MIAMI -- Seeking at least $5 million on behalf of some 1,200
consumers and travel agents for their losses resulting from the Far
& Wide Travel Corp. bankruptcy, the U.S. Tour Operators
Association sued the only creditor to receive a court award.
The USTOA charged that Ableco Finance "aided and
abetted...breaches of fiduciary duties" by Far & Wide after
Ableco loaned the tour operator $10 million in late 2002 and became
its senior secured creditor. Failure to disclose "material
information," the USTOA alleged, amounted to "negligent
misrepresentation."
Ableco was the only creditor to obtain a complete settlement of
its claims in bankruptcy court proceedings here that began in
September. With the Far & Wide sale of assets nearly complete,
there appeared to be enough cash to pay only Ableco and attorneys'
fees.
The Ableco loan, according to the USTOA suit, "provided
substantial assistance" that enabled Far & Wide to continue
offering future trips without disclosing its "substantially
impaired and insolvent financial condition."
The loan documents contained terms that "expressly provided"
they remain confidential per agreement of the parties, indicating
that Ableco "understood the importance of ensuring that the true
impaired financial condition of [Far & Wide]...remain hidden
from the consumers remitting deposits," the suit alleged.