OpTree

In the latest development in the YTB case, a judge has ruled that the two class action suits brought against the company last year will be consolidated.

U.S. District Judge G. Patrick Murphy made the ruling last week after hearing from all involved in the case. As we told you a few weeks ago, Judge Murphy was adamant that the two sides find a way to consolidate the case. Judge Murphy told each of the sides last month that he would not hear two parallel cases simultaneously. “We’re not going to be hearing two cases at one time, the judgw said. It makes a lot of sense to file one complaint.” Lawyers in both cases agreed that consolidation of the two suits was appropriate in the case.

YTB, the internet based travel company is being sued by former independent consultants who claim that the company operates an illegal pyramid sales scheme and utilizes an illegal referral sales technique.

Lawyers from each of the two cases will continue to represent clients in individual suits, but will also agree to work jointly as co-counsel on the main class action suit.

No word yet on when exactly the case will be brought back to court but I am sure the company wants to get this resolved already.  With their stock trading at below 50 cents, there doesnt seem to be a lot of good news facing the company.

Popularity: 4% [?]

A judge presiding over two competing class action suits against online travel company, YTB has asked lawyers in each of the two suits to find a way to consolidate the cases.

U.S. District Judge, G. Patrick Murphy told each of the sides last week that he would not hear two parallel cases simultaneously.”We’re not going to be hearing two cases at one time,” the judge said. “It makes a lot of sense to file one complaint.”

The lawyers in each case were given two weeks to come together to figure out a way to come together into one suit. If there is no agreement reached in that time, Judge Murphy will issue an order of his own choosing.

The two suits, one filed in California and one in Illinois are seeking a total of over $100 million dollars in damages stemming from claims that YTB was operating an illegal pyramid scheme and defrauded their independent consultants out of millions of dollars.

Now the lawyers from each case must come together and figure out a way to consolidate the two cases. Not only do they have to choose the fairest way to represent all of those involved, but they must also figure out who will represent the former YTB consultants. The lawyers have also begun to bicker over who will be lead counsel. Even when and if the suits are consolidated, the earliest the two cases will come to trial will be 2010.

YTB of course said that whether there is one suit or two, they will defend themselves vigorously against all charges Jonathan S. Quinn, just one of YTB’s lawyers, said, “The firm has done nothing wrong. The agents were trained to make money by working at home. They could sell travel-related services, such as airline fare, or recruit others to sell travel services. There were two different opportunities to earn money, both valid.”

Pre trial motions in the case will be heard just after the first of the year.

This has been a rough year for the embattled company that continues to try and put 2008 behind them. With recent horrible third quarter results and the sell off of assets, the year can’t end sooner.

Popularity: 5% [?]

In the wake of the announcement that third quarter profits have plummeted for online travel site, YTB, comes the announcement that the company has decided to mix some things up in their management team.

The company announced this week that they have promoted J. Kim Sorensen to Vice Chairman and Andrew Cauthen to President. 

Sorenson, who was previously president of YTB International, will remain President and Chief Executive of the company’s subsidiary, YTB Travel Network. 

Cauthen joined YTB since 2004 as the company’s Chief Operating Officer and then moved up to serve as President of YourTravelBiz in 2006. Cauthen was then named COO of YTB International in January 2008.

YTB has been hit pretty hard these last few months, not only have their profits plummetted almost 90% percent, but they’re being investigated for illegal practices in two different states, they’ve had to lay people off and just yesterday came word that they had to sell an office building and their learjet.  Hopefully these reassignments will shake things up a bit and get the company going in the right direction. 

Popularity: 5% [?]

YTB International Inc., has just released their financial results for the third quarter, and not surprisingly, the company did not do well.

Currently, the online travel agency which uses independent sales reps to sell travel packages, is under investigation by two different state attorney generals, in Illinois and California, for allegedly operating a pyramid scheme.

Corporate filings (YTBLA: OTC) show pretty meager earnings for the third quarter, showing a profit of only $288,000 in the three months ending September 30th. That is a huge decline from the same quarter last year when the company raked in over $2 million dollars in profit.

Filing with the SEC show that while revenue grew, so did its operating expenses which climbed 13 percent this year. All total, net loss for the nine months ending September 30th was $3.4 million dollars.

“While we are disappointed by the reduction in our net income, we are also aware that much of the softness we are seeing is reflective of both an industry-wide trend and a difficult comparison to last year’s explosive growth,” company CEO Scott Tomer said Monday. “In the face of a looming recession, growing companies face the difficult choice of either cutting back on marketing efforts to save on expenses, or increasing these efforts in order to capture the increasingly selective customer,” he added

The company said that it plans to help raise cash by selling some of their assets, including an office building in Edwardsville as well as the company’s Learjet.

The YTB stock has gotten hammered this year.  From a high of over $4 to where it sits today at around $0.33, the company’s issues continue to mount as concerns about the ongoing lawsuits and financial situation continue to plague them.

Popularity: 5% [?]