Amid much controversy, the Mayfield Village, Ohio Company called Discovery Tours Inc. filed for Chapter 7 liquidation bankruptcy with the U.S. Bankruptcy Court in the Northern District of Ohio. In its bankruptcy petition, Discovery Tours claimed both assets and liabilities in the $1,000,0001 to $10 million range. Not your typical bankruptcy proceedings, the company is being sued by the Ohio Attorney General’s Office for failing to complete pre-paid field trips for thousands of students.
How Discovery Tours Went Bankrupt
It’s estimated that Discovery Tours held about $1.4 million in assets with more than $3.9 million in debt. Additionally, the company reports losing over $1 million per year despite grossing nearly $3 million this year alone. In May of 2018, the company closed its doors after being in business for over 36 years and immediately filed for Chapter 7 bankruptcy. In June, the company had its 341 meeting of creditors.
Ohio Bankruptcy Controversy
Discovery Tours abruptly canceled many summer trips for students, including a Washington D.C. trip for nearly 500 students from Mentor, Ohio. The Bankruptcy Trustee assigned to the bankruptcy case, Waldemar Wojcik, said that the process of finding out what the company owns in assets and who is owed how much could take as long as two years. Notwithstanding, the Attorney General for Ohio says they have received well over 700 complaints about the company since the beginning of May from parents claiming to have lost their deposit with no way of recouping their money.
Adding to the dilemma for the company owners, documents filed with bankruptcy courts show substantial payments were made to family member-owners to the tune of more than $200,000 as loan repayments.
Officials representing Discovery tour made their first appearance about three weeks ago in an attempt to answer questions about deposit money for trips that never took place. According to social media banter, the owners of the company have already started another LLC, facilitating the same field trip services as Discovery Tours.
If your student trip has been affected by the Ohio bankruptcy of Discovery Tours, you may still be able to receive a refund from your bank. If your student’s school paid for the trip, then they will be listed among the creditor’s owed money in the company’s bankruptcy case.