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 Saleh.

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 worker said.

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 remains liable.

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 alleges.

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 panties.'"

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.
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Senior editor Christina Jelski contributed to this report.

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