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More Ahead for Suntrips

More Ahead for Suntrips
Originally Posted: www.travelagewest.com/articles.aspx?article=4905
June 26, 2006


 

Two travel agencies sued SunTrips and its parent corporation, seeking restitution of unpaid commissions on behalf of all agencies and to stop the sale of the tour business until agency commissions are secured.

The plaintiff agencies are Community World Travel of Denver and Four Winds Travel of Carmel, Calif. Four Winds owner Daniel Presser is an ARTA board member. Defendants are SunTrips, based in San Jose, Calif., and its owner OneTravel Holdings.

The class action was filed in California Superior Court after OneTravel announced it had agreed to sell SunTrips to Crystal Hospitality Holdings.

Attorney for the plaintiffs, Al Anolik, said millions in commissions are due, and he said the plaintiffs seek to block the sale of SunTrips because the terms of that sale to Crystal, while itemizing various debt obligations, make no mention of the large outstanding debt to the trade.

Anolik said the court has set a March 14 date for a hearing on his request for a preliminary injunction to prohibit OneTravel from transferring any SunTrips assets to another party. The proposed injunction would also require the defendants to “account for and hold in trust amounts received in connection with the sale of SunTrips,” according to court documents.

The plaintiffs alleged in court filings that SunTrips has failed to pay agency commissions for at least the past year despite the continued publication of commission rates on its Web site. The plaintiffs accused SunTrips and its parent of fraud because it misrepresented its intentions; the plaintiffs demanded full restitution plus damages.

Victor Bao, president and CEO of Valorem Group North America, speaking to TAW before the suit was filed, said: “We’re not sure exactly what happened over the past year. But Crystal Hospitality is going to pay 100 percent of the commissions and start paying them immediately.”

Miami-based Valorem — a hotel representation, communications and marketing firm of international hospitality clients in the U.S. market — created Crystal Hospitality Holdings for the purpose of buying SunTrips.

Bao also said that plans call for SunTrips to be repositioned by changing the mix of hotels offered; adding a few gateways; possibly adding a company office in Florida; and adding more destinations, including possibly Panama.

Overall, however, Bao said that much about the tour operator will remain the same, including the company’s name and employees.

“A lot of time with travel agents is what we’re really looking forward to,” Bao added.

For the past few months, travel agents have been contacting TAW reporting that SunTrips has continued to delay payments on agent commissions and that hotels have refused or canceled SunTrips’ reservations.