Federal Class Action Suit Reinstated Against YTB - Zam Zuu

Travel Pulse is reporting that a Federal Court has overturned a District Court decision and remanded the case back to District Court.  Initially, the District Court judge dismissed the case saying it belonged in a state court.

A three judge panel has determined that Murphy (District Court Judge) was wrong to dismiss it and was wrong to discharge any out of state plaintiffs since they were indeed harmed in Illinois. The "discharged" plaintiffs are now free to re-join the suit against YTB - ZamZuu.

The suit charges that

The defendant corporations have taken over half a billion dollars from their unsophisticated customers, selling them on the dream of cheap travel and million dollar pay-outs when the only way that plaintiffs and their class could make a net profit was by recruiting others to join the illegal pyramid scheme.

While over half of the its customers received no travel commissions at all, the directors of YTB International, Inc. each paid themselves multi-million dollar salaries while also siphoning tens of millions of dollars from their publicly traded corporation to privately owned corporations that they owned and controlled.

While it remains to be seen if this suit has any teeth--it has been through the wringer for sure--one thing is for certain, it will certainly consume valuable resources from YTB in terms of time and cash to defend.

The cash position of the company was poor last quarter and an updated financial report is due any day now (convenient how it comes out AFTER the convention) which will shed some light.   YTB made several very risky deals in selling their home office.