Bankrupt Canadian Tech Firm Owes $6 Million to Agencies, Other Creditors

Travel Success Group, a Mississauga, Ontario-based company that provided technology services to travel agencies, was forced into involuntary bankruptcy by its creditors, who collectively are owed more than CAD 6.6 million (USD  6.22 million).

The privately held company was placed in receivership on Aug. 12, and RSM Richter Inc. in Montreal was appointed trustee.

TSG, which has been doing business as Convergentware Travel Technologies Inc. since 2007, provided GDS connectivity, an Internet booking engine, multisource front ends and other technology products and services.

Aiming for Business Continuity

The sale of the assets of the company to Wizie.com, a travel technology company based in Farmington Hills, Mich., was approved by the bankruptcy court on Aug. 24. RSM Richter said the parties were striving for a smooth transition with no disruption to services.

Wizie.com has assured Travelport, whose Galileo GDS is Canada’s largest, “that it is committed to ensure business continuity and no service interruption for all of Travel Success Group/Convergentware’s affiliated agencies,” Travelport said.

Travelport is continuing to provide access to Galileo for agents who had GDS agreements with TSG “during this transitional phase.”

Bad News for Unsecured Creditors

But the news is not good for the many travel agencies who are unsecured creditors. RSM Richter said it is “not expecting a payout for unsecured creditors.”

Many of the amounts are relatively small – less than $300. But New Wave Travel, a large Toronto agency, is owed CAD 59,600 in unpaid productivity incentives.

Yannis Kakagianni of National Travel Service, Toronto, had an agreement with Convergentware under which productivity incentives were paid annually.

“My contract expired in October 2009,” he said. “They used to pay in January or February for the previous year.” But this time, payment was not forthcoming, and National Travel was owed about $5,000.

Over several months, Kakagianni attempted to reach the company but got no answers. “Then, at end of May, Warren [Stableford, co-founder and chief executive officer of TSG] told me he didn’t work for them anymore,” Kakagianni said.

He said Stableford told him the company was for sale. Kakagianni heard nothing more until he received a statement from the trustee.

About the New Owners

Trideep Aggarwal, president and chief executive officer of Wizie.com, said the company’s immediate goal is to gain an understanding of its new customers and to reassure them that services will continue. “We are keeping some of the technical staff” of TSG to ensure a smooth transition, he said.

Wizie.com was founded in 1999 to provide “world-class IT products, services and solutions for small, mid- and large-size businesses to enable them to grow their business using next generation technologies.”

Among the companies it works with are Amadeus, Farelogix, Priceline.com and the Expedia Affiliate Network. It also serves as the exclusive partner for Lufthansa India Fulfillment Center and handles reservations and ticketing of all tickets from the U.S. to India on Lufthansa.

It has a branch office in Halifax and in Gurgaon, India, one of the country’s important financial centers and the “call center capital of India.” The various locations allow Wizie to provide round-the-clock service.

Aggarwal said Wizie views the acquisition of TSG as an entry into the Canadian market. In the U.S., he said, Wizie has concentrated mostly on the consolidator market, but it plans to modify and expand its product offerings.