Discovery Tours Bankruptcy Case Dismissed

The U.S. Bankruptcy Court has dismissed Discovery Tours’ Chapter 11 case, leaving senior citizens accusing the travel company of ripping them off back at square one.

The Centralia tour operator remains on the hook for debts to unpaid workers, customers and lenders — including many elderly clients in Lewis County.

Seniors who have loaned money to the company, which specializes in vacation tours and day trips for people over 50, are coming forward to collect delinquent debts. And consumer complaints are piling up with customers reporting that the business took their money, canceled trips and didn’t provide refunds.

The U.S. Bankruptcy Court dismissed the case Jan. 11 because the tour operator failed to hire counsel, though it was soliciting a pro bono attorney in a letter to clients dated Nov. 30.

A clerk at the Tacoma bankruptcy office told The Chronicle they have been inundated with calls about Discovery but there’s nothing further the court can do.

Now, creditors can try to get their money from the company directly, take them to small claims court or file a lawsuit.

Customers still needing refunds can also call the the state Attorney General’s Consumer Protection Division, which has received 84 complaints about Discovery since 2011. The office attempts to mitigate each complaint with the company. After reviewing the allegations, the state then decides if the situation warrants legal action.

Discovery’s CEO, Melody Miranda, said the company will continue to operate in order to fully refund customers.

The office on Harrison Avenue in Centralia has a sign on the door stating that the company is temporarily closed, though Discovery is still selling tours, with four Northwest day-trips and a Caribbean cruise departing today, according to the company’s website.

Inaccurate Information

Customers are reporting Discovery is sending convoluted information out to seniors still needing refunds.

“It seemed like they were just buying time and they were gonna high tail it outta there with all the money,” said Centralia resident Lorna Shelton, who is working on filing a $3,000 claim for her 76-year-old mother. “It’s just sickening.”

Discovery sent notices recommending that clients who paid cash and declined insurance would receive refunds directly through the bankruptcy proceedings. The company advised customers who paid with credit cards to dispute the charges.

For those with third-party insurance, Discovery recommended placing a claim with the insurer.

In an invoice dated Dec. 25 to Shelton’s mother in Centralia, Discovery listed AIG as the insurer. But when The Chronicle called to confirm the policy on Jan. 4, an AIG representative said Discovery no longer has insurance with the company. The representative declined to release the date coverage ended.

In another document that came along with the invoice, Discovery lists New York-based Berkely Insurance Agency but does not provide the phone number. The letter requests that customers file insurance claims for money owed, stating that their right to a refund may have been affected by “gross misconduct” of a Discovery employee.

“Unfortunately, Discovery Tours provided incorrect information,” Berkely wrote in a response to clients who had submitted claims as Discovery Tours suggested. “The policy does not cover an insured’s bankruptcy. It is not a consumer protection plan or bond and is not intended to provide automatic reimbursement in that regard.”

“It is my further understanding that the policy does not cover (an) insured’s bankruptcy, insolvency or cessation of business,” Marilyn Orenstein, a Berkely representative, wrote in an email to The Chronicle on Friday.

When The Chronicle called Discovery for clarification, Miranda hung up on the reporter when asked to provide the correct insurance information.

Miranda did later respond by email, saying Berkely would accept a “master claim” from Discovery to cover gross misconduct of an employee after completing an audit of the accounts. Berkely could not confirm to The Chronicle the accuracy of that information.

Miranda accuses a former employee of embezzling funds. But when she reported the alleged misconduct to the Lewis County Sheriff’s Office Nov. 15, Miranda said she was not sure if money was missing, how much it was, if it had been misplaced, or if an employee had simply made an error, and that she had no idea how to check using the company’s bookkeeping system.

Because the documentation Discovery sent included inaccurate and outdated information, Shelton said, it made filing a claim for her elderly mother extremely difficult and confusing.

“The elderly are less likely to follow up if they get frustrated,” Shelton said. “They’re just vulnerable people who just don’t know how to deal with it.”

Shelton said her parents went on many enjoyable trips with Discovery over the years and built a trust with the company.

“If they ever get their money back, it’ll go to their estate. They just don’t have the time,” she said. “It just breaks my heart.”