Leading vacation rentals booking service LeisureLink has shut down its operations, laid off its employees and discontinued use of its platform, leaving dozens of property managers unpaid for completed reservations due to homeowners.
In a Sept. 27 letter to its partners, which you can read in full at the bottom of this article, Salt Lake City-based LeisureLink said all employees of LeisureLink were being terminated and the platform turned off, after its management was unable to raise additional equity to fund the company. In that letter, the company said it had been working with an investment bank in the last 12 months and expected it would raise money this summer but they determined that in spite of interest from strategic buyers and investors that it was unlikely to complete a transaction before late Q4 of this year.
LeisureLink raised a $17 million round of growth funding earlier this year but in spite of that many people were not entirely surprised by the sudden shuttering of the company. The capital, provided by Clearstone Ventures, Kinderhook Industries, and Escalate Capital Partners, was intended to be used to scale company operations “to meet the rapidly expanding demand for LeisureLink’s services,” yet by late spring LeisureLink began laying off employees and by early summer they began implementing spending freezes.
Then, in August 2016, LeisureLink sold several of its mountain travel sites to Ski.com, including MountainReservations.com, VacationRoost.com, ParkCityReservations.com and BreckenridgeDestinations.com among others. In a statement related to that sale Julian Castelli, CEO of LeisureLink, said, “Though it is hard to let go of a business that we have grown and loved for 10-years, we know that our customers and destination experts will thrive in the Ski.com family. Going forward, this transaction will allow us to focus even more of our resources on our core business of vacation rental distribution. Our distribution platform will allow more vacation rental suppliers to connect with great travel brands like Ski.com, Airbnb, Booking.com and Expedia in the future.”
That optimism did not hold up, however. By that time it was already a common assumption that LeisureLink itself was on the block. Rumors insisted the remainder of the company was being acquired by RealVoice and BookingPal but in the end nothing came of that and LeisureLink was left with no available cash and unable to continue operations.
Thus the unsettling Sept. 27 notice to its partners and employees that it was shutting down.
What will happen now to its many creditors and to the people who booked reservations through those rental management companies? It’s hard to tell but LeisureLink has agreed to undertake an Assignment for Benefit of Creditors (“Assignment”), which is a process designed to manage an orderly disposition of the Company’s assets and to distribute those proceeds to creditors according to their legal rights and priorities. LeisureLink said that as required by law, the Assignee will be mailing notices of the Assignment to all creditors in the next 30 days, providing further information about the Assignment and providing creditors with a proof of claim form through which creditors can file a claim for any obligations due.
Following is the full text of the letter LeisureLink sent to its “Partners”:
Dear Valued Partner,
LeisureLink has been helping suppliers of vacation rentals generate bookings through third party channels for over nine years, and has experienced accelerated growth for the past several quarters. Supporting this growth and building the technology solutions for the industry has been a capital intensive process. LeisureLink is privately-owned and has historically met these capital needs with investments from its owners. For the last 12 months, LeisureLink has been working with an investment bank to raise additional equity capital to fund the Company’s growth for the future. The Company expected this process would yield an infusion of needed capital this summer.
While LeisureLink attracted considerable interest from many strategic buyers and investors, management has determined that none of these parties are likely to complete a transaction before late Q4 of 2016. This timing and the continuing cash needs of the Company has created a liquidity deficit which prevents the Company from continuing its daily operations. As a result, we have no choice but to stop operations and not process any new bookings as of September 27, 2016. At this time, all employees of LeisureLink are being terminated and the platform turned off.
LeisureLink values the working relationships built over these last 9 years and appreciates the loyalty of its employees, vendors, customers and partners and is trying to cease operations as smoothly and orderly as possible, given the circumstances.
To that end, the Company has agreed to undertake an Assignment for Benefit of Creditors (“Assignment”), which is a process designed to manage an orderly disposition of the Company’s assets and to distribute those proceeds to creditors according to their legal rights and priorities. As required by law, the Assignee will be mailing notices of the Assignment to all creditors in the next 30 days, providing further information about the Assignment and providing creditors with a proof of claim form through which creditors can file a claim for any obligations due.
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