Frank DeMarinis Optimistic TravelBrands Saga Will Have Happy Ending
Frank DeMarinis says he’s more optimistic now than he was 3 or 4 wk. ago that TravelBrands will be able to successfully emerge from the Companies’ Creditors Arrangement Act (CCAA) process.
DeMarinis, who along with brothers Enzo and Joe make up the principals of the 10 brand TravelBrands group, spoke to Open Jaw soon after an Ontario court granted the company an extension of stay through 30SEP.
The very fact that the court allowed the extension is a positive sign, DeMarinis says. “The only reason why we would be granted an extension through the courts is that the courts see the progress we’ve made so far. Great progress has been since we entered CCAA, with IATA, Sears and now the landlord. With the landlord in particular there’s been a lot of movement over the last little while and I’m very optimistic that we will be able to get into a settlement. I’m more optimistic now than I was 3 or 4 wk. ago.”
If a deal can’t be negotiated with the landlord of 175 Eglinton Avenue East, where TravelBrands has nearly 15 years remaining on a 20 yr. lease inherited when it purchased Thomas Cook’s Canadian operations, there’s the potential that TravelBrands would have to initiate a ‘stalking horse’ sales process.”
“If we cannot come to terms with the landlord then there’s no other alternative. The ‘stalking horse’ is a bidding process where TravelBrands gets put up for sale to the highest bidder. And we have a right to bid for that sale as a secured creditor,” DeMarinis says.
For creditors, much depends on whether TravelBrands can complete a deal with the landlord, and if it can’t, payment to creditors would all depend on who owns the business at the end of the process.
But DeMarinis stresses he believes the outcome will be positive. “That’s the extreme route to go to. We still want to pay our creditors 100%. We don’t want to have any creditors. We want to make everyone whole. Our priority is to negotiate to come out of CCAA having all creditors in good standing. And we are very confident we will come to a resolution with the landlord in the near future.”
DeMarinis says he is humbled by the support the company has received from agents and suppliers. “Travel agents are still continuing to book with TravelBrands because of our reputation and the trust they have in us, the 3 of us (Frank and his brothers), and that has been speaking volumes over the last 2½ mo. that we’ve been in this whole process.
“I can’t express enough my gratitude to hear the kinds of words I keep hearing week after week, the confidence that people have in us in the ability to get the job done through CCAA and that they still want to see the great brands of Sunquest and Holiday House and the others to survive. And that gives me great encouragement.”
The same goes for the employees of TravelBrands, DeMarinis says. “We have great staff and it speaks volumes of the organization of who we are today, and the ability in times of such, to come together as a family and be united and believe in the outcome.”
On the sales front, DeMarinis says bookings for the winter are flat vs. last year, which he calls “a very positive sign considering the situation.”
He’s anticipating a “tough winter” throughout the marketplace, due to additional capacity “and with the dollar where it’s currently at and the uncertainty of where it’s going to be, come the winter.”
On the other hand, DeMarinis says he believes there will be fewer last-minute sales, as tour operators have been aggressive in incentivizing advance sales.