Over the weekend, the captain of the Miami-bound cruise ship Crystal Symphony told its passengers that they wouldn’t be ending their journey in Florida as planned. Instead, they would be making an impromptu detour to the Bahamas.
The Crystal Symphony was on the run from the law, sailing to a jurisdiction that wouldn’t enforce a U.S. arrest warrant issued by a U.S. judge.
On Thursday, U.S. District Court Judge Darrin Gayles in the Southern District of Florida ordered that the Crystal Symphony be seized upon its arrival in Miami due to unpaid fuel bills of $4.6 million. To escape the looming impoundment, the ship, carrying at least 300 people, changed course to Bimini in the Bahamas.
Even as passengers on the cruise scrambled to determine how they might get home, they appeared to take the diversion with some amount of good grace. Elio Pace, an entertainer contracted to perform on the Symphony, told the Daily Mail that “there’s no panic, there’s no tantrums going on.” Steven Heard Fales, a playwright and actor, posted on Facebook, “We all feel we were abducted by luxurious pirates!”
The fugitive cruise ship is connected to a massive corporate bankruptcy on the other side of the world. Crystal Cruises’ parent company Genting Hong Kong is preparing for liquidation, which would either lead to a debt restructuring to keep the cruise operator a going concern, or the sale of some—or all—of its assets to satisfy creditors.
Genting Hong Kong, like most cruise companies, has struggled since the COVID pandemic began. In August 2020, Genting Hong Kong said it would suspend all payments to creditors in an effort to shore up liquidity amid the COVID crisis.
Other major cruise operators have resumed sailings as pandemic restrictions ease (the U.S. CDC’s recommendations against cruise travel notwithstanding). But Hong Kong’s ultra-strict COVID-zero policies, which halted even limited “cruises to nowhere,” have hampered Genting Hong Kong’s recovery.
On Jan. 10, Genting Hong Kong’s Germany-based shipbuilding unit, MV Werften, announced it was insolvent after negotiations with the German government for a rescue package failed. The insolvency triggered a cross-defaulton $2.78 billion in debt.
Then, on Jan. 19, Genting Hong Kong revealed that it had filed a winding-up petition with the Supreme Court of Bermuda. Negotiations with the company’s creditors—which, according to Bloombergdata, include major banks like BNP Paribas S.A. and Credit Agricole S.A.—had failed and Genting Hong Kong was likely to run out of cash by the end of the month.
That same day, Singapore-based Peninsula Petroleum Far East, a Genting Hong Kong creditor that sells bunker fuel to cruises, filed a lawsuit asking the Florida district court to seize the Crystal Symphony to help reclaim money it was owed from Genting-owned cruise ships. Judge Gayles ruled in Peninsula’s favor.
Genting Hong Kong is part of the Genting Group, best known for its resorts and casinos in Southeast Asia and developer of the recent $4.3 billion Resort World Las Vegas. Genting Hong Kong was founded in 1993 by chairman Lim Kok Thay as an effort to diversify Genting’s portfolio away from gaming and resorts by breaking into the cruise industry. Lim Kok Thay resigned as chairman and CEO of Genting Hong Kong on Monday.
Genting Hong Kong acquired Crystal Cruises in 2015 for $550 million from Nippon Yusen Kabushiki Kaisha, to expand further into the cruise market. It also owns Star Cruises and Dream Cruises.
Genting Hong Kong and Genting Group did not immediately reply to a request for comment.
Crystal Cruises in a statement on Jan. 19 said it was cancelling all ocean sailings through April, due to “recent developments with our parent company, Genting Hong Kong.”
Passengers on the Crystal Symphony eventually disembarked in Bimini in the Bahamas, where Crystal Cruises paid for a night’s stay before chartering a ferry to take passengers to Fort Lauderdale, thus ending the passengers’ brief diversion.
Crystal Cruises admitted in a statement provided to Fortune that the trip back to Florida was “uncomfortable due to inclement weather.” According to cruise-tracking data, the Crystal Symphony is still docked in the Bahamas.
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