Commodore Holdings Files For Bankruptcy
Florida cruise company Commodore Holdings Ltd. is the latest cruise company to succumb to the crunch from a financial crisis, as it filed for Chapter 11 bankruptcy reorganization in late December and immediately was forced to suspend operation of its three ships. The Hollywood, Fla.-based company said it was unable to negotiate an agreement with its mortgage lenders in time to avoid canceling cruises aboard its ships the Enchanted Capri and the Enchanted Isle which sail out of New Orleans and the Crown Dynasty which sails out of Aruba. "We deeply regret having to take this action, but we had no other choice," Commodore CEO Fred Mayer said in a news release.
Commodore said it filed for Chapter 11 bankruptcy protection, which allows companies to reorganize while working out debt repayment plans. The company said it was "deeply sorry" for the inconvenience and was trying to contact passengers scheduled to sail at the weekend.
According to Hoover's company profiles, the holding company's Commodore Cruise Line owns three cruise ships and operates two others that sail on two-, five-, and seven-day cruises in the Caribbean and the Gulf of Mexico.
The 34-year-old company employs 1,300 workers and had 1999 earnings of $4.9 million on sales of $61.5 million. Commodore said that its financial troubles began in the spring, when logistic problems and changes in California gaming laws hurt bookings aboard its one-day casino cruises out of San Diego. It shut down that operation in June, but "the heavy costs associated with the project continued to affect its financial state," Commodore said.
"It's a major blow," said John Martin, a travel consultant with the Travel Machine Inc. agency in Lafayette, La., which works with Commodore to put together a yearly autumn cruise focused on dancing. "We're still swirling around here, trying to figure out what's going to happen."
The last year has been tough for smaller cruise companies like Commodore in an industry dominated by giants like Carnival Corp., Royal Caribbean and P&O Princess Cruises. Rising fuel prices and a glut of ships have tightened the squeeze. Premier Cruise Line, headquartered in Port Canaveral, Florida, halted operations in September when lenders seized its five ships. - (Reuters)
