Clipper City will sail on ? for now.
Legal troubles continue for the beleaguered Clipper City Cruise Lines as its owner was forced to file for Chapter 11 bankruptcy protection in federal court to protect the business from its principal creditor, Regal Bank of Owings Mills.
U.S. Marshals seized the tall ship on Friday and its afternoon sails were halted. Signs were strung over the swing door on the boat?s side announcing it was under U.S. Marshal control.
The ship also owes Maryland a $44,589 tax lien stemming from more than $30,000 in back taxes plus interest. The owners are paying the state $1,800 a month.
The bankruptcy filing follows Regal Bancorp?s victory on Friday in U.S. District Court to take control of the ship and begin foreclosure proceedings. It also gives owner John Kircher a little breathing room to continue operations.
“The actions taken by Regal requiring this response are unfortunate,” Kircher said in a statement. “We are just now at the beginning of our charter season and are on track to have our most successful season ever. We will operate as normal according to our published schedule for the April-October season and our clients, guests and those who charter will have the best experience on water available in Baltimore.”
“Regal Bank does not comment on pending litigation,” said bank attorney J. Stephen Simms of the Baltimore law firm Simms Showers LLP. “Clipper City has owed $750,000 to Regal Bank for a number of months. Regal Bank will pursue its rights in U.S. bankruptcy court.”
Calls to Regal Bank were not returned.
Clipper City runs cruises around the Inner Harbor. Kircher, who says his 2007 bookings are significantly ahead of 2006, hopes that increase will help the company recover from Chapter 11 successfully.
Under the rules of Chapter 11, Clipper City will restructure its debt while it continues to operate normally.
