Posted on: Saturday, March 19, 2005

Cruise line files for bankruptcy

Advertiser Staff

Honolulu-based Dream Cruises said it filed for Chapter 11 bankruptcy protection yesterday, citing a dispute with one of its creditors.

The filing follows the seizing of Dream Cruises' two tour boats by the U.S. Marshals Service because the company was in default of a $1.4 million mortgage on the vessels. It has been using replacement vessels since then.

The company operates whale and dolphin tours, snorkel activities and sunset cruises on O'ahu and the Big Island.

The boats were seized when one of its creditors, General Electric Capital Corp., ended loan repayment discussions, the company said in a news statement released yesterday. The company said it will continue business operations and will honor all tickets for its cruises.

"This filing is intended to allow us to regain our boats so we can continue normal business operations," said Mike Watson, president of Aquamarine Inc., which operates Dream Cruises. "Because GE Capital refuses to accept what we believe is a fair and reasonable repayment schedule, we unfortunately have no choice but to ask for the court's intervention.

"We are requesting the court to order the return of our boats to us in the next few days. ... We hope to be out of bankruptcy — and emerge a better, stronger company — by this summer."

GE Capital officials could not be reached for comment last night.

The company said it suffered substantial losses because of Sept. 11, the Iraq War, SARS and other events that disrupted the visitor industry and since then has been working to renegotiate payment terms with its creditors.