Vantage Travel: U.S. trustee eyes Chapter 11 trustee or conversion

By Sarah Lizee

Olympia, Wash., Aug. 1 – The U.S. trustee overseeing Vantage Travel Services, Inc.’s bankruptcy case is seeking appointment of a Chapter 11 trustee or conversion of the case to Chapter 7, according to a motion filed Monday with the U.S. Bankruptcy Court for the District of Massachusetts.

Region 1 U.S. trustee William K. Harrington said the company’s entire sale and financing process has been rushed and arranged in a way that only benefits Henry Lewis, the company’s sole stockholder and largest secured creditor.

Harrington said the debtor and its management have irreconcilable conflicts in seeking the court’s approval of an all-asset sale and post-petition financing that exclusively benefit Lewis, on unreasonably short notice, without relevant and necessary disclosures of his prepetition transactions with the debtor, affiliates, including the ship-owning affiliates, and related trusts that he controls.

Currently, the company is set to sell substantially all of its assets to United Travel Pte. Ltd., an affiliate of Nordic Hamburg and Heritage Expeditions, for $1 million, consisting of a $750,000 credit bid for funds advanced under a debtor-in-possession facility and $250,000 in cash, plus a percentage of possible future sales derived from the debtor’s customers.

The sale is set to close by Aug. 11. After that, the debtor intends to dismiss its case.

“The sale will benefit only Mr. Lewis, because he alone will be entitled to receive the net proceeds under his pre-petition all asset lien. Prepetition creditors will receive nothing,” Harrington said in the motion.

“And if this court approves the final financing order as presented by the debtor, Mr. Lewis will be released, outside of a plan, from all pre-petition claims, subject to limited challenge by a committee that must request and obtain standing, but not a subsequently appointed trustee.”

The U.S. trustee also said the consideration to be paid by United appears to be worth far less than the assets it is purchasing from the debtor.

Harrington said the case needs the immediate intervention of either a Chapter 11 or Chapter 7 trustee to resolve the conflicts of interest presented by the debtor and its management.

Vantage is a Boston-based river cruise, small ship cruise and escorted land tour operator. The company filed bankruptcy on June 29 under Chapter 11 case number 23-11060.

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