Defunct travel group JG Worldwide is asking its creditors to
stand down while JG pursues its $65 million lawsuit against Virtuoso, asserting
that a potential verdict or settlement of the case represents its only
The company’s attorney, James J. DeCristofaro, confirmed the
strategy last week, noting that JG Worldwide and its principals, Jena Gardner
and James Saleh, decided to focus their limited resources on the lawsuit,
rather than on bankruptcy, as a way to reduce costs and to keep the matter
Federal bankruptcy cases, DeCristofaro said, operate “in a
“Everything is public,” he said. “Not that that is a bad thing.”
But he noted
that the Department of Justice oversees bankruptcies, and “they really are the
stewards of the creditors. It can be a slow process to resolve everything.”
Private resolution, he said, is “a lot cheaper … and a lot
quicker and more efficient.”
In July, facing mounting lawsuits and claims from former
partners, travelers, travel advisors, lending companies, former employees and
JG Worldwide’s landlord, Saleh filed a petition for Chapter 7 bankruptcy in
U.S. federal bankruptcy court in the Southern District of New York.
But after meeting with the trustee assigned to the case,
DeCristofaro said, Saleh decided to change course and seek private settlements
that would hinge on winning a verdict against, or settlement from, Virtuoso,
which JG Worldwide blames in court documents for destroying its reputation and
The claim against Virtuoso, DeCristofaro said, is JG
Worldwide’s only asset, and any monies that might be won as a result of the
lawsuit would be used to pay creditors.
In the lawsuit filed last month, JG Worldwide claims
Virtuoso’s decision last February to suspend two of the company’s luxury tour
operators, Heritage Tours and Revealed America, from the Virtuoso network and
publicly accuse the suppliers of “late commission payments, service issues and
nonresponsiveness” negatively impacted business.
The result, the suit claims, was “an immediate and
widespread decrease in call volume,” cancellations and financial losses.
Virtuoso has vowed to aggressively defend itself, calling
the accusations “baseless.” It also said that JG Worldwide was the party that
terminated the relationship after it and Virtuoso had begun working on a “corrective
plan” to address complaints from consortium members about Heritage and Revealed
DeCristofaro said the company might still end up in
bankruptcy, but for now it is seeking to work with creditors privately to
negotiate settlements that would be tied to the resolution of the Virtuoso
suit. To begin that process, he said, Saleh was sending a letter to creditors.
He declined to release the letter, but Travel Weekly
obtained a copy privately from one creditor.
The letter, signed by Gardner and Saleh, said the pair does
not admit the existence of any claims and cannot guarantee any outcome of its
case against Virtuoso. But they ask creditors to “refrain from commencing or
continuing any action against us” while they pursue the case.
In the letter, Saleh and Gardner also wrote, “We personally
and our companies have no resources to fight these cases, and, if we are forced
to defend them, it is only a matter of time before we will most likely wind up
in bankruptcy again; we are sure you would agree that given the enormous
expenses and potential time drain associated with bankruptcy preparation,
filing and administration, we are all better served consensually resolving
claims and other disputes out of court.”
Creditors and litigants reached by Travel Weekly declined to
DeCristofaro declined to say how many creditors the letter
was sent to or how much JG Worldwide owes, pointing only to the company’s
initial bankruptcy filing where it said it had up to $10 million in debts and
It listed about a half-dozen creditors whom it says it owes
more than $2 million.
Absent from that list, however, were many travelers and
local tour operators around the world who have claimed the company and its
subsidiaries owe them money.
The missing creditors include Morocco Private Travel, which
filed a lawsuit in New York Supreme Court claiming that 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, which in a separate lawsuit claims Heritage owes him more than $340,000.
Also missing are JG Worldwide’s former landlord in New York,
which has sued the company for $250,000 in unpaid rent, and a loan company in
Queens, N.Y., that says it is owed more than $500,000.
In addition, many more travelers, travel advisors, former
employees and suppliers around the world told Travel Weekly this summer they
were 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.
When asked how Virtuoso can be blamed for JG Worldwide’s
collapse when some of the allegations of missed payments — including a nearly $1 million
gross-mismanagement claim against Saleh by Marc Henry Borremans, who sold his
tour operator, Millennium Voyages, to JG Worldwide in 2017 — far
pre-date the company’s falling out with Virtuoso, DeCristofaro said, “Lawsuits
are just allegations, really. It just depends on the evidence.”
He also pointed to a plaintiff’s exhibit filed with the
lawsuit that claims to represent a March 2017 offer from Certares Management
to buy the company for $43 million. Certares is the owner of Travel Leaders
Group and a shareholder of American Express Global Business Travel.
“These guys were cooking,” he said of Gardner and Saleh. “They
declined the offer because they were on a growth trend, and their revenues
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