Thursday, April 16, 2009

ConQuest by any means

As of Wednesday, Conquest Vacations, a Toronto-based tour operator ceased all operations - another victim of tough economic times. A reputable firm with a 37-year pedigree, Conquest's abrupt announcement left an estimated 1000 to 2000 travellers stranded in Mexico and the Caribbean.

While many other Conquest travellers (who did not fly with Conquest directly) are being taken care of, and others who have not yet travelled are being offered refunds, those who paid for service and who are now stuck seem to have been put in an unconscionable position. Having already received funds, does the company not have a responsibility to tie up its loose ends before vanishing into oblivion?

When I was a kid, I took swimming lessons at a private facility called FitKid. I only took lessons during the summer, but one year my mother observed as the owner made a big push to those who would be taking lessons during the upcoming school year to sign up and pay up. Then, after the summer was over, FitKid hastily closed down and disappeared.

How can people accept fees for service, take the money, and run? Shouldn't that be illegal? I've never truly understood bankruptcy.

On the one hand, it makes a lot of sense. Limited liability by separating the corporation and the owners is quite reasonable. Companies can accumulate a debt well beyond the capacity of a single person to pay, and the collapse of that business shouldn't leave employees with debt collectors kicking them out onto the street with just the clothes on their back.

Yet it's infuriating that company executives run away scat free with millions in their pocket, whilst shareholders, creditors, and customers are left holding the bag. Take, for instance, Flagship Studios - a game company founded by ex-Blizzard Entertainment employees. They produced the grossly unsuccessful role-playing game Hellgate: London, and as their ship sank, they sold off their intellectual properties and dissolved the company... then they went ahead, founded a new company, and started over with nary a concern over their recent fiscal woes.

Bankruptcy, it seems, has very little impact on those who precipitated the event. They retire to pensions, escape with millions, or develop amnesia and start over. Meanwhile, the everyman is often burned. It's this absurdity that has nurtured a growing resentment toward the corporate elite in the West.

I'm not saying that executives of failed companies should be abandoned as unemployable, dirt-poor scum; but surely they should at least share in the tribulations of their company, creditors, and employees... or maybe just experience a little trouble finding their way home.

3 comments:

yubin said...

I know what you mean.
Costco went bankrupt, and a month before they declared bankrupcy and closure of all Costcos, I renewed my membership and paid $50 just to use it for a month.
Now that is messed up!
They were giving refunds, but
only the primary card holder could
get the refund.

Anonymous said...

The bit about Flagship is off. Runic was founded by the members of the Seattle team, headed by Travis Baldree, not Bill Roper, and they had to get all their money from outside sources. The people who worked on Hellgate, the game that did fail, lost all their money and scattered to new companies. They didn't sell anything, all the IPs and technology got lost to Hanbitsoft when they couldn't pay back their debts.

a_ndy said...

Interesting. Thanks for clearing that up.