Creditors Support TravelBrand Plan, But New Wrinkle Emerges

Open Jaw

TravelBrands announced Friday that its creditors have voted overwhelmingly in support of a “Plan of Compromise or Arrangement” that will advance the process as the company works to emerge from Companies' Creditors Arrangement Act (CCAA) protection.

 

Over 99% of TravelBrands ‘Affected Creditors’ voted in support of a plan that will see them paid in full by November 2016.

 

There is, however, a potential new wrinkle in the story. TravelBrands announced that it has sent a ‘Notice of Disallowance’ to a party that just submitted a significant claim, rejecting the claim in its entirety. The company says the claim was anticipated and Counsel to the holder of the disputed claim was in attendance at the creditors’ meeting Friday.


Travelweek is reporting that the new claimant is Gibraltar Realty, but that the amount of its claim was not disclosed. During the meeting, court monitor KPMG says the new claim was recently filed and could not be resolved prior to the meeting. The monitor also stated that the claim relates to a situation that pre-dates the present management of TravelBrands.

 

TravelBrands says it will work towards a potential resolution of the disputed claim, but made the following statement: “However, if the issue cannot be resolved in the near term, TravelBrands may revisit whether it is necessary to revoke the Plan and seek the Court's approval of a sale process or credit bid.”

 

During the meeting where creditors were called to consider and vote upon the plan, TravelBrands advised that certain amendments had been made to facilitate the satisfaction of certain conditions to an asset purchase agreement between TravelBrands and its parent company. The distributions to Affected Creditors set out in the Plan were not changed by the amendments.

 

Court-appointed Monitor KPMG Inc. continues to oversee the business and financial affairs of the company. 


updated 03NOV 2:19 p.m.





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