Posted on 02/18/2022 10:53:56 AM PST by Capt. Tom
The problems surrounding the demise of Crystal Cruises are becoming clearer by the day. And through it all, the financial issues could hit those who booked cruises onboard the Crystal ships harder than the company had initially forecasted.
According to the former CEO for Crystal Cruises, Jack Anderson, the company owes more than 100 million in outstanding deposits. This should pose no problem for those who paid by credit card for upcoming cruises. Those with FCC’s, which are now worthless, and those that paid cash for a cruise, will likely never see their money.
Genting Hong Kong Abandons Crystal Cruises One of the most celebrated cruise lines in the world was forced to close up shop last week, and through it all there has been very little to no communication to guests or travel agents. As the smoke rises, more and more details are becoming apparent.
The results are shocking and will certainly anger guests waiting for a refund. Genting Hong Kong effectively abandoned Crystal Cruises to fend for itself once the problems started.
“Genting HK effectively washed their hands of Crystal when they filed liquidation in Bermuda,” says Jack Anderson according to Bloomberg, who served as president of Crystal Cruises until Feb. 11. “At that point, our relationship with Genting was effectively severed, and we were cut loose to fend for ourselves.”
Through all of it, Genting Hong Kong maintained that there was no danger for Crystal Cruises, which turned out to be anything but the truth. The result? With cash run dry, thousands of guests are still waiting for their deposits, there is $4.6 million in outstanding fuel bills, and some crew members are still waiting to be repatriated from the company’s two luxury cruise liners in the Bahamas, the 848-passenger Crystal Symphony and 980-passenger Crystal Serenity.
100 Million Owed, Will Guests Ever See Their Deposits? Crystal cruises currently owe over 100 million dollars to guests in deposits and final payments. The majority of these payments will be returned to guests in due time. Those who paid for their upcoming cruises by credit card will be the lucky ones. According to Jack Anderson, the deposits are held by credit card companies in secured accounts and are eligible for refunds.
‘A significant majority of customer money is being held in trust by VISA, Mastercard and American Express’ — well over $100m. The court appointed Michael Moecker & Associates will be working with the credit card companies to approve refunds. Jack Anderson estimates 75% to 80% of customers paid for their cruises by credit card.
However, guests who paid for their cruises in cash or by bank transfer will not be so lucky. They will likely not see a single dollar from Crystal Cruises and will likely need to rely on their insurance providers.
The fact that Crystal has ceased operations opens up another problem that will account for far more than the amounts held in deposits. Guests who had their cruises canceled due to the Pandemic and who availed of a Future Cruise Credit will likely never see their money. There is no way to spend the FCC without cruise ships sailing, and any credits are now worthless.
The Crystal Website is still up and running and will be used to post information for guests to start the refund process; whether that will be in any way successful remains to be seen.
Crystal Cruises did not own the ships it operated; those were already in the hands of creditors as secured assets. What’s left is the furniture in the offices, the reserve accounts, and guest databases. Anderson: “Ultimately, we ended up with a bank account of zero.”
Billionaire Owner Walks Away Unscathed While Crew In Limbo Onboard While crew members wait in the Bahamas to hear news on their future, Billionaire owner and CEO of Genting Hong Kong walked away unscathed from the entire saga. Although he had to give up his position as CEO of Genting Hong, this seems to be more a move to continue doing business than a penalty of letting the company go down and putting thousands out of a job.
This was made clear when Lim Kok Thay announced to the court-appointed liquidator for MV Werften he would be interested in buying the Global Dream, a massive 9,500 passenger cruise ship under construction for Dream Cruises, which also came under Genting Hong Kong.
300-400 Crew members are still onboard, awaiting an uncertain time. The ships are managed by V-Ships in Monaco, one of the biggest management companies in the cruise industry. However, as long as the future of the vessels remains undecided, the crew’s fate hangs in limbo.
Staying onboard means potentially having a job if the ships are sold. Leaving the vessel means forfeiting a chance of a future position on ships that many have worked on since the beginning of Crystal Cruises.
Yet, if the ships are scrapped, those crew members will be out of work, no matter what. And that is maybe the most tragic result of all, especially considering many had been sitting at home for more than a year when they boarded the ships again last year.
Chrystal Cruises had their bank account drained by an undisclosed group.
Chrystal Cruises did not own the ships they were operating.
Cruise line bankruptcies can get very complicated depending on what countries are involved.
For example, in some countries the creditors are in line before the crew. In other countries the crews are in line before the creditors.-Tom
Executive officers of any entity declaring bankruptcy should get out of prison *only* after all debts are paid in full.
There should be horrific consequences, at least equal to armed theft, for *EVER* not paying every cent of every debt.
China’s economy is on the way down. Time to dump your Chinese stocks.
That might be so; but the big 3 cruise lines see China as an opportunity for cruising. Time will tell. -Tom
I recall Regency Cruise in 1995. Long list of creditors and at the end , those future passengers that paid their bill in cash, for a cruise that would never happen..
Some would call that tough luck
Some would call that grand theft
Bkmk Cruise
China will OWN the world IF we dont bring GOD back into this country.
Isn’t Genting a Malaysian company?
I did a cruise from Hong Kong to Singapore a few years ago. It was full of Chinese passengers.
The big three cruise lines, Royal Carribean; Carnival; and Norwegian; are interested in opening up that market. -Tom
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