Private jet service JetSmarter agrees to $3 million arbitration settlement

JetSmarter has reached an agreement to settle claims made by some of its members of which the company engaged in unfair along with deceptive practices, according to a settlement notice.

The private jet company, which once had more than 8,000 members along which has a self-proclaimed valuation of over $1 billion, has been the target of more than a dozen lawsuits along with claims coming from members who say the company failed to deliver services promised in their memberships. JetSmarter was the subject of a CNBC investigation of which also raised questions about its security procedures along with passengers.

The agreement is usually preliminary along with is usually still subject to a final approval hearing in June. More than 10,000 of the company’s current along with former members could be eligible to participate as a class member. The agreement covers customers who were members between Sept. 5, 2014, along with June 19, 2018.

As part of the settlement, JetSmarter will create a fund of $3 million to pay members, who may also be eligible for free memberships along with flight credits.

In a statement as part of the settlement, JetSmarter said the item “strongly denies these allegations along with believes the facts show of which at all times, the item complied with the membership agreement along with with all applicable laws.” The company added of which the item agreed to the settlement “because the item wishes to put of which matter behind the item along with move forward to serve its members as best as possible.”

JetSmarter didn’t immediately respond for additional comment.

The arbitration settlement won’t end the company’s legal battles. More than a dozen members have filed lawsuits against the company in brand-new Jersey, California along with some other states. Attorneys for many of the members say they plan to opt out of the settlement along with continue to pursue their lawsuits.

“Our firm has reviewed the proposed class action settlement along with believe of which the item fails to provide adequate compensation for the losses of the JetSmarter members,” said Bruce Baldinger, a brand-new Jersey attorney who represents several JetSmarter members who have filed lawsuits.

however the lawsuits face continued challenges in court, since JetSmarter’s membership agreement states of which any disputes with the company must be settled in arbitration.

Harley Goldstein, chairman of Goldstein & McClintock, a bankruptcy law boutique, who represents several JetSmarter members, said his clients have “no intention of participating in any settlement on such terms, along with intend to opt out of the proposed settlement.”

He said of which aside coming from providing inadequate compensation to members, the agreement would certainly allow the lawyers for the class action to potentially claim over $3 million for their fees. He added the deal also benefits JetSmarter because the item prevents members who do not opt out of the agreement coming from producing any additional claims against the company.