Vantage Travel’s proposed sale terms draw objection from JPMorgan

By Sarah Lizee

Olympia, Wash., Aug. 3 – Vantage Travel Services, Inc.’s proposed asset sale to United Travel Pte. Ltd. drew an objection from secured lender JPMorgan Chase Bank, NA, according to documents filed Thursday with the U.S. Bankruptcy Court for the District of Massachusetts.

Specifically, the secured lender objects to the sale of the alleged “customer trust funds.”

JPMorgan said the sale and proposed distribution of those funds from the debtor to the purchaser and from the purchaser to a small subset of preferred unsecured creditors of the debtor constitutes an impermissible sub rosa plan in violation of the absolute priority rule and the rights of senior creditors and other unsecured creditors.

“Through the sale motion, the debtor is seeking to sell substantially all of its assets, including the customer trust funds, to the purchaser free and clear of [JPMorgan’s] liens and setoff rights,” the lender said in its objection.

“If the debtor is permitted to do so, [JPMorgan] will be converted from a secured creditor as of commencement of the case to one of the debtor’s largest unsecured creditors following the sale.”

The lender said the result will be that certain customers that are general unsecured creditors of the debtor will receive a full refund of the amounts owed by the debtor from JPMorgan through an Automated Clearing House chargeback process under applicable National Automated Clearing House Association rules.

“Other general unsecured creditors that are favored by the debtor and the purchaser will receive a full refund of the amounts owed by the debtor through the sub rosa sale; and [JPMorgan] – a secured creditor as of commencement of the case – is stripped of potentially its only source of recovery,” the lender said.

“This is not a fair, reasonable, or equitable result for [JPMorgan] nor for any of the other secured, administrative, priority, and non-favored general unsecured creditors that might have had a chance of recovery were it not for the sale of the customer trust funds to the purchaser.”

As previously reported, United Travel, an affiliate of Nordic Hamburg and Heritage Expeditions, is set to purchase the assets 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.

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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