JG Worldwide, the New York public relations and travel
company accused of bilking travelers, business partners and employees out of
millions of dollars, has filed for Chapter 7 bankruptcy.
In its initial filing on July 24 in the federal bankruptcy
court for the Southern District of New York, the company, which is the parent
to Heritage Tours and Revealed America among others, said it has up to $10 million in debts and no assets to pay creditors.
It lists about a half-dozen creditors whom it says it owes
more than $2 million, including the former owners of the Mercury advertising
agency it bought in Bozeman, Mont., last year. Mercury won a judgment against
JG Worldwide on the same day JG worldwide filed for Chapter 7 bankruptcy.
(Chapter 7 bankruptcy is a liquidation
of all of a company's nonexempt assets.) The former Mercury owners are now
among a half-dozen creditors listed in the bankruptcy filing.
Absent from the company's list of creditors, however, are
the many travelers and local tour operators around the world who say the
company and its subsidiaries owe them money. Among them are Morocco Private
Travel, which has sued, claiming Heritage owes it more than $1.2 million for
travel services and another $200,000 for lost revenue on hotel bookings, and
African tour operator Steve Turner of Origins Safaris of Kenya, who has filed
suit alleging that Heritage owes him more than $340,000.
Also not listed among creditors is traveler Sigmund Anderson of San Francisco,
who has filed a lawsuit against the company in Connecticut, where JG Worldwide principals Jena Gardner and
James Saleh live, over a $300,000 family safari he booked last fall with Heritage. He
said he made a $77,535 deposit in September, then paid the balance in March.
But a month before his planned June departure, he alleges in the suit, the
ground operator contacted him to say the trip had been canceled for nonpayment.
A half-dozen lawsuits have been filed against JG Worldwide
and Gardner and Saleh, alleging a pattern of fraud that has bilked
travelers and business partners around the globe.
Many more travelers,
travel advisors, former employees and suppliers around the world have told
Travel Weekly they are in the process of preparing lawsuits or formal
complaints with state attorneys general for unpaid travel, commissions,
expenses, medical insurance, retirement plans and various other debts.
Among them is Adel Mzil, managing director of All Morocco
Travel, who said he is owed a half-million dollars for travel services
contracted through Heritage Tours. Unable to reimburse his suppliers, Mzil
recently told Travel Weekly that he fears he will end up in jail.
"They ruined my life," he said of Gardner and
Mzil traveled to New York earlier this month to meet with
Saleh. But he said Saleh failed to show up, and he found Heritage Tours'
Manhattan offices closed.
"He sent me a quick text telling me, 'Sorry I couldn't
meet you. There are many things going on. Trying hard to resolve the situation.
I'm risking everything I have,'" Mzil said.
"It's pure lies," he added, recalling that he told
Saleh his suppliers were after him.
"They all want a piece of me," Mzil said of his
suppliers. "I told him, 'You ruined my business. You destroyed my life. I
am about to go back to Morocco without a penny in my pocket. ... I told him, 'You
put me in a situation where I am going to jail. I don't know how much time I
will be free in this country.'"
Also not listed among the creditors were the many travelers
who say they are owed refunds for trips that were paid in full but then
cancelled or never booked, the many travel agents who say they are owed tens of
thousands of dollars in commissions, former employees and a former business
partner who says he is owed nearly $1.5 million.
Numerous travelers and travel advisors have stepped forward
in recent weeks to relay tales of booking trips through JG Worldwide's luxury
tour operators, Heritage Tours and Reveal America. In some cases, clients have
shown up at destinations to find that their hotels and tours had never been paid
for. Others were contacted before their departures by local suppliers to say
their bookings had been canceled for nonpayment by Heritage or Reveal.
At the same time, several former JG Worldwide employees who
spoke on condition that they not be named said former workers are owed tens of
thousands of dollars in back pay and expenses. They also said the staff's
health insurance was canceled for nonpayment, even though premiums had been
deducted from paychecks, and that 401(k) deductions had not always been
deposited into retirement accounts.
They said Gardner previously ran a well-respected company
that promoted hotels and destinations to the travel trade and the media. Many
of the problems began when she brought in Saleh as CFO, the
former workers said. After that, expenses routinely went unpaid, with young
workers having to rack up thousands, sometimes tens of thousands of dollars in
debt on their credit cards. To be fully reimbursed, the employees usually had
to leave the company, creating a revolving-door atmosphere.
"There was a lot of smoke and mirrors," one former
The former owners of two companies purchased by JG Worldwide
are suing the company in New York Supreme Court, claiming that Gardner and
Saleh failed to make good on the purchase agreements.
In his suit, Marc Henry Borremans, who sold his tour
operator, Millennium Voyages, to JG Worldwide in 2017, alleges that the company
not only breached its purchase agreement but also fraudulently transferred
assets from Millennium Voyages to JG Worldwide while running up nearly a
half-million dollars in debt on company credit cards for which Borremans
Borremans said he is still owed almost $1 million for the
initial purchase as well as royalties and the balance, interest and fees on the
company credit cards that, according to the suit, Saleh had insisted Borremans
keep open under the initial purchase agreement.
Soon after taking over, and while Borremans was still
employed at the company he founded, Saleh maxed out the cards, the suit
According to the lawsuit, Saleh continued his profligate
spending "despite Borremans' numerous pleas that his hard-earned credit
score was plummeting and his financial security was being irreparably harmed.
Indeed, [Borremans] can no longer obtain a loan for any meaningful purchase."
Borremans further alleges that Saleh "mocked him in
response, telling Borremans to 'quit whining' and to 'put on his big boy
The suit alleges that Saleh transferred $1.2 million from Millennium's
bank accounts into JG Worldwide accounts, adding, "These transfers had no
legitimate business purpose other than to loot Millennium and prop up JG
Worldwide, which was struggling financially."
As a result, the suit charges, Millennium "quickly spiraled
into financial ruin."
Two other lawsuits were filed against JG Worldwide in New
York in the past year, one by two travelers in a dispute over whether they were
entitled to reimbursement for a canceled trip, the other by American Express
seeking more than $430,000 in unpaid balances on company credit cards.
Senior editor Christina Jelski contributed to this report.