partners pleading financial hardship, saying it “is not the same thing as impossibility”, and placed the company in limited receivership for an initial 59 days.
“The only defence 777 Partners offers is financial hardship. But financial hardship is no defence here,” said Wright.
“Even if there were a general financial hardship exemption, 777 Partners has not actually presented evidence of such hardship.
“777 Partners has established, quite convincingly, that over the past 14 months, it has been able to find funds to pay legal fees (while also paying, presumably, other expenses like salaries, rent, utilities, and insurance premiums).
“It just wants to put Alfalla – and this court’s unambiguous orders – at or near the back of the line.”
The court appointed lawyer Shaun Michael Kelly as receiver, with the duty to ensure Alfalla is paid and all outstanding interest, fees on fees, and advancement obligations are covered. The company has also been fined US$500 per day until the contempt is cured.
The news comes several months after ASIC confirmed it had informed Bonza’s Australian and US-based directors it would not at this stage pursue them over the downfall of the carrier, which was liquidated last year after having its aircraft repossessed.
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 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.
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.
