What recourse do attendees, sponsors, hotels, and suppliers have if a meeting is abruptly canceled and the event organizer files for bankruptcy protection? Not much other than to wait in line until the organization comes up with a plan to pay back its creditors, says hospitality industry attorney James Goldberg, Washington, D.C.
This unusual scenario happened earlier this month at the Marriott Marquis in New York when the Global Sourcing Forum suddenly canceled its October 13–14 event. The meeting, which last year drew some 1,000 corporate executives and government officials from 25 countries, was focused on matters related to The New York Times, the meeting organizer, OutsourceWorld LLC, Boca Raton, Fla., had some major sponsors back out at the last minute and couldn’t make its payment to the hotel. OutsourceWorld’s bankruptcy attorney, Philip Landau, partner with Shraiberg, Ferrara, and Landau, Boca Raton, Fla., was quoted in the Times saying that OutsourceWorld was seeking bankruptcy protection and would file Chapter 11. David Etzler, chief executive officer and managing director at OutSourceWorld, has been producing the event since 2005.. According to an article in
The Times reported that attendees from as far away as Ghana, China, Poland, and India had arrived in New York unaware that the meeting was canceled, and attendees, sponsors, and vendors were out thousands of dollars in fees and expenses. The conference Web site, www.globalsourcingforum.com, as well as the company Web site, www.outsourceworld.com, are blank.
What can attendees and sponsors do to recoup their losses? “The simple answer is nothing—they are stuck,” says Goldberg. “You get in line with the rest of the creditors. Your chances of recovering 100 percent are probably [zero]; it depends on how much future income they have coming in,” he says.
Among unsecured creditors, Goldberg says, no creditor has priority over another. Therefore, the hotel wouldn’t get a higher percentage repaid than a sponsor or an attendee.