Airline Ticketing Company Is Bankrupt : Liquidation: Judge issues Chapter 7 order because Irvine firm owes $2.2 million to creditors and employees.
Airline Computerized Ticketing in Irvine, which just months ago promoted the success of its electronic airline ticketing machines, was recently ordered into bankruptcy liquidation by U.S. Bankruptcy Judge William R. Greendyke in Houston.
In 1987, JoAnne Stewart founded the company that specialized in electronic ticketing of flights after plans had been arranged by a travel agent.
“It’s not the end of the world,” said Stewart, who said Monday that she plans this week to petition the court to reorganize her company’s debts under Chapter 11 of the Bankruptcy Act. “We’re picking up the pieces and moving on. I don’t die easily.”
Greendyke made the Chapter 7 order Wednesday against J.E. Marion Inc., the parent company of Airline Computerized Ticketing. Court filings estimated the company owed nearly $2 million to nearly 70 creditors, in addition to nearly $200,000 owed to eight employees, seven of whom worked in Houston.
“We just simply wanted to get paid,” said Jeff Hoffman, former chief operating officer and company president from Houston, one of the creditors in the case. Hoffman said he was owed $51,000 in salary and vacation pay. He was not paid for three months because his paychecks either bounced or never arrived, he said.
“I don’t know what happened. All the money and all the accounts were maintained in California,” Hoffman said.
Arthur Morello, an attorney with Pettit & Martin in Newport Beach, said the parent company was placed in Chapter 7 after former creditors and employees petitioned the U.S. Bankruptcy Court Southern District in Texas Jan. 5.
Morello represents several creditors and Debbie George, Airline Computerized Ticketing’s former marketing manager, who said she is owed $12,000 in back salary and $12,000 in stock options.
“Are my clients going to get their money? We are very hopeful that they will,” Morello said.
On Dec. 7, Stewart allegedly let go a group of Houston employees and operations staff as part of a cutback.
“There were some disgruntled employees who did not want the company to continue on without them,” Stewart, the company chairman, said Monday. “My company is not over, we’re just beginning.”
In a Feb. 3 written court response to the creditors claims, Airline Computerized Ticketing said the “petition has been brought in bad faith. The dispute involved disgruntled employees who resigned upon notice that they were to be terminated in December, 1993, as a result of a planned downsizing of” company operations. The company also admitted that it was “not paying its debts as they came due.”
Last year, Airline Computerized Ticketing had installed ticket machines in downtown Los Angeles at 725 S. Figueroa St. and at 3 MGM Plaza in Santa Monica. Another was operating in New York’s Rockefeller Center.
In an interview last September, Stewart said she started her business with $5 million from her own savings and from friends and family. She predicted that 300 ticket machines offering both discount and full-fare tickets would be placed nationwide by the end of 1993. She also predicted 5,000 machines would be in hotels, banks and shopping centers by 1998.
“When you are trying to follow someone’s dream, there comes a time when that dream has to become a reality,” said Pam Stutes, a former customer service representative in Houston who said she is owed $884.55 in back salary. “But I think she (Stewart) thought she was losing control over her Houston staff. She didn’t realize we were trying to make her company successful.”
Computerized Ticketing
* Founded: 1987
* Status: Forced into Chapter 7 bankruptcy liquidation by unpaid employees Wednesday
* President and founder: JoAnne Stewart
* Headquarters: Irvine
Concept: Dispenses airline tickets via electronic vending machines
Source: Times reports; Airline Computerized Ticketing; Researched by JANICE L. JONES / Los Angeles Times
