Haimark Line has won a key ruling in bankruptcy court to
help it stay in business, and executives last week said they were optimistic
about an exit plan that would involve a new investor.
But meanwhile, the coastal cruise company has canceled
numerous cruises, and claims for refunds are piling up, as a result of an
insurance dispute with the ship’s owner following an accident in June on the
St. Lawrence Seaway.
Haimark won a reprieve on Dec. 4 when U.S. bankruptcy
judge Sidney Brooks agreed to let it use funds it had on deposit with a
Colorado bank to make escrow contributions. Cruise lines are required by the
Federal Maritime Commission to provide financial backup for future cruises in
case they aren’t sailed. One way to comply is to keep specific levels of money
in escrow until the cruises are taken.
Haimark asked for court approval to use $299,231 held by
Centennial Bank to meet its required escrow obligation. In filings in the U.S.
Bankruptcy Court in Colorado, Denver-based Haimark said the Maritime Commission
was threatening to take action if the escrow requirement wasn’t met.
The ruling also provides access to additional funds if
the escrow requirements increase. Escrow levels are recalculated weekly as
cruises are taken and future business is booked.
The interim decision is subject to a final hearing
scheduled for Jan. 7.
Haimark said in its motion that it has been forced to
cancel “numerous” cruises since it filed Chapter 11 on Oct. 30. Cancellations
included a Nov. 1 cruise between Trinidad and Nassau and a Dec. 2 sailing
between Cartagena, Colombia, and San Jose, Costa Rica.
A total of 152 customers have filed claims for refunds
totaling $779,267, according to a schedule filed with the bankruptcy court on
Dec. 1. Many are from individuals, but among those seeking refunds are some
tour operators, such as Boston-based Road Scholar for $57,262 and Alexander +
Roberts, of Keene, N.H., for $65,362.
Some customers are also instructing their credit card
companies to charge back their deposits. In a court motion, Haimark said
Bankers’ Bank of the West has been accumulating a claim for these charge-backs,
which are expected to continue.
When Haimark filed for Chapter 11, it cited a dispute
with the owner of its only ship, the 200-passenger Saint Laurent, which began
offering Great Lakes and coastal Canada/New England cruises in the spring.
The dispute was over insurance liability for a June
accident in which the vessel struck the approach wall of a lock on the St. Lawrence Seaway, causing several
injuries.
The Saint Laurent is owned by Clipper Group, a
Nassau-registered company based in Copenhagen, Denmark, that controls a variety
of cargo and passenger ships.
At the time, Haimark officials emphasized that the
Haimark Line bankruptcy did not affect Haimark Ltd., a company with common
ownership that operates river cruises.
Asked when Haimark Line might sail again, President Hans
Rood responded that the company “is in the final phase of getting the
bankruptcy resolved,” a process that has required Haimark to enlist a partner
“to support a shared effort in growing Haimark Line’s future.”
Rood said that Haimark hopes to have something to
announce on the bankruptcy and new partner in the next week or two.
Hanging in the balance are plans to offer scheduled
sailings to Havana from Miami beginning in February, some of the first between
the two cities in decades.