Monday, July 23, 2018

Discovery Tours Bankruptcy Details Delayed Until Fall

Discovery Tours, a school tours company that filed for bankruptcy, had its hearing delayed until September 20, with the goal of providing court officials with more time to look through company records, including bank statements, credit card statements, PayPal accounts, and cash flow to and from the tour company to hotels, bus companies, and the owners of Discovery Tours.

Closure of Company, Limited Assets

The company, based out of Mayfield Village, Ohio has been in the business of educational tours for schools (to New York City, Chicago, the Henry Ford Museum outside of Detroit, Michigan, and Washington D.C.) for 36 years before closing in May, filing Chapter 7 bankruptcy. Chapter 7 bankruptcy is not a reorganization, but rather a liquidation of company assets and paying back cash should it be available. News 5 in Cleveland found that the company was still accepting trip deposits and paying out to family members (totaling $7,68,840.71) just prior to filing. Most of the payments were distributed to the company’s Vice President, Joseph Cipolletti, who, according to the filing was owed $537,348.90 for payments made on his personal credit cards, as well as loan repayments. The company’s closure cancelled trips for dozens of schools across Ohio, despite the fact that more than 5,600 people had paid millions of dollars in trip fees. Unfortunately for the families and businesses owed money ($3.9 million in total), according to Discover Tours’ bankruptcy filings, it has few remaining assets, worth a total of about $1.4 million.

A History of Delays

Waldemar Wojcik, the court trustee for the case, said that he plans to question Discover Tours Vice President, Joe Cipolletti as well as other members of the Cipolletti family, including Founder and President, Alfred Cipolletti. The Cipolletti family owns Discovery Tours, and has many family members working for it. The company filed for bankruptcy on May 7 in U.S. bankruptcy court. Joe Cipolletti began to explain his company’s financial issues back on June 14 at bankruptcy court in Cleveland, Ohio. Wojcik put the “Meeting of Creditors” on hold after just a few hours, and rescheduling the rest of the meeting to July. He then issued the delay discussed above.

Recovery Efforts

Wojcik has been hard at work attempting to recover some of the lost funds for the purpose of distributing some of their money owed. His efforts included such things as selling off meal vouchers to another tour company, which bid the largest amount of money on them. Even so, Discovery Tours took a loss of almost $6,500 on the vouchers alone, with a value of almost $17,000; they sold for $10,500 to Nowak Tours. The vouchers are for use at three locations in Washington, D.C. However, they expire art the end of this year. Additionally, Wojcik is attempting to recover deposits to hotels for trips that never took place due to the company’s closure. “We’re sending out a slew of demand letters to get money back,” Wojcik shared.

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