What If NCL files for bankruptcy? And we have cruises book ?

[Love my butler]

1 hour ago, Comi.uy said:

Problem with NCL is that it probably wont get any government bailout if things get really bad...

Are you sure?  Norway would most likely step up.  They cannot let their namesake cruise line fade away...

[ano]

3 minutes ago, Love my butler said:

Are you sure?  Norway would most likely step up.  They cannot let their namesake cruise line fade away...

The fact that cruise lines register in other countries to skirt US employment laws and taxes doesn't bode well to a bailout by US taxpayers. 

[manorf]

In the UK - do a chargeback now if you are due a refund - you will get 100c in the S.

[joeyancho]

Generally in a bankruptcy you would be considered a creditor.  The point to a bankruptcy is get rid of creditors. Now if the honor you cruise credit it would be out of the kindness of their heart. 

[rjm11]

would our insurance (purchased through a third party, not NCL) cover these costs if NCL went under?  I would think it would.... but it's not specified in the policy.

[spanishguy1970]

44 minutes ago, ano said:

The fact that cruise lines register in other countries to skirt US employment laws and taxes doesn't bode well to a bailout by US taxpayers. 

hear hear. They are the last ones who should be getting a bailout.

[Dolphin-dan]

What would happen to their ships? 

[Liljo22]

4 minutes ago, Dolphin-dan said:

What would happen to their ships? 

If they did file bankruptcy, I would be surprised if its Chapter 7(liquidation).  They would reorganize and renegotiate their debt.  They would not lose any ships because they would fall under bankruptcy protections.  

[EllieinNJ]

I remember reading somewhere that if you do a chargeback you are banned for life.  That might be a moot point if NCL goes bankrupt.

[BirdTravels]

4 hours ago, Isabella Benjamin said:

It's going to be fine, Francina.  These cruise lines are not going away.  It is not like cruising is a dying industry in any way. 

While they are not "going away", bankruptcy is an easy way to reset at your expense. 

 

We unfortunately have one Haven booking (normally we have 2 or 3 cruises booked for the next few months, but fortunately had not got around to booking our year's worth of cruises yet). We consider our one Haven booking a write off at this point. 

Edited March 18, 2020 by BirdTravels

[njhorseman]

1 hour ago, manorf said:

If you are in the U.K. - you simply contact your credit card - visa / mastercard and open a dispute / chargeback. I have done this and will be refunded by my bank.

That is how it works under normal circumstances in the US too, but we're talking about what would happen in the event of a bankruptcy of a major corporation.

[njhorseman]

1 hour ago, Love my butler said:

Are you sure?  Norway would most likely step up.  They cannot let their namesake cruise line fade away...

Surely you wrote that tongue-in-cheek...

[spanishguy1970]

2 minutes ago, EllieinNJ said:

I remember reading somewhere that if you do a chargeback you are banned for life.  That might be a moot point if NCL goes bankrupt.

 This is a pandemic that no one wanted and is out of our control. We would have loved to go on our cruise but alas is not the case. When this is an emergency contracts should be null and void and NCL should not have control of what they do with our money. I find that clause or requirement that you MUST book a new cruise by 2021 in order not to lose your FCC ridiculous. Some of us want to take our time and not feel we have to book anything right now, specially since it has been stated that this could last for a whole year to 18 months.  IMHO

[njhorseman]

8 minutes ago, Liljo22 said:

If they did file bankruptcy, I would be surprised if its Chapter 7(liquidation).  They would reorganize and renegotiate their debt.  They would not lose any ships because they would fall under bankruptcy protections.  

Not necessarily. The debts incurred to finance the ships are secured by the ships themselves and in the event of a Chapter 11 reorganization creditors may or may not agree to let the cruise line keep them. It depends on the agreed-upon reorganization plan. In the event of a Chapter 7 the newer ships are almost surely going to become the property of the creditors. Heck, even one of the recent lines of credit secured by NCL to help weather this crisis is secured by the Epic.

[njhorseman]

51 minutes ago, rjm11 said:

would our insurance (purchased through a third party, not NCL) cover these costs if NCL went under?  I would think it would.... but it's not specified in the policy.

I've seen many  policies that cover bankruptcy of the cruise line. In fact it's one of the major reasons to purchase  trip cancellation coverage from a source other than the cruise line.

[em-sk]

3 hours ago, njhorseman said:

If a company goes into bankruptcy, either being restructured or liquidated you are going to be an unsecured creditor waiting on line...and you're going to be far down the queue. The credit card companies should not be legally on the hook for that money because the bankruptcy and the order of who gets paid and how much is under the control of the court.

 

I thought in most countries it was the acquirer bank that is responsible.  They will obliviously do a chargeback for the various transactions.  The acquirer bank is then the creditor that goes after them in bankruptcy court.

[complawyer]

7 hours ago, Ptroxx said:

What’s everyone thoughts on this ?   
what do you think would happen if you have a paid in full cruise?? 
I have a May 2nd cruise and starting to worry a little bit with the market dumping as it is. NCL is now down to $7.xx A share.  
 

what’s everyone thoughts.  

pure speculation on my part, but i would imagine if ncl declares bankruptcy we would be like any other creditor "SOL".  however, it seems we all traded information for the past few weeks, maybe we could try and get together and file c class action suit. it may not work as the coronavirus was not forseeable, but maybe better than just kissing our money bye-bye.

 

On the positive side, ncl has a large fleet of ships and each one has an intrinsic monetary value. Also if you remember the last time major corporations had a financial crisis i think it was in 2008 the govt stepped in with a bailout. i dont think they would let ncl go under.

 

again, i dont have anymore information then thenext person, these are just my thoughts trying to respond to your question.

 

i have, however, gone by my personal mantra " ncl doesnt give away ice cubes in winter"

[npcl]

6 hours ago, Isabella Benjamin said:

I do not believe they will go bankrupt.  Let's say the worst case scenario is that they have to dock their ships for up to a year.  They just took out a really big loan to help with the overhead expenses.  

 

At the point where people can start getting vaccinated, whenever that happens, people who have proof they've been vaccinated or proof they've had the virus would be free to cruise again.

 

I believe NCL is prepared for the worst case scenario.  Those ships are just worth too much money for their lenders to let them fail.

The loan is a drop in the bucket compared their current liabilities.  Might hold them over for 3 months, if they hold on to customer deposits.

[npcl]

The odds are if NCLH were to declare bankruptcy, it would be a financial restructuring, not a full company failure.  This situation is unusual in that you have a business interruption where lots of assets exist, but where it would be very difficult to sell those assets for anywhere near fair value.  The banks and debt holders know that if it gets past the cash crunch of the virus that it would once more be a profitable and viable company.  Those that totally fail are usually those for which their is no path to future profitability, not the case with the cruise line companies.

 

So if the company decides that they cannot meet their debt schedule, the most likely action would be to declare BK, but have worked out a recapitalization plan with their creditors in advance.  In that case share holders would be wiped out and the stock would have zero value.  But the company would issue new shares, the debt holders would trade their debt, plus additional money for stock in the restructured company.  In that case the customer deposits and the FCCs would probably remain intact.  After all no reason to restructure the company if you then turn around and alienate the majority of your customer base.  The company would not survive that. 

 

This is similar to what some of the major airlines have done in the past. There are plenty of examples where airlines have recapitalized in BK, wiped out the stock and debt, reworked contracts, but left all purchased tickets and even airline mile accounts intact. With customers you have a business.  Wipe out the tickets and miles and you lose your customer base, in which case you might as well liquidate.

 

Of course in doing this the company would make changes to make itself financially more efficient.  It might cancel new builds, it might get rid of some old ships, etc. 

Edited March 18, 2020 by npcl

[anyman]

4 hours ago, njhorseman said:

You're overlooking the part of the article discussing debt to earnings ratios, which could quickly become unmanageable, more so for NCL and Royal than Carnival. If it gets to the point where the companies can't meet their debt service requirements then their existence as currently structured is in danger. 

 

May be true if the banks wanted to take back the Ships, which I can't image they would. So it

It make more sense for the banks to agree to restructure the debt, and allow NCL to stay in business.

[anyman]

4 hours ago, njhorseman said:

You're overlooking the part of the article discussing debt to earnings ratios, which could quickly become unmanageable, more so for NCL and Royal than Carnival. If it gets to the point where the companies can't meet their debt service requirements then their existence as currently structured is in danger. 

 

May be true if the banks wanted to take back the Ships, which I can't image they would. So it

It make more sense for the banks to agree to restructure the debt, and allow NCL to stay in business.

[anyman]

4 hours ago, njhorseman said:

You're overlooking the part of the article discussing debt to earnings ratios, which could quickly become unmanageable, more so for NCL and Royal than Carnival. If it gets to the point where the companies can't meet their debt service requirements then their existence as currently structured is in danger. 

 

May be true if the banks wanted to take back the Ships, which I can't image they would. So it

It make more sense for the banks to agree to restructure the debt, and allow NCL to stay in business.

[anyman]

Sorry for multiple posts

[npcl]

57 minutes ago, njhorseman said:

Not necessarily. The debts incurred to finance the ships are secured by the ships themselves and in the event of a Chapter 11 reorganization creditors may or may not agree to let the cruise line keep them. It depends on the agreed-upon reorganization plan. In the event of a Chapter 7 the newer ships are almost surely going to become the property of the creditors. Heck, even one of the recent lines of credit secured by NCL to help weather this crisis is secured by the Epic.

NCL is a bit different from RCL and CCL in that a lot of NCLH's debt is secured loans tied to the ships, this is different from CCL where all of its debt is unsecured and not tied to any of its ships.  RCL does have some secured debt but most of their ships do not seem to be tied to any loans.

[Love my butler]

2 hours ago, ano said:

The fact that cruise lines register in other countries to skirt US employment laws and taxes doesn't bode well to a bailout by US taxpayers. 

US taxpayers don't fund the country of Norway.