Far&Wide Fate Tested At Auction

The first wave of Far&Wide’s 16 tour operations went to auction late last week, as new bids came in for more pieces of the bankrupt company.

By: Lisa Jennings

The first wave of Far&Wide’s 16 tour operations went to auction late last week, as new bids came in for more pieces of the bankrupt company.

A number of buyers were expected to battle over six of the tour operations at the Oct. 10 hearing in U.S. Bankruptcy Court in Miami, which was scheduled to decide the futures of High Country Passage, Grand European Tours, Pacific Bestours, Swain Tours, African Travel and Lion World.

This week another auction is likely to be held regarding the proposed sale of IST Cultural Tours, Regina Tours, Journeys Unlimited, Tourlite and Adventure Center.

Calling Far&Wide “a major financial disaster,” Bankruptcy Court Judge Robert Mark said he would expedite sales procedures, acknowledging that the tour operations must keep operating to maintain their value.

With the exception of Tourlite, which company officials say will resume operations after an approved sale, all the units under negotiation last week had continued operations since the Sept. 24 bankruptcy at the expense of their potential buyers. It was unclear last week whether the remaining four units Prism Holidays, Central Holidays, Brian Moore International Tours and Spanish Heritage Tours were operating as negotiations to find buyers for them continued.

Meanwhile, consumers have begun to file insurance claims. Officials at insurance company Travel Guard said an estimated 400 claims had been filed as of Oct. 7, and many more were expected.

Far&Wide offered its own “Safe and Sound” protection plan, but that policy did not cover financial default, said Dan McGinnity, vice president for communications for Travel Guard, a Wisconsin-based insurance company that administered Far&Wide’s plan.

But third-party travel insurance, such as Travel Guard’s “ProtectAssist” and “Cruise Tour and Travel” policies, do tend to cover cancellations due to financial default.

The case is likely to create a clearer distinction between supplier policies and third-party insurance, he said. Though third-party insurance is more expensive, many agents recommend it to their clients as being more comprehensive.

In California, where a restitution fund compensates consumers that have lost money to sellers of travel, only two Far&Wide companies are thought to be covered: Journeys Unlimited and Peter Voll & Associates.

Those companies had joined the fund before their purchase by Far&Wide and their individual memberships had not expired. The other tour operators, however, were registered with the state through Far&Wide, as their parent company.

As of last week, no claims had been filed, but Antoine Georges, the California Travel Consumer Restitution Fund president, said he plans to pursue criminal charges against Far&Wide officials for violating state consumer protection laws. And Georges said he was working with state lawmakers to establish a cap on company claims payments to prevent the restitution fund from being drained by Far&Wide claims.

As of Oct. 8, 150 claims had been filed with the U.S. Tour Operators Association, which has a $1 million Consumer Protection Plan.

Claims must be filed before Dec. 31.

Hank Phillips, president of the National Tour Association, said the association’s $200,000 consumer protection plan does not apply to Far&Wide. The fund specifies that companies must file for bankruptcy in their entirety.

Far&Wide had foreign subsidiaries, such as Lion World, that were not included in the bankruptcy filing, so the terms of the plan have not been met.