The pandemic has pushed the billionaire Carlson family, one of the wealthiest in Minnesota, out of the business where they made their fortune.

Carlson Travel Inc. and 37 related companies tumbled into bankruptcy last month after they were no longer able to withstand the worldwide collapse of corporate travel caused by efforts to slow the spread of coronavirus.

As the firms restructured $1.6 billion in debt, members of the founding family traded their ownership interest in the firms for debt forgiveness.

"The companies are now owned by a group of financial institutions and bondholders," Julian Walker, a Carlson Travel spokesman said. The family members "have no skin in the game."

The outcome is another major turning point for the Carlson family, now led by Marilyn Carlson Nelson and Barbara Carlson Gage, daughters of Curt Carlson, who started the Gold Bond Stamp Co. in 1938 and then the Carlson hotel and travel companies in the 1960s.

Carlson Cos., with its then-portfolio of 1,400 hotels, was sold in 2016 to the Chinese conglomerate HNA Tourism Group. With the exit now from the travel entities, the family's assets are chiefly in other investments.

The restructuring does not involve Carlson Private Capital Partners, the family's private equity firm in Minnetonka.

Carlson Travel will maintain its headquarters at the company's campus at the intersection of Interstate 394 and Interstate 494 in Minnetonka.

The company, which makes money by booking business trips and meeting and event planning, said in court filings that it does not expect its business to return to pre-pandemic levels in the next three years.

"Though the COVID-19 pandemic adversely affected many industries, few industries were as radically affected as the travel industry," Carlson Travel CEO Michelle Frymire said in an affidavit filed in bankruptcy court. "Corporate travel and in-person events and conferences came to an abrupt halt nearly overnight."

Carlson Travel expects to lose $15 million on revenue of $701 million next year, a substantial downturn from 2019, when Carlson Travel earned $239 million on $1.5 billion in revenue, court records show.

In the United States, business travel revenue in 2021 is projected to remain more than $59 billion below 2019 revenues, according to a recent report from the American Hotel & Lodging Association, a trade group. In 2020, business travel fell $49 billion. Hotels have shed nearly 500,000 jobs in the last two years, according to the trade group.

Minnesota has seen one of the steepest declines, with business travel revenue expected to be 72% lower this year than it was in 2019. Only eight other states will see bigger drops, with Massachusetts leading the way at 85%.

The primary business of Carlson Travel is CWT, formerly Carlson Wagonlit Travel, a global travel services company that employs more than 12,000 people in 45 countries. In 2019, CWT was a leader in corporate travel, booking thousands of business trips daily for government agencies, corporate giants and small- and mid-sized businesses around the world.

On an average day before COVID-19, CWT managed about 100 meetings and events, communicated to 70,000 travelers and facilitated more than 240,000 transactions, bankruptcy records show. The company processed more than $23 billion in hotel bookings, airplane flights, car rentals and other corporate travel expenses in 2019.

When the pandemic hit and travel collapsed, Carlson Travel executives sought to reorganize the company's finances, bankruptcy records show.

The company slashed costs through furloughs and pay cuts in 33 countries, saving $500 million. Altogether, the company temporarily eliminated about 5,000 jobs. It also renegotiated key contracts and leases, suspended capital-intensive projects and curtailed nearly all incentive compensation programs. Those changes permanently reduced operating costs by about $300 million a year, records show.

This May, the company hired investment banker Houlihan Lokey to contact 50 potential buyers and gauge their interest in buying some or all of Carlson Travel's assets.

Those talks ended after just one bidder emerged with an informal offer that failed to gain the support of Carlson's bondholders. In a liquidation analysis filed in court, Carlson Travel and its affiliates were valued at $1.1 billion, but creditors were unlikely to get back more than $202 million in a sale, records show.

The company also obtained $125 million in new equity from its owners and borrowed $260 million. Executives thought those moves would be enough. But then, as travel started to recover this year, COVID-19 cases rose again.

"In the United States, where recovery was initially perceived to be strong, the recent surge in the Delta variant and nationwide delays in 'return to office' initiatives injected significant uncertainty'' into the domestic travel recovery, Frymire said in the affidavit.

The company sought Chapter 11 protection last month with a prepackaged reorganization plan, one that had approval from owners and lenders. The plan will eliminate about half of the company's $1.6 billion in debt and provide $350 million in new equity capital. Carlson Travel plans to spend a portion of that on a new technology platform.

The company asked the court to approve the plan 18 hours after filing the case in Texas, noting that a delay of just a few days could mean the loss of customers and revenue.

However, the U.S. Trustee in Texas asked for a delay, saying the company's "breakneck schedule" made it impossible for creditors to evaluate and react to 38 bankruptcy cases.

Despite the protest, a Texas bankruptcy judge approved Carlson's plan the same day the trustee filed its complaint without commenting on the objection.

"We are pleased to have received prompt court approval of the agreement we reached with CWT's financial stakeholders, which positions the company for long-term success and provides significant financial resources to further grow and develop our business," Frymire said in a statement.

Carlson Travel asked the bankruptcy judge last week for permission to hire an investment banker to evaluate potential bids for the company. But that filing was made in order to pay the firm for an aborted sales effort earlier this year.

"We are not up for sale," Walker said.