Bankruptcy Trustee Rejects TICO's $2.2 Millon Conquest Claim;
Says TICO Did Not Follow Regulations
by Not Having Trust Agreements from Conquest
Motions Filed for November 2010 TICO AGM
Toronto, 15 September 2010: Canada's Association of Retail Travel Agents (ARTA Canada) announced today that it has now completed its review and analysis of nearly 200 pages of Ontario Superior Court of Justice documents filed by the bankruptcy Trustee in the Conquest Vacations failure.
From January 2010 through July 2010, the Trustee was involved in extensive reports, filings, and decisions with and by the Court detailing the status of creditors, both secured and unsecured. Particularly noteworthy was the fact that the Travel Industry Council of Ontario (TICO) filed an amended secured claim with the Trustee for some $2.2 million to recover funds paid out for trip completion and related services following the demise of Conquest.
The Court filings reveal that the Trustee rejected TICO's claim of being a secured creditor in the amount of $2.2 million stating that TICO failed to abide by the Travel Industry Act Regulations which required TICO to receive copies of trust account agreements between registrants and the registrants' chosen financial institutions where the trust accounts are maintained.
TICO did not have such copies of the agreements from Conquest as is required by the regulations. The filings also reveal that the Trustee further stated that, irrespective of the trust agreements, TICO itself cannot claim against the Conquest estate (valued at approximately $2 million) in that any amounts actually held in such trust agreements must benefit consumers and travel suppliers; not TICO.
ARTA Canada stated that this is yet further evidence of TICO's lack of proper scrutiny over registrants, quite similar to the assessment of TICO by the Court regarding TICO's poor and lax scrutiny in the One Step Travel failure. Ontario travel agencies must realize that TICO's administrative bungling, despite TICO successfully "bringing people home", can never compensate travellers for the traumatic upheaval as vacations are ruined and travel dreams dashed.
Ontario travel agencies will have to bear the brunt of TICO's missteps as credit card companies reach exasperation due to losses incurred through consumer refunds, placing agency merchant agreements and other credit card processing costs at higher risk levels.
In a related matter, ARTA Canada member Helen Thompson Travel filed five motions with TICO yesterday to be considered at the 01 November 2010 TICO AGM:
1. A motion to require TICO to release to registrant members the results of the One Step Travel Third Party Review, which, on information and belief, has been in TICO's possession for quite some time;
2. A motion to require TICO to provide a written explanation as to why none of the Province's July 2009 recommendations regarding greater disclosure of registrant compliance, following the demise of Conquest, have been implemented;
3. A motion to require TICO to provide a written explanation why an amendment to the Travel Industry Act Regulations allowing TICO to refuse to provide financial information about registrants was never disclosed to registrants in advance nor subject to comments nor consultation, and why such a shielding of such information does not run counter to the Province's own recommendation for greater disclosure;
4. A motion to require TICO to provide a written explanation as to why it did not have the required trust account agreements from Conquest Vacations, and how TICO plans to minimize exposure to registrants in future failures where amounts, absent a perfected secured claim, might not be recoverable under similar circumstances;
5. A motion to require TICO to provide a written explanation as to what progress has been made in amending the regulations so that travel agents are permitted to seek reimbursement from the compensation fund for any commissions or service charges due from a wholesaler, but not paid, as a result of a registrant wholesaler failure.
ARTA Canada urges all registrants to attend the 01 November 2010 TICO AGM at 4:00PM at the Toronto Congress Center, 650 Dixon Road, Toronto and to support Helen Thompson Travel's five motions.
About ARTA Canada
ARTA Canada is the largest non-profit federally incorporated professional association of travel retailers in Canada, the members of which consist exclusively of travel agencies and travel agents. In addition to advocating fair and equitable treatment of travel consumers, ARTA Canada represents the commercial and strategic interests of its member travel agencies and travel agents in a variety of national and provincial domains including regulatory and legislative matters, automation, technology, sales and marketing, and distribution.
ARTA Canada is the strategic partner in Canada of the U.S.-based Association of Retail Travel Agents (ARTA). ARTA Canada is the Canadian member of UFTAA, the United Federation of Travel Agents' Associations. To join ARTA Canada, complete details and online membership application and secure payment are available on the ARTA Canada web site at www.artacanada.ca/join.