Progress made in Crystal claims process, but travel advisors must wait

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The Crystal Serenity when it sailed for the old Crystal Cruises.
The Crystal Serenity when it sailed for the old Crystal Cruises. Photo Credit: Crystal Cruises

Customers who lost deposits when Crystal Cruises folded last year could get at least some of their money back in 2023. 

But travel advisors owed commissions will have to wait until those payouts are completed to see how much is left. And the process is still ongoing.

That's according to Samuel Capuano, an attorney at Miami-based law firm Berger Singerman, which represents Mark Healy, the assignee tasked with liquidating Crystal Cruises' assets and distributing the proceeds to the line's creditors.

The legal process, known as the assignment for the benefit of creditors, began last February in Miami-Dade County and has been slow to settle the company's debts, with Healy vetting thousands of claims against the former luxury line. Creditors ranging from fuel suppliers to customers and travel advisors have filed more than 12,400 claims against Crystal since the line collapsed when owner Genting Hong Kong filed to wind up. 

Healy, who is tasked with liquidating the company's assets and distributing funds to creditors, is in the process of analyzing the claims, Capuano said. That process includes weeding out duplicate claims and reconciling claims that have been paid by other sources, such as credit card and travel insurance companies.

"Progress is being made, but this process takes time," Capuano said.

As such, there is no total dollar figure for the claims. And it is too early to estimate how much money will be available to pay creditors such as employees, travel agencies and customers, Capuano said.

Healy has collected more than $13 million through the sale of assets last year, Capuano said. That does not include the sale of the line's ocean, expedition and river ships, because they were not owned by Crystal Cruises. Healy is pursuing other assets, said Capuano, who could not predict whether those attempts would be successful. 

Once Healy finishes reviewing claims, he plans to ask the court to make an "interim distribution" to at least partially pay priority creditors, Capuano said. Priority creditors include "both consumer and employee wage creditors," who are entitled to priority status. Travel advisors are not in that priority mix, he said, as per statutory rules. 

Tom Baker, president of CruiseCenter in Houston, said he figured travel agents would be a low priority for the courts and the assignee. He said his agency is owed commission, but he has little hope. "It's sad that agents do seem to always get the short end of the stick in these matters," he said.

Dennis Nienkerk, an advisor with Strong Travel Services in Dallas, sailed and sold a lot of Crystal Cruises, and he had at least $6,000 worth of future cruise credits when the line folded. He believes that customers who put money down on cruises should be paid ahead of other creditors. 

"People who made deposits should be the first ones to get their money back, and I would think they would do that," he said.

There is an additional, albeit limited, safety net for some cruise passengers who were booked on Crystal departures from U.S. ports. The Federal Maritime Commission (FMC) will accept claims from customers once the assignment for the benefit of creditors process has been completed, said John DeCrosta, a spokesman for the FMC.

Those claims will be paid via an escrow account that exists solely for reimbursing passengers scheduled to embark from a U.S. port but whose cruise was canceled. And there's an additional requirement: Claims to the FMC can only be made for bookings made directly with the line. Those claims are limited to the cost of the voyage and do not include airfare, excursions and pre- or post-cruise lodging.

Abercrombie & Kent Travel Group acquired the Crystal Cruises brand, guest list and two oceangoing ships last year. The company plans to revive the brand this year, although the new Crystal Cruises has yet to publicly share itineraries or launch dates. The line is instead encouraging guests to make an open deposit to secure a space during its initial 2023 and 2024 seasons. 

Nienkerk said he was holding out hope that Crystal under A&K will allow him to apply his future cruise credits. 

But so far, the new Crystal does not have plans to honor deposits or future cruise credits from customers of its namesake. Instead, executives have hinted the line will offer other incentives during its inaugural season to rebuild trust with former Crystal customers, but the line has not yet provided details.

When Silversea Cruises acquired the Crystal Endeavor during the line's liquidation last summer, it offered to reimburse passengers booked on that expedition ship for their lost deposits if they booked a cruise with any Royal Caribbean Group line by last November -- although the reimbursement process will not begin until after the assignment for the benefit of creditors process is complete. Silversea did not disclose the number of guests who booked to take advantage of that program.

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