Vantage Travel’s plan draws objections from committee, trustee

By Sarah Lizee

Olympia, Wash., Nov. 7 – Vantage Travel Services, Inc.’s Chapter 11 plan of liquidation and disclosure statement drew objections from the official committee of unsecured creditors and U.S. trustee overseeing the case, according to documents filed Tuesday with the U.S. Bankruptcy Court for the District of Massachusetts.

The committee cited “troubling process integrity issues” resulting from the conduct of owner and lender Henry R. Lewis and his trust.

The committee said these issues prevent approval of the disclosure statement on a final basis and confirmation of the plan due to a “secret, undisclosed condition” Lewis has placed on his willingness to provide funding to a creditor trust.

The committee said Lewis mandated the selection of a specific individual to serve as creditor trustee, and while such a selection is customarily within the province of the committee, the committee considered the proposed trustee and had been prepared to agree to his selection.

However, a few hours before a hearing on Oct. 3 to conditionally approve the disclosure statement, the committee said it learned that there had been a “secret meeting” between Lewis, the debtor and the proposed trustee at which Lewis imposed a limitation on who the proposed trustee could select as counsel as a condition to Lewis’ consent to plan funding.

“This was not disclosed to creditors and is contrary to the proposed trustee’s prior statements to the committee,” the group said in the objection.

“It caused the committee to lose confidence in the proposed trustee.”

The committee is now proposing that an individual with no known connections to Lewis be appointed as trustee. But Lewis continues to hold the view that he has the right to select the party that will investigate him and to limit selection of that person’s counsel as a condition to plan funding, the committee said.

“Presumably this is based upon the golden rule: He who has the gold makes the rule,” the committee said.

Meanwhile, the U.S. trustee said the plan should be denied because it defers resolution of the committee challenge rights and estate causes of action transferred to the creditor trust until after the effective date.

He also took issue with the plan’s treatment of class 6 general unsecured claims.

The plan provides that all of the estate’s assets will be liquidated for the benefit of the only class 1 creditor, the prepetition lender, subject to the committee challenge rights and estate causes of action. The prepetition lender will be paid its adequate protection claim on the effective date.

Customer claims totaling about $108 million, non-customer claims totaling about $28 million and the prepetition lender’s deficiency claim totaling about $25 million are lumped together in class 6.

But the plan provides separate treatment for class 6 creditors depending on whether they hold customer claims, which is in violation of the bankruptcy code, the U.S. trustee said.

The combined hearing on final approval of the disclosure statement and confirmation of the plan is scheduled for Nov. 13.

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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