The Iowa Bankruptcy
The bankruptcy of Thousand Adventures, Inc. is chugging along at a slow, but forward pace. The Trustee has settled a few adversary proceedings and has brought some money into the estate. Unfortunately, the majority of the TAI assets appear to be beyond the reach of the Trustee. There are a few remaining actions that may bring in some money into the estate. On a positive note, the bankruptcy judge ruled that the class of members are entitled to a Consumer Deposit Priority which will entitle the class to receive all the estate proceeds, after payment of the administrative expenses. This puts the members before the IRS. Counsel for the class, Douglas Napier, continues to monitor the bankruptcy to look for ways to benefit the members.
Class legal counsel and the Trustee for TAI reached a settlement with Princeton Capital Finance Company worth in excess of $1.4 million. The agreement provided that Princap would turn over real estate located in Oklahoma to the Trustee to sell, along with $200,000 cash. The settlement was approved by both the Bankruptcy Court and the Iowa District Court where the class action is pending. The Trustee has already received a confirmed offer to purchase part of the real estate (Red River Ranch) for $1.2 million. The Trustee is in the process of selling the real estate. There are some smaller, residential building lots located in Falconhead Resort, which will still be available for sale. The Members and the Trustee will equally share the proceeds from the sale until the administrative expenses in bankruptcy are paid and then the remaining proceeds will be paid into the Common Fund established for the members. Distribution to members will be determined at a later date.
Class legal counsel, Douglas Napier, has commenced an adversary proceeding against Travel America as part of the Iowa bankruptcy. Napier has asserted claims against Travel America involving the unlawful and fraudulent collection of dues. A motion to certify the class of members has been submitted to the court since March, but the court has not yet ruled on this motion. Hopefully, the class will be certified soon and class counsel can turn up the heat against Travel America. It is still class counsel's opinion that TAI members have no obligation to pay Travel America dues, unless they voluntarily and knowingly agree to become members of Travel America.
There have been various efforts by lenders to collect payments from members for retail installment contracts executed by members to purchase their memberships. Legal counsel for the class has had success in getting collection agencies to cease collection efforts. Once the collection agency is informed of the class action and the lawyers for the class inform the agency that they represent all members regarding these debts, the agencies have backed off. In some cases, refunds were obtained for members. Remember, if you have any doubts about whether you should pay. Contact Doug Napier BEFORE you pay. It is very difficult to get the money back once you mailed it. Also, if you are contacted by phone, insist that you be given written notice of their request. Send a copy of any correspondence to class counsel.
Case Against the Lenders — Get Ready to Prove your Claim
Because the prospects of getting any money from Thousand Adventures is looking bleak, Doug Napier has sought other ways to seek recovery for the members. Recently, Napier has expanded the class members lawsuit to include eighteen additional defendants. The defendants were lenders that took assignment of the retail installment contracts executed by members in conjunction with the purchase of their membership. These lenders actually received the monthly contract payments. Under a federal law, those contracts were required to include language which preserved the rights of the members to assert any claim they have against TAI against the lenders. Princap was one of these lenders who have now settled. Legal Counsel for the Class of Members is optimistic that more lenders will settle. Serious discussions are under way with three other defendants. Class counsel has reached a tentative agreement with one, subject to notice to the class members and court approval. The claims against the lenders may be limited only to those members whose contracts were assigned to that particular lender. In cases where the members cannot be identified specifically, the settlement proceeds will be paid into the Common Fund to be distributed to all members at a later date.
Speaking of distribution. Some of the settlements will require a claim process. Some members have filed proofs of claims in the Iowa bankruptcy and some have send copies of contracts to class counsel. But this may be insufficient to make a claim in the class action settlements. The lenders may require additional proof of payment on the retail installment contracts, including down payments to TAI. To be prepared, you may want to start collecting copies of cancelled checks, credit card statements, bank statements, or other evidence of payment on your membership contract. You will then have this handy if you are required to submit a claim.