The operator of the Port of Palm Beach’s sole passenger ship, laboring under more than USD 30 million in debt, filed for protection from creditors Monday in U.S. Bankruptcy Court.
The day-cruise gaming ship Palm Beach Princess, which supplies nearly 13 percent of the port’s gross revenues, will continue its 14 trips per week as the company seeks to reorganize, ITG Vegas Inc. president and CEO Francis X. Murray said Tuesday.
The Chapter 11 filing, on behalf of the casino line and related companies, listed USD 33’million in debt and USD 3.2 million in assets.
The filing followed by three weeks a lawsuit by creditor PDS Gaming Corp. and by three days a decision by the revenue-strapped port to allow a competitor company’s gaming ship to start service from an adjacent berth. ITG officials said the creditor suit forced the company to seek protection from bankruptcy court, and that the port decision didn’t help.
The PDS suit, filed Nov. 14 in Palm Beach County Circuit Court, claimed the cruise line and related companies defaulted on more than USD 38.6 million worth of loans. The suit sought to force a speedier sale of the group’s two other ships, the mothballed Big Easy and Royal Star.
PDS attorney David Weitman of Hughes & Luce LLP in Dallas said the filing would be „helpful,“ in that it probably would encourage bidders for the idle ships. „It will also be helpful to have the type of transparency and disclosure that comes with a chapter proceeding, where the principals will be held accountable and will have to explain their actions before the court and creditors,“ he said.
While the company restructures „for stability and future growth, … it is business as usual,“ Murray said.
The company intends to pay its 400 employees what they are owed this week, with bankruptcy court approval, and intends to pay all vendors all that they are owed, he added.
Port Executive Director Lori Baer said she is consulting with the port’s attorneys on the development. „It doesn’t appear that it has any immediate impact on the operations of the Palm Beach Princess,“ she said.
The port and the Murray companies are tangled in two lawsuits. In one, the port is seeking to establish its rights to the berth that the casino line’s Big Easy ship vacated earlier this year and is claiming the line owes USD 150,000 in unpaid electric bills. Meanwhile, the casino ship company is suing the port for tens of thousands of dollars to recover the cost of spare propeller shafts that the company was storing for future use and that, it said, the port disposed of.
Murray and the parent company of the Palm Beach Princess‘ related firms, International Thoroughbred Breeders Inc., also face a federal civil fraud suit by a group of Illinois investors. The suit, filed Nov. 13, alleges that they made a one-month, USD 400,000 loan to ITB in late October or early November of 2005 that was never repaid. Murray could not be reached for comment on that suit.
On Friday, the port’s board approved an operating agreement for Oceans Casino Cruises to operate a 165-foot, 600-passenger gaming ship out of the berth formerly occupied by the Big Easy. Oceans Casino, which does business as SunCruz Casino, hopes to start day cruises from the port in mid-January, its president, Robert Weisberg, said Friday.
Oceans Casino Cruises bought SunCruz out of bankruptcy in April 2004. The company, which operates out of six ports in Florida and South Carolina, expects to employ 150 people a day at the Port of Palm Beach, with an annual payroll of more than USD 3 million.
SunCruz was the line that helped sink Washington lobbyist Jack Abramoff. Abramoff, a former SunCruz co-owner, is serving a five-year, 10-month sentence stemming from his fraudulent purchase of the casino boat fleet in 2000. His plea agreement to testify about his corrupt lobbying practices put him at the center of one of the most far-reaching influence-peddling scandals in U.S. history. Investigations continue to implicate members of Congress and their aides.