Monday, 19 July 2010

All that Glitters is not Goldtrail


Goldtrail went into administration on Friday, July 16th 2010. It was the biggest independent tour operator to Turkey and was allegedly worth £35 million. It also operated flights and holidays in Greece. Although it took as many as 250,000 people to the Southern cost of Turkey in one summer, problems with customer dissatisfaction as a result of "grotty accommodation and poor service" had been in the limelight for a while now. In 2008, the company paid out £120,000 to nine customers who had allegedly contracted legionnaire’s disease from the shower of their hotel. Then there were also complaints of people contracting salmonella and E.coli. The Association of British Travel Agents (ABTA) fined the company £11,000 that year. Unsurprisingly, the company has now left about 16,000 customers stranded in Turkey and Greece in its wake.


It is uncertain whether Goldtrail’s management showed any regard for the interests of these customers, who today are creditors, many of whom may have to wait for about two years in order to be refunded. Surely, if the company’s management had kept proper books of account then they “knew, or ought to have concluded that there was no reasonable prospect of avoiding insolvent liquidation” (section 214 of the Insolvency Act 1986). However, customers were booked a fortnight ago and about 2,000 customers were due to travel last weekend. Given all their problems, there is no doubt that a “reasonably diligent” manager would have known that the company could not continue to trade and had to be put into liquidation. It would be interesting to see the liquidator’s report on the conduct of the managers because this case has got “wrongful trading” written all over it.

Picture credit: http://www.abta.com/home

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