Far&Wide Buyers Pledge Stability

Six brands sold in bankruptcy auction this week; second auction set for later this month

By: Lisa Jennings

Travel Corp. is promising to maintain the four tour operators it has bought from bankrupt Far&Wide Corp., saying the brands will have none of the financial constraints that had faced their former owner.

Also, in a move to restore public confidence, it announced a $10 million consumer protection plan to cover its North American brands through 2004.

Travel Corp., which is based in the British Virgin Islands, scooped up four of the beleaguered Far&Wide divisions at auction Oct. 10, outbidding former owners who had hoped to reclaim their companies.

It bid a total of $10 million for African Travel, Lion World, Grand European Tours and Swain Australia Tours. The sales were expected to close Oct. 17.

Two other operators, High Country Passage and Pacific Bestours International also were sold during the auction.

All six units had maintained their operations since Far&Wide’s bankruptcy announcement Sept. 24.

The Kendall Group paid $225,000 for High Country. The group is headed by Don Kendall, chief executive officer of Affinity Expeditions, a marketing services firm based in Oakland, Calif.

Peter Yeung, a former owner of Pacific Bestours, paid $100,000 to regain the company.

An auction was scheduled Oct. 16 for IST Cultural Tours, Journeys Unlimited, Regina Tours, Tourlite and Adventure Center.

Far&Wide had 16 tour brands and negotiations were continuing last week on the remaining divisions, which include Central Holidays, Spanish Heritage Tours, Brian Moore International Tours, Prism Holidays as well as Intercontinental Travel, a destination management entity.

For Travel Corp., the acquisitions will significantly expand its U.S. portfolio, which already includes Trafalgar, Contiki Holidays, Insight Vacations and AAT Kings.

The acquisitions are “well-established, solid brands, which were, until recently, leaders in their markets,” said Gavin Tollman, a Travel Corp. director. “Supported by our infrastructure, we are confident that these businesses will be able quickly to re-establish their predominant positions in the industry.”

Tollman also said that the company’s immediate focus is to resolve client problems, and part of that effort is the new consumer protection plan, which is insured by a third party.

It will stand in addition to the standard $1 million bond that Travel Corp. has posted with the U.S. Tour Operators Association.

Phil Bakes, Far&Wide Corp. president, said the six sales will protect 94 percent of the money customers had paid to those brands and probably will ensure payment of the more than $8 million owned to the most senior secured creditor, Ableco Finance LLC, a subsidiary of Cerberus Capital Management.

Ableco attorneys initially objected to the sale of Far&Wide divisions, arguing for a Chapter 7 liquidation, but later they retreated.

“In short, we have been very successful at achieving the two goals we announced when we were forced to file the Chapter 11: to protect consumers and increase the recovery for the estate,” Bakes said.