AMCV Files for Voluntary Petition, Reorganization Under Chapter 11

Monday, October 22, 2001
American Classic Voyages Inc., the largest U.S.-flag cruise company, announced on October 19 that it has filed a voluntary petition for reorganization under Chapter 11 Bankruptcy Code in Wilmington, Del.

The company has ceased operations for its Hawaii vessels, the ms Patriot and the ss Independence, following the completion of their last cruises. Four of the company's five Delta Queen vessels, including the American Queen, the Mississippi Queen, the Columbia Queen and the Cape May Light, also will cease operation at the completion of each vessel's cruise following the announcement. The Delta Queen steamboat, the company's National Historic Landmark flagship, will continue to operate its scheduled future voyages.

In addition, AMCV said it intends to work with Northrop Grumman Corporation and the U.S. Maritime Administration with the goal to maintain construction on the two 1,900-passenger Project America ships, the largest cruise ships to be built in America in nearly 50 years. "The tragic events of September 11 dealt a devastating blow to our business that has made it impossible to continue our full operations," said Phil Calian, CEO of American Classic Voyages.

"We will continue to operate on a much reduced scale to focus on our Mississippi River cruises, which have been the historic core of our company." In August, the company had reported increasing per diems and occupancy on its Hawaii ships, profitable performance on its Delta Queen vessels and that it had successfully reached an agreement with Northrop Grumman on the continuation of construction of the Project America cruise ships. In the four weeks subsequent to the September 11 terrorist attacks in New York and Washington D.C., the company said its gross bookings declined 50%, its cancellations increased 30% and it faced a weakened cash position with no prospects for additional capital at this time. "As a result of the September 11 attacks, the Chapter 11 filing became the only alternative to us to preserve our present cash supply, improve our balance sheet and minimize the impact, as much as we are able, on affected passengers and other stakeholders," Calian said. "We are grateful to our customers for their support and we are doing the best we can to assist those affected by this decision."

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