TravelStorm, which hosts vacation rental sites owned by professional property managers, yesterday gave customers notice that it will cease operations June 4.
The "cessation of service" notice is the latest wrinkle in the 8-month-old wrangle between TravelStorm and HomeAway in which HomeAway found itself in possession of TravelStorm's servers after acquiring Instant Software in September 2010.
The termination means these vacation rental sites have to redeploy and in some cases rebuild their websites within 30 days or face disruption of their businesses. TravelStorm claims to have 70 to 80 customers.
TravelStorm CEO Phillip Hopcroft's email to clients repeats claims that HomeAway sought to drive the company out of business. Hopcroft writes:
The eight months that we have been unable to access our servers or software have had a fatal effect on TravelStorm. We have been unable to develop our market leading software, unable to install orders already in hand, unable to accept new orders and were even unable to fix bugs.
Hopcroft claims that on March 11 TravelStorm offered to give HomeAway a free license to use TravelStorm software and hardware for six months to give TravelStorm clients the breathing room to migrate their websites.
HomeAway/Instant never successfully negotiated a free-licensing agreement, Hopcroft says, but on April 12 HomeAway sent a letter to TravelStorm customers informing them that the servers would be kept powered on for a time, and HomeAway wouldn't intervene if they had problems or crashed.
Hopcroft says HomeAway requested "that both TravelStorm and the client sign a document that had the effect of removing most all of our clients' and our rights and was, in our view, a blatant attempt to gain an advantage in the pending litigation," Hopcroft alleges.
The following is part of the release that HomeAway asked TravelStorm to sign, according to Hopcroft:
In exchange for HomeAway's agreement to assist Customer in moving its website to a new hosting service of Customer's choice, as of the Effective Date, TravelStorm hereby and forever releases, indemnifies and holds harmless HomeAway against any losses, claims, damages, liabilities, and expenses relating to any matters of any kind that TravelStorm may possess as of the Effective Date or in the future against HomeAway arising from HomeAway assisting Customer in moving its website to a new hosting service of Customer's choice. This release does not extend to any obligations incurred prior to this Agreement.
Vacation rental clients also would have been asked to sign a release.
HomeAway declines to comment further on the matter, but an argument can be made that the above release may not be unreasonable.
Contrary to Hopcroft's assertion that the release would obliterate "most all of our clients' and our rights," the release that TravelStorm was requested to sign states in part: "This release does not extend to any obligations incurred prior to this Agreement."
In other words, it seemingly would not have stopped TravelStorm's from making claims against HomeAway for issues related to its alleged lack of access to its servers and software prior to signing the release.
It seems reasonable that HomeAway would seek some liability protections if it were to assist TravelStorm customers with their migration to other hosts.
Hopcroft writes that TravelStorm refused to sign the document and advised clients not to sign without first consulting with their lawyers.
"It is with deep regret that I have to give to you 30 days' notice of cessation of service," Hopcroft wrote on May 4. "On June 4, 2011, TravelStorm will discontinue all services."
The TravelStorm-HomeAway matter is subject to litigation in Denver.