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Total Travel Management Inc. last month filed for Chapter 11 bankruptcy protection in a U.S. district court in Eastern Michigan.
Combined with its sibling firms, TTM represents one of the larger travel management companies in the United States and is apparently the biggest to ever go bankrupt. However, following an earlier assessment that TTM's condition was "dire," the company's largest creditor, Worldspan, this week wrote to the agency's clients indicating its support.
According to the letter, obtained by The Beatand penned by Worldspan vice president of major accounts Cheryl Weldon, "Worldspan and TTM's management teams met to discuss TTM's financial strategy going forward. After these discussions, Worldspan is now supportive of their 'go forward' position and believes that they are positioned to address their financial issues through their Chapter 11 proceeding and will emerge a strong and viable travel company."
TTM CEO Linda Lossing also runs Global Experts in Travel, which counts among its clients DaimlerChrysler. Several sources said competitors have been soliciting TTM's and GET's clients. "The sharks smell blood in the water," said one observer. Perhaps it's no wonder. While a Chapter 11 filing looks bad enough, Worldspan's lawyers had previously suggested in court documents that TTM could face "immediate liquidation."
The Troy, Mich. travel management firm owes more than $1.1 million to Worldspan, according to court papers. An agreement signed between the two companies in May 2005 resulted in Worldspan paying in advance "certain incentive and/or commission payments to [TTM] during the years 2004 through 2006. The advanced sums were attributable to commissions for travel bookings that [TTM] anticipated making (through Worldspan's proprietary computer system) during the life of the agreement. [TTM] agreed that if it failed to book as many travel arrangements as anticipated, it would repay the advanced sums in cash."
Sources requesting anonymity suggested that TTM and GET may be victims of the weak-performing auto industry that drives much of its volume. Some also blamed the split between Lossing and ex-husband Brent Garback, who formerly ran the company with Lossing. Garback himself is listed as Total Travel Management's largest unsecured creditor, owed $625,000.
According to court papers, Total Travel Management is carrying nearly $6 million in liabilities, with assets of less than $390,000. More than $300,000 apiece is owed to current or former customers BMW of North America, DaimlerChrysler, Delphi Corp. and General Motors. Other claims included $210,000 for Concur Technologies and more than $130,000 for Sabre Inc. Lossing and her husband John Lossing are together owed $190,000, according to the papers.
Heavy debt may be the reason TTM was not sold before this point, sources said. The company's largest account for many years was General Motors, until the car giant left in 2003 for American Express. TTM quickly replaced GM with DaimlerChrysler's Canadian and U.S. operations.
Lossing in 2004 attempted to remake the company with the new Global Experts in Travel brand and global network. One of several owners, Lossing also is president and CEO of GET, which lists on its Web site partners in Argentina, Brazil, Canada, India, New Zealand, Mexico, Peru, Venezuela and the United States.
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