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Thomas Slome and Jil Mazer-Marino Noted in Daily Deal, “Lonely Planet to Acquire Intellitravel Assets”

Media Source: Dail Deal

Thomas_R_SlomeJil-Mazer-MarinoLonely Planet USA LLC has won an auction to purchase all the assets of digital travel magazine publisher Intellitravel Media Inc. for $2.4 million plus other considerations.Lonely Planet, a Franklin, Tenn., travel guidebook publisher owned by NC2Media, awaits a Wednesday, Feb. 26, sale hearing before Judge Allan Gropper of the U.S. Bankruptcy Court for the Southern District of New York in Manhattan.

Intellitravel named digital travel publisher ShermansTravel Media LLC of New York as the backup bidder following the Feb. 7 auction, with a $2.3 million bid. ShermansTravel would acquire Intellitravel’s assets should Lonely Planet’s deal fall through.

Lonely Planet’s winning bid includes payments of 80% of the seller’s accounts receivable, if and when they are collected by the purchaser; cure costs of designated contracts; and an agreement to deliver magazines to satisfy the seller’s subscription liability.

The deal encompasses all of the debtor’s tangible assets, including computer hardware, equipment and software, digital video display devices and other property; and all intangible property such as trademarks, goodwill and intellectual property. Excluded from the sale would be any trademark or website that includes the name Arthur Frommer, according to the asset purchase agreement.

Debtor counsel Joseph Corneau of Klestadt & Winters LLP declined comment on why the Frommer trademark was excluded.

Another travel publisher, Morris Visitor Publications LLC, in November had offered $500,000 for the debtor’s assets as the stalking-horse bidder, plus 80% of the value of the company’s accounts receivable. Morris Visitor also would have assumed cure costs for designated contracts and agreed to continue providing some form of a travel magazine to current subscribers.

Morris Visitor will receive a 3% breakup fee for losing at auction.

The Augusta, Ga., publisher produces Destination Alaska, the Milepost and other regional travel magazines, in addition to equine, sporting, lifestyle and regional publications.

Intellitravel, meanwhile, previously published Arthur Frommer’s Budget Travel magazine’s print version before it went digital. BRG Investments LLC, sole shareholder of the New York-based debtor, in 2009 purchased the bimonthly magazine, first published in 1998. The debtor canceled its print edition in October 2012 but continues to operate its website and produce a digital tablet version of the magazine.

Creditors Stuart Wald (owed $7,013), Amanda Marsalis ($4,500) and Ryan Murphy ($3,470) filed an involuntary Chapter 7 petition against the Budget Travel publisher on Dec. 5, 2012. The debtor agreed to convert the Chapter 7 bankruptcy to Chapter 11 on March 19, 2013.

Intellitravel in court papers blamed some of its financial woes on the Chapter 11 case of hedge fund Fletcher International Ltd., filed June 29, 2012. Fletcher is BRG’s parent.

The company listed $1.04 million in assets and $2.94 million in liabilities, all unsecured, in its May 1 schedules.

The creditors holding the largest amounts of unsecured claims include G&S Realty 1 LLC ($494,698), A.T. Clayton & Co. ($353,347), CDS Global ($347,669) and Quad/Graphics Inc. ($301,294).

Thomas R. Slome and Jil Mazer-Marino of Meyer, Suozzi, English & Klein PC represent the official committee of unsecured creditors.

Greg Betterton of Betterton, Tyler & Summonte PL is counsel to Lonely Planet.

Kevin Saer of Davis Wright Tremaine LLP represents ShermansTravel.

Marc D. Powers and Jorian L. Rose of Baker Hostetler LLP and Mark S. Burgreen of Hull Barrett PC are counsel to Morris Visitor.