Far & Wide Info

FAR & WIDE QUESTIONS AND ANSWERS

FAR & WIDE TRAVEL CORP. BANKRUPTCY UPDATE

USTOA has been receiving questions about the Assignment of Claims form dated January 14, 2004, and the coming distribution from the USTOA $1 Million Consumer Protection Plan. We hope the following will answer your questions and clarify procedure to date.

USTOA’s Distribution from the USTOA $1 Million Consumer Protection Plan

USTOA is a voluntary trade association and Far&Wide Travel Corporation was an Active Member of USTOA. As an Active member Far&Wide participated in the $1 Million Consumer Protection Plan which required that it provide an approved security in the amount of $1 million dollars. USTOA is not an insurance company. USTOA merely administers the distribution of the million to consumers under the Plan. By the end of March 2004, USTOA expects to distribute the $1 million posted by Far&Wide to all eligible claimants whose claims reached USTOA by December 31, 2003. This will take place separately from any action in the bankruptcy court. The timing of this disbursement from the Plan will not be affected by the signing or not signing of the Assignment form on the part of eligible Plan claimants.

Assignment of Claims Letter from USTOA dated January 14, 2004

USTOA, though Genovese, Joblove, & Battista, a Miami law firm, will petition in the bankruptcy court in an attempt to enable consumers to receive a distribution from the funds raised by the sales of Far&Wide’s assets which would otherwise go to secured creditors. Should this be successful, USTOA would then be awarded a sum and USTOA would then make a second disbursement to the consumers who filed an “Assignment of Claims” form. To carry out this court action, USTOA is required to receive an “Assignment of Claim” form from each traveler who elects to assign his claim to USTOA as soon as possible.

PLEASE NOTE :
February 20, 2004, is the deadline for USTOA to receive Assignment of Claim forms.

FILLING OUT AND SENDING IN THE ASSIGNMENT FORMS

A form needs to be filled out for each traveler (husband and wife need to fill out separate forms). The number on the bottom left of the Assignment form incorporates the USTOA claim number (up to four digits) and the Far&Wide booking number (six digits). Everyone booked under the booking number needs to send in an Assignment form. “Name of claimant” should be the name of the person who filed a claim with USTOA and/or the bankruptcy court. If the trip was a gift, you may indicate the name of the traveler who was to have received the gift. USTOA mailed you one Assignment form; please make additional copies as needed. Travel agents who submitted a Travel Agent Claim form on behalf of their clients see Question #5.

Q. Why should you join the USTOA litigation in Bankruptcy Court against Far & Wide?

A. A consumer’s individual claim in the Bankruptcy Court falls behind claims of secured creditors which total in excess of $100,000,000. The assets available for all creditors total approximately $10,000,000. Consequently, unless a case is brought in the Bankruptcy Court to change the priority schedule or find other theories for recovery, consumers will receive nothing from the Bankruptcy Court. USTOA has hired bankruptcy lawyers in Miami to commence a litigation on behalf of consumers in an effort to advance the consumers’ claims ahead of secured creditors. USTOA believes that compelling arguments can be made in favor of consumers, but unless they are brought to the Court’s attention and then proven to the Court, merely filing a claim will not result in a recovery. If a case on behalf of consumers is not brought in the Bankruptcy Court, the secured creditors will get all the assets and there will be virtually no chance of any recovery for a consumer.

Q. How are the bankruptcy lawyers being paid?

A. USTOA has negotiated a fee arrangement with bankruptcy counsel. The fee agreement includes a reduced rate for the lawyers’ hourly fee up to a maximum of $75,000 which USTOA will pay on behalf of consumers. The bankruptcy lawyers will also receive a 25% contingency fee which they will only receive out of any recovery. Consumers will not be charged for any legal fees. If the case is successful the bankruptcy lawyers will receive 25% of the recovery and USTOA will be reimbursed the fees it paid which sums may be deducted before the consumer is paid his or her share of the recovery.

Q. What amounts are set off against a consumer’s claim and why?

A. Each consumer is entitled to claim only the amount of his or her unreimbursed loss. Thus, any amounts that a consumer has already received must be subtracted from his or her claim. This is required in order to avoid a double recovery by consumers who have already been partially reimbursed for their losses.

Q. How is the distribution from the USTOA $1 Million Consumer Protection Plan Affected by an Assignment of Claim?

A. Consumers’ distributions from the USTOA $1 Million Consumer Protection Plan is separate from the litigation in the Bankruptcy Court. Consumers should receive their share of the USTOA $1 Million Consumer Protection Plan by the end of March 2004 regardless of the Assignment or the results of the litigation. As explained in the above answer, a consumers’ claim in the Bankruptcy Court will be reduced by the amount he or she receives from the USTOA $1 Million Consumer Protection Plan.

Q. Are travel agents entitled to join the USTOA litigation?

A. Yes. Travel agents who have suffered losses on account of reimbursing their clients’ deposits are entitled to join the USTOA litigation and should return the Assignment of Claim form. However, to be eligible a travel agent must have received an assignment of their clients’ claims against Far & Wide and must confirm this fact to USTOA. One way of making such confirmation to USTOA would be to attach a separate statement to the Assignment of Claim form certifying that the travel agent’s clients have assigned their claims against Far & Wide to the travel agent.

MISCELLANEOUS QUESTIONS

Assignment Form page 1, item (b) asserting a non-priority unsecured claim for the repayment of funds in excess of $2,100 – we have been asked if there should be a statute number here as there is in item (a) and as travelers see on the form they received from the bankruptcy court.

No, there is nothing missing.