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TCF ghosts stir as liquidators work on failed travel firm

February 8, 2019 Headline News No Comments Email Email

Liquidators of Queensland-based over-50s specialist travel agency All Your Travel Pty Ltd, trading as Travel Team over 50s, estimate creditors may be owed as much as AUD 1.4 million. One of the liquidators made a perceptive comment.

“It does seem strange that the compensation schemes were disbanded and there’s no longer a requirement to hold trust accounts,” joint liquidator Bill Cotter, of Robson Cotter Insolvency Group, said yesterday.

At a general meeting of the members of All Your Travel Pty Ltd, held on 23 January 2019, it was resolved that the company be wound up and that Bill Cotter and William Roland Robson be appointed liquidators.https://join.travelmanagers.com.au/benefits/earn-more/

Cotter said yesterday over 100 travel customer bookings were affected. At present it seemed “travel customer type creditors” were owed in the vicinity of AUD 500,000 to AUD 600,000. Potentially another AUD 300,000 was owed to trade creditors and the like. Substantial “other party” creditors included directors who had put money in over the period concerned. And, of course, there’s money owed to the Australian Tax Office.

The sum owed looked like about AUD 1.4 million, but the total was “very flexible”.

As for clients left out of pocket, each one was a “slightly different kettle of fish”, Cotter said, depending on whether they had paid a deposit and if so, how much; and how much of their deposit had been passed on to different travel wholesalers that might have been involved.

“We have sent them information about what their options are to try to work out the best course of action.”

The prime options for creditors, as outlined by Cotter, are:

  1. To inquire with the wholesalers involved (whether it’s a cruise company or a travel group) that might have received a fund deposited with All Your Travel, that could still be utilised by the creditor. This depends whether the money was passed on.
  1. To check travel insurance details to see whether there’s any coverage under the travel insurance that the consumers have – if they held insurance.
  1. To look at the method of payment of any monies the creditors have paid to the company. Cotter said that for clients who paid by credit card, the “potential right” exists to approach the finance company and obtain a chargeback. But it is not certain. “You have to approach your credit card company or banking institution.”

If none of those three options apply, “the fourth and sadder option” is to place proof of debt into the liquidation process and become a creditor in liquidation.

What will come out of the liquidation is still to be determined, Cotter said.

He declined to comment on whether the now-defunct Travel Compensation Fund might have helped prevent the collapse, saying he didn’t have enough recent knowledge of other insolvencies.

“There have been a few [insolvencies] recently. It does seem strange that the compensation schemes were disbanded and there’s no longer a requirement to hold trust accounts,” he noted.

Whether or not the TCF would have helped prevent the collapse, it would certainly have made it easier for travel customers left out of pocket to obtain compensation.

Written by Peter Needham

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