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Renaissance to Agents: Return Commissions
By Kevin Brass
Jerry Vaclav says bankrupt Renaissance Cruises will have to go to court if it wants him to return a commission he believes he earned in good faith.
"I would rather spend the money on attorney fees than return it," said Vaclav, owner of J&K Travel in Austin, Texas.
Vaclav's response is typical of agents who received a notice demanding the return of commissions paid for trips that went unused when the Fort Lauderdale-based cruise line filed for bankruptcy protection last September.
"I'm mad," said Trish Hebert of Guinea Travel in Austin. Her client is out $12,000 from a Renaissance booking with little chance to recoup it. Since none of Renaissance's ships used U.S. ports, the company was not required to follow U.S. maritime bonding requirements.
"If they paid back my client the $12,000 he lost, I'd gladly give back my commission," Hebert said.
ASTA, OSSN and others are advising agents not to comply with the demand from the attorneys representing Renaissance's unsecured creditors. Last week, ASTA developed a form letter for members to send to the Renaissance attorneys.
In a memo to members last week, ASTA noted, "Agents who are especially concerned about having legal proceedings brought against their agencies may wish to comply." But it advised all others to wait and see how the legal debate plays out.
The attorney representing the unsecured creditors could not be reached for comment.
The demand for the return of commissions is reminiscent of the Eastern Airlines bankruptcy, when, in fact, the courts forced some agencies to return commissions on unused tickets. But the airline regulations at the time said commissions were not earned until passengers flew, which is not the case under maritime agreements, according to attorney Alexander Anolik.
"The bankruptcy code creates the presumption of reimbursement, which is rebutted by showing the commissions were earned," said Anolik, who works with ARTA and OSSN.
Anolik said he has been contacted by about 20 agents who received notices. He said, "I believe they earned the commissions, and possession is nine-tenths of the law."
Gary Fee, OSSN president, is advising members to contact the group's legal department or "wait before responding and see what happens with other sellers."
If the unsecured creditors want to pursue the fees, they'll eventually have to take at least one agent to court and have a judge decide the legal issues, experts say.
Adding a bitter edge to the conflict, Fee and others were reminded that Renaissance actively courted agents before declaring bankruptcy after years of refusing to deal with the industry. The commission recall "suggests they are trying to use agents as scapegoats again," Fee said.
One agent told ARTA that returning the commission was a moot point, because his commission check from Renaissance bounced.
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