Cruise Ship Arrest

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kthoennes said:
I see in news reports that two of the three Crystal cruise ships have been seized by the fuel creditors. Well okay, but if I'm a fuel company, what do I do with a couple giant cruise ships now?
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Strip for any valuable parts and sell the rest for scrap?
 
kthoennes said:
I see in news reports that two of the three Crystal cruise ships have been seized by the fuel creditors. Well okay, but if I'm a fuel company, what do I do with a couple giant cruise ships now?
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I guess they get to pay storage costs until the courts decides what next
 
I see the creditors are owed $4.6 million. Heck, you can eat much in five minutes mothballing or mooring a cruise ship. Even if they get an amended judgment for collection costs on the original debt, good luck collecting. I dont get it. I must be missing something.
 
kthoennes said:
I see the creditors are owed $4.6 million. Heck, you can eat much in five minutes mothballing or mooring a cruise ship. Even if they get an amended judgment for collection costs on the original debt, good luck collecting. I dont get it. I must be missing something.
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My thoughts are similar. Owners file bankruptcy, then what? Unless the owners see losing more money than debt owed why would they rush into anything.
 
I don't even know who would buy used cruise ships at auction in this current market, one launched in 2003 and another in 2005. They're giant black holes for money. I don't mean to drift this thread, different in a lot of ways, but look at the City of Long Beach continuously pouring millions into the Queen Mary, or the succession of non-profits and investors limping along keeping the S.S. United States rusting away at the wharf in Philadelphia, already decades past any viability. I guess you could auction parts pretty easily to recover $4.6 million (restaurant supply wholesalers buying a few hundred dining room chairs?), rather than the whole ship, but then what? I don't see the end game here if Genting is bankrupt. I assume at this point they don't want the ships back.
 
I suspect that ownership of the ships is transferred to the fuel company who then scraps the ships to recover what they can. They may not recover all their losses, but if they waited to foreclose on the ships the outstanding fuel bill would have been even greater.
 
Fuel company is just getting the first claim in on the ships. Many others to follow. Ships will be turned over to a receiver and eventually sold or auctioned. Like most bankruptcies will be pennies on the dollar. However, the fuel arrest will have a priority that forces it to be paid before all the other is done.

The ones I really feel for are the crew. You read about passengers flown to Miami, but see nothing about what has been done for the crew.

There's much more to come in the collapse of Genting. As they discard the ships they don't want, they'll follow with a few resorts they don't desire. I wouldn't be surprised to see RWBimini at the head of that list.
 
My experience is a little dated but most of the employees probably don't work for the cruise line but a subcontractor. The subcontractors usually took care of transportation for the non US crew members. I am not sure if that was just customary or due to some sort of immigration requirements, but since most of the crew or not US Citizens, I suspect most of them will be sent home.
 
Benthic2 said:
I suspect that ownership of the ships is transferred to the fuel company who then scraps the ships to recover what they can. They may not recover all their losses, but if they waited to foreclose on the ships the outstanding fuel bill would have been even greater.
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The US government collects/recovers $1 for each ship it sells to scrappers. :facepalm:
 
Benthic2 said:
My experience is a little dated but most of the employees probably don't work for the cruise line but a subcontractor. The subcontractors usually took care of transportation for the non US crew members. I am not sure if that was just customary or due to some sort of immigration requirements, but since most of the crew or not US Citizens, I suspect most of them will be sent home.
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markpierce said:
The US government collects/recovers $1 for each ship it sells to scrappers. :facepalm:
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The ships are not in the US. They are in the Bahamas. As to the crew getting home, they may or may not have transportation paid on their behalf. There have been times crew had to pay their own way.
 
Maybe I'm too practical (I do gov't logistics for a living) and working around lawyers too long, but if you take possession of the ships just to be the first creditor in line -- if I'm any shipping terminal, I don't care about your creditor/collection standing for the fuel you're owed, I want you on the hook for the mooring, power, and other support services before you tie that 800 foot ship to my dock. If the fuel company has custody of the asset, then at least for now, seems to me they have to front the mooring and minimal crew costs even if they toss the anchor offshore somewhere like a number of other cruise lines. In other other words it's going to cost a lot more than $4.6 million to be first in line for money you may or may not ever see. Future potential judgment collection or recovery isn't worth spit at this point. Heck I can only imagine how much it cost just in legal fees to get to this point. I must still be missing something.
 
kthoennes said:
Maybe I'm too practical (I do gov't logistics for a living) and working around lawyers too long, but if you take possession of the ships just to be the first creditor in line -- if I'm any shipping terminal, I don't care about your creditor/collection standing for the fuel you're owed, I want you on the hook for the mooring, power, and other support services before you tie that 800 foot ship to my dock. If the fuel company has custody of the asset, then at least for now, seems to me they have to front the mooring and minimal crew costs even if they toss the anchor offshore somewhere like a number of other cruise lines. In other other words it's going to cost a lot more than $4.6 million to be first in line for money you may or may not ever see. Future potential judgment collection or recovery isn't worth spit at this point. Heck I can only imagine how much it cost just in legal fees to get to this point. I must still be missing something.
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Yes, but another side to this. The primary lender is going to want to take control of the boats. In order to do so, they'll want to take care of the arrest by the fuel provider.

Let's just use some totally random numbers. Mortgage is $100 million. Fuel is $5 million. Value is $30 million. Lender must take care of the $5 million to get in position to get $30 million.

Now, I don't know the details of any mortgage or other debts. I know the speculation the ships have no value, but I think they may still have some value.

And, as you state, all of this has great value to the legal community.

Lender needs to move quickly to preserve their interest, take control. They may have somewhere they want to move the ships, but they can't now do that until the fuel issue is resolved.
 
rslifkin said:
Strip for any valuable parts and sell the rest for scrap?
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First I guess you have to repossess the fuel and determine the fair market resale value. After that..... see if the owners' want to lose the rest of their ships. Then remove the engines and generators.... ask again.... finally the rest of the high value items.....
 
It`s like the car chasing dog. Surprise,we caught one. What to do with it?
At the very least it puts pressure on the owners. And it`s a message to all owners,not paying bills can have repercussions. Here at least, incurring liabilities while already insolvent has serious consequences for corporation and Directors.
 
Yeah, I caught a news article a couple days ago about that the Genting Hong Kong crash took down a couple German shipyards last month too.

https://www.maritime-executive.com/article/genting-s-german-shipyards-file-for-bankruptcy

Cascade effect. I don't see any sunrise on the horizon for the (remaining) cruise lines anytime soon either. We're cruise fanatics in normal times but vaxxed or not, it still sounds like an annoying, pretty awful experience to cruise. Q-tips up your nose all the time for testing, may or may not get into ports, testing or proof of vax for each landfall, crossing borders is a gamble every time, masks poolside, might get quarantined in your room or on shore, and then what they call "bubble tours" off the ship, so you don't mix with the locals. Unclean! Clear the road! No thanks, I'd rather go to the dentist. That's a great business recovery model.
 
kthoennes said:
Yeah, I caught a news article a couple days ago about that the Genting Hong Kong crash took down a couple German shipyards last month too.

https://www.maritime-executive.com/article/genting-s-german-shipyards-file-for-bankruptcy

Cascade effect. I don't see any sunrise on the horizon for the (remaining) cruise lines anytime soon either...
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Interesting article, thanks! I'd read some stories before, but it's a tangled web of interlocking, international companies. There's also the political side of the equation, with governments wanting to preserve jobs but also not be held hostage by the threat of job losses in bankruptcy.

I do see a sunrise for the industry. The problem is timing. If this Omicron surge turns out to be the last big one, things could go back to normal very quickly. There's a huge pent-up demand.

Like you, I'm more put off by the uncertainty and inconvenience then by fear of the getting sick. On a fully-vaxxed and tested ship, you're probably safer than in your home town. Even through the Omicron surge, infection rates aboard ship seem to have been lower than many places ashore.

Lots of folks are saying they'd never set foot on a cruise ship. But lots of folks said that even before the pandemic. People who like cruise ships were always a minority. But, I think, a loyal one. They'll be back, once things settle down into some sort of predictability.
 
CaptTom said:
Lots of folks are saying they'd never set foot on a cruise ship. But lots of folks said that even before the pandemic. People who like cruise ships were always a minority. But, I think, a loyal one. They'll be back, once things settle down into some sort of predictability.
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Good point. We always said we had no desire to get on a cruise ship. However, our reasons were directly applicable to what has happened. I always feared spread of infection aboard with Norovirus being the greatest fear and the lack of control to escape if infected. This ties to not trusting cruise lines and having lack of control of what happens with cruise ships starting cruises when hurricanes are approaching and continuing to other destinations or no destination just to retain revenues. Also, examples of things like sewage systems breaking and ships not going to nearest port but keeping you captive for days.

So, all my worst fears were captured in how they handled Covid 19. Rather than any chance to ever redeem themselves in my mind, they only deepened my mistrust for the industry.

So, perhaps before, there was a 10% chance of us ever taking a cruise, now it's a 0.000001% chance.

I do know loyal cruise ship customers and I do agree that one day many of them will be back. They'll forget this and then be disappointed next time the cruise lines show their true colors, but for them, the good still outweighs the bad.

I'm a bit of a germaphobe and was never a good match for a cruise ship but remember my mother and her sisters having the time of their lives on one. Our corporate offices have all touchless doors including the main entry to the building and all touchless fixtures.

It makes one think of what the new normal will be. Will cruise lines be more careful or back to business as before? What about airlines? I've been on many flights during cold and flu season that thinking back everyone would have been much safer with masks. In business it was common for those returning to town by plane to then be out sick. Will people be more responsible with flu and colds in not exposing others? Are buffets gone forever? Will we retain the ability to work from home when appropriate?
 
I never have quite understood the aversion to cruising based on disease exposure. Now crowds on the other hand, or frankly gross behavior on especially lower-end, high-volume cruise ships, being treated like cattle, obnoxious passenger behavior -- all that I get as aversions. But I'm sure we've all seen incredibly gross behavior on long haul flights, and to me air travel has always been far more disgusting, pre- or post-pandemic. I know I'm living in a state that almost never closed or disrupted anything so my perspective is skewed, but state fairs, major sports events, air travel, the subway in any major city, public bathrooms, 500 people groping the fruit in supermarkets (ironically and comically wearing masks), gas pump handles -- they're all potentially disgusting exposures. I've just never understood why cruise ships seem to trigger so much germ aversion when so many other things are just as gross, if not worse, and in confined spaces. But then risk perception is often highly subjective.

It's certainly something the cruise lines are going to have to overcome or address though, if they ever do hope to recover.
 
The cruise industry will not recover, in my life time.
Of course Columbus started his adventure in ships approximately 62X18 ft one of which sank which made the 2 remaining ships very crowded. LOL
 
IMHO, most cruise ships have gotten stupid big!

We have no desire, either pre or post covid to be on a ship with 6,000 other passengers. We would still like to do some Viking cruises (930 passengers on the ocean cruises and also do a river cruise.) However, I don't however see that happening this year and likely not next year either.

Jim
 
BandB said:
I always feared spread of infection aboard with Norovirus being the greatest fear and the lack of control to escape if infected...
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I contracted a Norovirus on a cruise ship once. Was out of commission for about 12 hours. I was fine after that. I'll spare you the details of the illness itself, in case it's meal time for any readers.

As it turned out, I caught it in the first wave. Only after I was sick did they start making announcements about it. They were very careful to limit the spread. Many of the same things we're all doing now; hand sanitation stations at every entrance and stairwell, lots of disinfecting, shutting down buffet lines, no shared menus or salt and pepper shakers at the tables, etc. Overall I thought they handled it very well. No doubt they'd run through these procedures before.

BandB said:
It makes one think of what the new normal will be. Will cruise lines be more careful or back to business as before?...
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I think they will be more careful. I doubt they want to be in the headlines again.

BandB said:
...What about airlines? I've been on many flights during cold and flu season that thinking back everyone would have been much safer with masks. In business it was common for those returning to town by plane to then be out sick. Will people be more responsible with flu and colds in not exposing others? Are buffets gone forever? Will we retain the ability to work from home when appropriate?
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I think all of the above, at least for a while. Note how mask wearing became common in Asia after SARS and other epidemics there. No doubt if we go another hundred years between pandemics, people will have forgotten - again.

JLD said:
IMHO, most cruise ships have gotten stupid big!
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I haven't been on the largest new ships. But even the 2,000 passenger ships I've been on could be enjoyable. The trick is to be a contrarian. When everyone is crammed poolside like sardines, working on their sunburns, we're down below in the air conditioning. At night when they're all in the bars and casinos, we're up on deck enjoying the stars. We'll take some organized shore excursions, but usually just wander on our own or take a local taxi in ports of call.
 
We boaters may not like cruise ships but we are the vast minority.
 
JLD said:
IMHO, most cruise ships have gotten stupid big!

We have no desire, either pre or post covid to be on a ship with 6,000 other passengers. We would still like to do some Viking cruises (930 passengers on the ocean cruises and also do a river cruise.) However, I don't however see that happening this year and likely not next year either.

Jim
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Yet Crystal was the premium, small(ish) group cruise line. Look how that turned out...
 
twistedtree said:
Yet Crystal was the premium, small(ish) group cruise line. Look how that turned out...
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I'm not sure how the other lines have continued to get the funding they needed. Amazing to me. Crystal had no other places to turn. Genting Hong Kong was bankrupt and no one to borrow from. Now that Genting's Cruise Line is dead, it will be interesting to see which of their resorts follow along. They will protect areas like Malaysia, but I don't see them protecting Bimini.
 
To add a piece of information. Crystal owes $100 million to customers for their down payments.
 
Guess they're not getting their money back anytime soon.
 
Well, that's that, I guess. So much for that anniversary cruise. It would be nice to see some of our deposit returned, but I think Delta is right on this: it won't be soon, if ever. If we do get any back, I've got some saloon cushions that need a makeover. A bit of a refresh, add some champagne, and will be just as good, right? Cruising on the Mississippi should be just like the Danube, right?

It will be interesting to see how (or if) they wrap things up with the customers and travel agents. The only reason I knew what was going down was because of this forum. We haven't had any communication from Crystal. In any case, I feel so bad for the employees and crew that are suddenly without jobs and possibly stuck far away from home. Not sure if this has been posted yet, but is a good read: https://www.seatrade-cruise.com/finance/crystal-cruises-done-assignee-appointed-handle-liquidation
 
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