TravelBrands Update: Commissions & Suppliers Will Be Paid During Restructuring

Open Jaw
by Bruce Parkinson

Frank DeMarinis

TravelBrands is vowing to continue to pay agents and suppliers “in the normal course" while the company goes through a restructuring process.

Typically, such payments are halted by the courts when a company seeks creditor protection. But in this case, Frank Demarinis, one of 3 brothers who run TravelBrands, has filed a sworn affidavit with the courts stating that the company “intends to make payments for goods and services supplied post-filing in the ordinary course."

To back up that claim, the affidavit states, “the company has $4 million of committed funding from Red Label to fulfill this commitment."

TravelBrands says the reasons for the filing for creditor protection relate to “isolated" parts of the business – namely, a “revenue-sharing deal" with Sears Travel leftover from the Thomas Cook acquisition and the leases on 2 commercial real estate properties. The company says other parts of its business – the vast majority – are unaffected.

Clearly, the cooperation of both suppliers and agents is essential for the future of TravelBrands. The affidavit states that the company “is heavily reliant on leisure travel products and on services that it purchases from various 3rd party suppliers, including hotel, cruise line, airline and car rental suppliers."

Regarding travel agents, TravelBrands states that its wholesale brands/divisions are the core of the business and that travel agents sell all of that product. “In other words," the affidavit states, “without the travel agents there is no wholesale business."

To keep suppliers providing the product and agents making bookings, TravelBrands says it is “seeking the right, but not the obligation to pay pre-filing amounts owing in arrears." It continues: “This will serve to safeguard the company's core wholesale brands/divisions and therefore preserve the company's enterprise value."

As Nick Anstett, a communications spokesperson engaged by TravelBrands puts it: “Suppliers and vendors are so vital to the business of TravelBrands that they want to make sure they keep these people happy and supportive throughout the process."

Anstett stresses that the CCAA process is considerably different than the Bankruptcy & Insolvency Act (BIA) in that it relates to operating a going concern that needs some restructuring with the intention of coming out a stronger entity.




Travel Bug - June 4, 2015 @ 10:06
http://www.kpmg.com/Ca/en/services/Advisory/TransactionRestructuring/CreditorlinkSites/TravelBrands/Documents/List-Of-Known-Creditors.pdf

TA - May 29, 2015 @ 15:05
What Donna said.. 100%

Donna - May 29, 2015 @ 10:05
What we are not hearing is how they are going to deal with the Sears Travel issue. I have many friends/agents that work there. This is very precarious for them. I have seen extremely harsh methods used on these agents in the past couple of years and my heart goes out to them. I am concerned for their jobs. This is already tough times for the rest of us, I would hate to see TravelBrands leave these agents high and dry.

JaysD - May 28, 2015 @ 16:05
At least they are upfront with their values and commitments. Others have come and gone, but those that live up to their words will remain for a long time. Keep in mind other companies just walked away and left agents hanging with no support.

Cathy - May 28, 2015 @ 15:05
Certainly Travel Brands products are a vital part of our business! But we are also a wary bunch, we retailers have been burned multiple times in the past for our loyalty...Still reeling from Canada 3000 fiasco, a trusted brand that disappeared one night...

Tony - May 28, 2015 @ 11:05
They are true gentlemen! We need more wholesalers like them! Thanks for agents top of mind...You have my full support through the process. In fact your probably going to get more bookings from me. :)


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