Court: Agent pay not Renaissance 'property'

FORT LAUDERDALE -- ASTA scored a partial victory in the long-running battle over attempts by the estate of Renaissance Cruises to recall agent commissions for canceled cruises when the bankruptcy court here ruled that the commissions are not the "property" of the estate.

But that doesn't mean agents can keep the funds. As ASTA has framed the issues in the court proceeding, the trustee is relying on four different legal arguments to support the commission recalls.

The decision knocked out only one of them, related to a provision in bankruptcy law that persons holding property of or owing a debt to the estate must turn it over to the trustee.

ASTA, on behalf of Accent on Travel in Towson, Md., argued that these provisions of bankruptcy code do not apply to commissions that have been paid, and the court agreed.

Still to be determined, however, is whether the trustee is entitled to reclaim the commissions on other grounds.

A key question is whether Renaissance received something of "equivalent value" for the commissions. ASTA argued that Renaissance received the passengers' funds and paid the commission in a "quid pro quo."

That the line later canceled the cruise is irrelevant to the validity of the transactions, ASTA said.

As to the question of "unjust enrichment," ASTA said the concept doesn't apply because the agency received "exactly what it was entitled to receive" as an agent of Renaissance.

The court ruled, however, that there are unresolved factual issues relating to those arguments that require further proceedings.

ASTA, for example, has cited case law to the effect that a broker's commission is earned when it brings the buyer and seller together, even if the buyer and seller fail to consummate their transaction.

But the trustee has asserted that it is standard industry practice that "a commission is not earned until the ship sails."

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