777 Partners Seeks Restructuring Advice After Bonza Airline Collapse

777 Partners, the Miami-based investment firm, has enlisted Los Angeles-based B Riley Advisory Services to aid in restructuring following the failure of Australian budget carrier Bonza, in which it held a majority stake. This move aims to stabilize the investment firm and strategize a profitable path forward after the sale of its stake in Flair Airlines and amid ongoing legal accusations.

A memo from 777 Partners, revealed by the Financial Times, stated that the team from B Riley Advisory Services would help manage “various operational challenges” and rationalize the business. This assistance comes at a critical time as 777 Partners faces accusations from Leadenhall Capital in a London court, alleging fraud and comparing the operation to a Ponzi scheme, charges which 777 vehemently denies.

Mark Shapiro of B Riley has stepped in as interim CEO, with reports suggesting that 777 Partners’ principals, Joshua Wander and Steven Pasko, have been advised to resign. Meanwhile, the remnants of Bonza’s fleet are leaving Australia, with several aircraft already relocated and others pending departure as lessors reclaim their assets.

During a recent creditors’ meeting in Sydney, it was confirmed that Bonza owed over AUD116 million (USD76.7 million) excluding employee salaries. The company was on the brink of processing April’s payroll when operations ceased. The meeting, managed by Richard Albarran of Chadwick Partner, also highlighted interest from around 20 parties in taking over the airline, with serious consideration from about six, including VietJetAir, though no deals were finalized.

Bonza’s remaining asset, an Australian air operator’s certificate for the B737-8, holds potential value for buyers capable of sourcing the same aircraft type or amending the certification. The situation underscores the complex challenges 777 Partners faces as it navigates through this turbulent period, aiming to secure a stable and profitable future.