Attorneys for Joystar and Carnival Corp. on Monday took the first steps in a bankruptcy court hearing to temporarily address Carnival’s concerns about what happens to commissions sent to a host agency facing possible Chapter 7 liquidation.
Carnival Corp. and two subsidiaries, Holland America Line and Princess Cruises, asked the U.S. Bankruptcy Court in Fort Lauderdale for permission to move independent contractors’ Joystar bookings to other host agencies, pay commissions to the new agencies and withhold other payments to Joystar pending developments in court. Alternatively, Carnival said it would place withheld commissions into an escrow account at the court’s request.
Carnival said it had to seek permission to take such steps because creditors have petitioned to place Joystar into involuntary bankruptcy, a step that produced an automatic stay on actions that could be seen as interfering with Joystar’s business and potential right to income.
At a court hearing today, attorneys for Carnival and Joystar drafted tentative terms for a short-term fix, details of which are expected within a few days, said Patrick Dorsey, law clerk for Judge Raymond Ray.
A hearing on this issue was set for Feb. 10 at which a longer-term solution will be addressed.
As for the bankruptcy proceeding itself, Joystar sought a delay until Feb. 11 for responding to creditors’ attempts to liquidate the company. According to Dorsey, if Joystar does not consent to Chapter 7 liquidation, Judge Ray will set a trial on the issues, probably in early February. In setting the trial date, the judge would give Joystar a new deadline for responding to the petitioners’ filing, Dorsey said.
Initially, 15 agents claiming $150,000 in unpaid commissions filed for the involuntary bankruptcy. Last week, another 19 joined the roster of petitioners.
