Contrary to what some of the commenters on this blog (and others) think, this lawsuit has a lot more teeth and is asking for fines that will dwarf what was asked for and received by California.If found guilty, a verdict could cost YTB over half a billion dollars. If you read the filing, you need to note that there are two separate counts. The Illinois Attorney General, Lisa Madigan is charging that YTB violated the Consumer Fraud Act (Section 2A2) and also violated the act a second time for unfair and deceptive acts or practices.
In each of these counts, the State is seeking fines of $50,000 per violation, legal fees, plus restitution. Now at the end of 2007, YTB reported that there were 5720 RTAs in Illinois.
So, if the AG is successful, YTB is facing $285 million per count, plus complete restitution of all costs to each RTA. Do the math.
Is it realistic to expect that? Not at all, but as with any legal case, you fire the first shot high. I am sure Illinois will be happy with an injunction preventing YTB from operating and no money. Madigan is a tough cookie and some feel she is perhaps the toughest prosecutor in the US. Take a look at her accomplishments for 2007 alone. If I were YTB, I might be very worried. If I were any of those Directors that bailed last month, I would be breathing a sign of relief.
As I said before, I feel the case is laid out much more clearly in the Illinois filing and it really highlights the variance between those on the bottom of the pyramid and those on the top. The St. Louis Post Dispatch has a good analysis of the suit, and they agree, that it does not look good for YTB--contrary to the hundreds of comments from the YTB faithful who claim that this is all good news!
And to be honest, with all this court time, I am not sure when YTB will find the time to sell travel or recruit. Class actions, former Director suits, suing former directors, the little issue Coach has about River House, and I am sure a repeat appearance in Los Angeles for contempt (just a prediction).
