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What recourse do I have if I'm owed a free cruise on a line that went bankrupt?

Dear Anita,

I was on the doomed Crown Cruise Lines Crown Dynasty, booking 93596, on Saturday, March 11, 2000. Our charter airline had mechanical problems that delayed us getting to the ship in Aruba from Tampa. Needless to say, the ship sailed without 118 of us, and it was not until very late the following Monday night at another port that we got on the ship. Plus we went through hell to get on the ship considering the spring break shore inconveniences we encountered.

The reason I am writing you is that Crown/Commodore offered us two free cruises (no refund) that was to expire on March 31, 2001. Well, the line folded into Chapter 11 in December 2000.

Do I have any options? Do you think the cruise lines will re-surface? I truly have not given up hope. As a matter of fact, I was in contact with Mike Smith at Crown, attempting to re-book a March 2001 cruise. I know now why they would not confirm anything for me.

Thank you for any reply,

Marcy H.

Dear Marcy,

This is a very complex issue. To find out if you have any recourse, I contacted Mark Pestronk, a Fairfax, Virginia-based attorney specializing in travel law and Travel Weekly columnist. He states, "Whether a voucher holder is a creditor in bankruptcy is a complicated question of bankruptcy law, Federal Maritime Commission (FMC) rules, and bonding law."

The FMC has a certified bond program covering a company with a maximum of $15 million. However, passengers booked on ships sailing from non-U.S. ports are not covered. While the FMC administers the program, the cruise lines, or their underwriters, process claims. My attempts to contact Commodore were unsuccessful. The best suggestion is to fax a request for compensation to Commodore Holdings (Parent Company of Crown Cruise Line) at 954-967-2148. You can also call them at 954-967-2100.

Watch for Red Flags

Long before Commodore Holdings filed for Chapter 11 bankruptcy protection, there were warning signs. Financial difficulties at Commodore Holdings became evident last June when the company's filings to the Securities and Exchange Commission (SEC) showed a net loss of $14.4 million (for nine months ending June 30). This was a surprising development since the company posted a $2 million profit for the same period in 1999.

When it purchased the Crown Dynasty for $86.2 million in January of 2000, the company acquired a lot of debt. It also lost a revenue source by canceling the Enchanted Sun (another vessel it chartered, which was cancelled due to technical difficulties). The company was expanding too quickly, and so, it declared bankruptcy in December 2000.

Protect Your Vacation Investment

The best protection for any cruise consumer is to watch for red flags—even after booking the cruise. This is especially true for trips on smaller, less established cruise lines. One good way to find warning signs, besides seeking the advice of a cautious, well-informed travel agent, is to seek the experiences of other travelers via message boards on the Internet.

For your best protection against possible bankruptcy, always pay for your cruise by credit card. Moreover, third-party travel insurance (available from your travel agent) is a precaution against supplier bankruptcy. If you purchase the optional insurance offered by the cruise lines, you will not be covered if the cruise line goes into default.


I hope I've been helpful. Happy travels!

Anita Dunham-Potter

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