Friday, August 13, 2010

Atle Brynestad-Related Companies File for Bankruptcy - SeaDream Yacht Club Supposedly Unaffected and Doing Well

Last year was rather tumultuous for SeaDream Yacht Club. 

The financial problems of the person controlling its interest, Atle Brynestad, resulted in Larry Pimental (now heading up Azamara Club Cruises - formerly a part of Celebrity Cruises, but now operated as a separate brand under the Royal Caribbean flag) departing purportedly as a result of Brynestad sucking SeaDream's revenue stream to fund his other failing business.  This added to the economic downturn...and the souring of the charter market (who wanted to be seen chartering a cruise ship...even if it was a small one)...and SeaDream was under huge stresses.

With SeaDream being run at a profit - or at least not as a huge cash drain - and the marketing disaster of being owned by a corporation (CG Holdings) which was teetering on bankruptcy, SeaDream was transferred to another company, Three Norske Group (obviously still controlled by Brynestad). 

That, it would seem, was a very good idea for yesterday CG Holdings and two other Brynestad-related companies filed for bankruptcy.

But, and I am putting my lawyer hat on here, that is not necessarily the case.  We actually have very little idea as to the actual structure and, to be sure, if any of the CG Holdings creditors are going to be looking hard at SeaDream Yacht Club as an asset which was transferred in anticipation of a bankruptcy or to otherwise insulate an asset from the legitimate claims of CG Holdings creditors.  (If I were a betting man I would think the creditors have already drafted those claims.)

That said, Bob Lepisto, SeaDream Yacht Club's president has been quoted as saying the bankruptcy of Brynestad's three other companies, "in no way affect SeaDream Yacht Club or other companies that are part of the Three Norske Group".  He has also been quoted as saying that SeaDream is doing "very, very well" in 2010.  According to Travel Pulse, a trade publication, Bob Lepisto also stated, "Some of our business is based on full-yacht charters, so our current outlook is that 2011 will be even better than 2009 or 2010. And clearly, 2009 and 2010 were good, profitable years for us.”

In Australia, an unidentified spokesman claims that SeaDream's bookings for the next 12 months are better than last year's and that the Australian office has just finalized its fourth full ship charter and has recently signed a 25 cabin partial ship charter, claiming almost 10% of SeaDream's overall business.

So there seems to be some very good news in relation to SeaDream Yacht Club, but I would not be popping the cork just yet.  It sounds like a valuable asset to me...and I am not one of those creditors.

What does that mean for you, the cruising public?  I am not sure it means much more than it is interesting.  No creditor is going to want to screw up a good thing and, to be sure, SeaDream is a good thing (if you like that type of product). 

Assuming you are not the subject of a partial charter, or large family gathering, SeaDream provides an excellent small ship, casual experience, based on high quality cuisine and service in generally less traveled ports of call (many not actually being ports, but anchorages!).  If you want the downside to SeaDream (assuming you make sure your cruise is not overwhelmed by others on these 112 guest yachts): smaller cabins and no balconies. 

However, as this is an "on deck, in the water and on shore" type of cruising experience, SeaDream has a very loyal following and for good reason.