The U.S. Bankruptcy Court in Miami has granted a request by Sea Escape Cruise, Ltd. to file a plan of reorganization. SeaEscape, which filed for Chapter 11 this past spring, must first have its plan approved by its creditors' committee before it is finalized by the court. The creditors committee has 45 days for approval.
Jeffrey Tolk, who is steering SeaEscape's re-organization, showed the court that by giving SeaEscape more time, the line could possibly succeed. Obviously if the line does indeed become profitable, creditors will gain more than if the company dissolves.
Tolk reported to the Bankruptcy Court that the new team of directors have reduced the company's overhead by $220,000 per month. Changes include: cutting administrative personnel from 114 to 18; re-negotiation of food and beverage contracts for a savings of $5,000 per week per ship as well as re-negotiation of SeaEscape's casino revenue sharing agreement to a 70:30 share compared to the previous 60:40 share.
Carrying costs were also reduced with the court's approval to allow SeaEscape to charter the Scandinavian Song to Danish Cruise Lines which is planning to operate day cruises from San Juan to St. Thomas. The long-term charter relieves SeaEscape of more than $85,000 per month in carrying costs and includes a future purchase option.
This would help generate income so that the line can finish repairs on the Scandinavian Sun, which has been in wetdock since last spring.
Also pending is a charter for the Scandinavian Saga, previously and unsuccessfully chartered by California Cruise Line out of San Diego. According to a spokesperson, SeaEscape could not yet disclose the name of the charterer, which has to be approved by the court.
At present, SeaEscape is solely operating the Scandinavian Dawn out of Miami and Fort Lauderdale.
Tolk told the court that SeaEscape surpassed projected sales and occupancy figures for September. While projected revenue was set at $924,000, the line generated $1.38 million. Passenger counts of 29,443 exceeded the projected number by over 4,000, therefore achieving a 51.4 percent load factor compared to the anticipated 42 percent.
As of September 30, the line had more than $916,000 in October bookings, therefore achieving well over 60 percent of the projected ticket revenue for October. SeaEscape anticipated breaking even in October on operating vessels.