Cruise line caught off guard by court action
Crystal Cruises was left to fend for itself after its parent company sought court protection in Bermuda, the luxury line’s former president has disclosed.
The operator of three ocean cruise ships and five river ships closed its offices on February 11, a week after the Crystal Symphony and Crystal Serenity cruise ships were seized in waters off Freeport, Bahamas, owing to unpaid fuel bills.
Crystal Cruises ceased operating just three weeks after the Supreme Court of Bermuda appointed joint provisional liquidators to assist Bermudian-registered Genting Hong Kong Limited with a restructuring of its indebtedness. A winding-up petition had been filed by Genting HK.
In February, another Genting HK subsidiary, island-based Dream Cruises Holding Limited, sought and received a similar order from the Bermuda Supreme Court.
DCHL, an investment holding company incorporated in Bermuda in 2015, operates a fleet of three cruise ships.
Lawyer Lilla Zuill, representing DCHL, told the court that Genting was the “primary source of operational funding” for DCHL.
Jack Anderson, president of Crystal Cruises until the company shut up shop, told Bloomberg: “Genting HK effectively washed their hands of Crystal when they filed liquidation in Bermuda.
“At that point our relationship with Genting was effectively severed, and we were cut loose to fend for ourselves.”
The end came swiftly with Crystal’s approximately 100 land-based staff given just 48 hours notice that the company offices were to close.
Anderson told Bloomberg: “There wasn’t even time for an official statement.”
Crystal’s closure has left a trail of debts in its wake; money is owed to travellers who paid deposits for future cruises, to agents for booking commissions, to land-based and ship staff, and to unpaid vendors.
Launched in the 1980s, Crystal Cruises was among the most prestigious of cruise lines, and regularly lauded by industry and travel publications.
The line launched the 848-passenger Crystal Symphony in 1995 and the 980-passenger Crystal Serenity in 2003. It also operated the 200-passenger expedition ship, Crystal Endeavour.
All three ships are now being managed by V. Ships Leisure. The line was acquired by Genting HK in 2015.
In the Genting HK hearing in January, Zuill said by way of background that in early 2020, the group had steady revenue and expansion plans but since then has been “severely impacted by the Covid-19 pandemic”.
The lawyer told the court then that the impact of a recent insolvency filing in Germany was the “trigger for the application made this week” as it resulted in the company’s “inability to access some funds it previously expected to draw down and has created a cash crunch for the company”.
That insolvency, of the Genting HK-owned shipbuilding company MV Werften, has had a profound impact.
By February 11, Crystal’s financial situation had hit rock bottom.
Anderson told Bloomberg: “Ultimately, we ended up with a bank account of zero.”
The Crystal Serenity was due to visit the island in May.