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A Force 10 professional was appointed as Custodian and Receiver sua sponte by the Delaware Chancery Court and then served as the fiduciary through the Chapter 11 process for this online travel agency, raising cash through asset sales, avoiding preferences and fraudulent transfers, and settling D&O claims.
AirFastTickets, Inc. (the Debtor), founded in 2011, owned and developed proprietary software to help consumers find low-cost airfares. The company was required to be accredited by the International Air Transport Association (IATA), but in mid-2014, it stopped making payments to airlines for the ticket sales it arranged. IATA revoked and terminated AirFastTickets’ accreditation and license agreements due to the breach of IATA’s regulations and because AirFastTickets owed $70 million to over 400 airlines and $38.5 million to various creditors.
The Debtor’s loss of its IATA accreditation caused it to become insolvent and unable to continue operations. We were brought on in April 2015 as financial advisors sua sponte and subsequently appointed as Custodian and then Receiver to help restructure the company and perform forensic accounting work.
In June 2015, the Debtor’s executives were informed that the founder of AirFastTickets had been perpetrating a fraud in which he took funds investors had’ loaned to the company, created a fake vendor, and then siphoned the money into his own pocket. In July 2015, the Petitioning Creditors filed an involuntary petition for relief under Chapter 7, and later that year, the case was converted to a Chapter 11 proceeding. The Plan of Reorganization was successfully confirmed in 2016.
