ANCHORAGE (AP) The owner of a failed Anchorage-based tourism business said a poor accounting system is to blame for her predicament.
Jennifer Christensen, owner of Ask Alaska Travel and Tours, owes nearly $800,000 to creditors and has filed for bankruptcy.
Christensen testified Thursday at a packed creditors hearing in her company's bankruptcy case. She said she ''never got a good handle'' on the accounting side of the business, didn't review bank statements, blurred the line between personal and businesses expenses and ended up relying on her husband to cover some of her debts.
The business shut down in late July.
More than 1,000 travel-related businesses and tourists across the country and overseas are affected. Anchorage police are conducting a criminal investigation of Ask Alaska and the Alaska attorney general's office has filed a consumer fraud case against the firm.
At Thursday's hearing, bankruptcy trustee William Barstow asked Christensen how her tour company got into such a mess.
''I think the biggest mistake was expanding too quickly and having a terrible accounting system,'' she replied.
By the end of 2001, the company was in the red by about $350,000, Christensen said. The debt grew to about $400,000 last year.
''Everyone around me said I should file'' for bankruptcy, Christensen said.
She continued to operate, advertising the company as the largest custom-trip planner in Alaska, because ''I wanted to pay everyone back,'' Christensen said.
Christensen's company started off as a bed-and-breakfast referral service in 1997 and did $15,000 in sales, she said. The next year it generated $600,000 by expanding into a tour planning firm.
In 2000, she incorporated as Alaska Adventures & Accommodations Inc. and by the next year took in $1.8 million in revenue. By 2002, the newly named Ask Alaska Travel & Tours did $2.4 million in business.
But then her credit card processor, NOVA, started requiring a $50,000 reserve in case Ask Alaska ran into financial difficulties, she said. When the reserve was exhausted, NOVA seized money directly from the bank account where Ask Alaska deposited reservation payments made by tourists, Christensen said.
The money seizures created credit and cash flow problems, and Christensen couldn't find another credit card processor.
The company listed $151,000 in assets when it filed for bankruptcy on Aug. 1, most of which comes from a fleet of vehicles Christensen used to ferry customers around. Only two or three of the vehicles are fully paid for, Barstow said, so there's little equity with which to pay creditors.
Christensen also failed to pay employee withholding taxes from 2001 through when she closed the business. The Internal Revenue Service is due $70,000, according to her disclosure statement.
© 2017. All Rights Reserved. | Contact Us