Troubled polar cruise company says it's $29.5M in debt
One Ocean Expeditions says it owes more than $100K to northern institutions
A troubled cruise company known for its polar tours has announced it is nearly $29.5 million in debt.
On April 17, One Ocean Expeditions asked for 30 days of protection from its creditors, according to public documents posted by PriceWaterhouseCoopers, the company's trustee.
In a letter to its creditors dated April 22, managing director Andrew Prossin said One Ocean Expeditions is in "an arduous, time consuming process of rebuilding."
Prossin, a company founder, thanked creditors who were "patient and understanding" of the company's woes. "It's part of the intangible that has and continues to help drive us through the storm," he wrote, adding he had "empathy ... for those understandably less tolerant of the challenges faced."
It's the latest instalment in a chaotic saga for the Canadian adventure cruise company — a saga that includes a collision against a rock in the Arctic Ocean, as well as arrests in Iqaluit and Buenos Aires.
In 2019, one of the ships One Ocean had chartered was arrested in Argentina for non-payment of debts.
Months later, after that ship was released (and was no longer chartered by One Ocean), it crashed into a Venezuelan navy vessel in waters near South America, according to its operator.
Meanwhile, the COVID-19 pandemic cratered the tourism industry, and federal officials halted the 2020 Arctic cruise season entirely.
Bankruptcy expert Aubrey Kauffman says in the current moment, cruise lines face an uncertain global climate. "I would think this company may end up in bankruptcy."
'Period of calm'
The company has filed a "notice of intention to make a proposal" to its creditors under the Bankruptcy and Insolvency Act. Kauffman, who is a professor of bankruptcy and insolvency law at Osgoode Hall in Toronto, told CBC this offers a "period of calm" during which the company will try to reach compromises with its creditors or look for someone to buy the company, using money from a sale to pay off creditors.
Should it reach the point of bankruptcy, he said, the company and any of its assets would be liquidated and the proceeds would be distributed among creditors.
Debts to northerners over $100K, filing says
The company said it also owes more than $100,000 to various northern organizations, airlines and communities, including Nunavut's tourism association, the hamlets of Pangnirtung and Pond Inlet, Summit Air, and the airline previously known as First Air (now Canadian North).
Travel Nunavut CEO Kevin Kelly said the association would be writing off the $7,150 in expenses that One Ocean owed. "It's just not worth our time," he said. "The ones I really feel bad for are the [northern tourism operators] that have offered them services."
Yellowknife-based Summit Air was listed as entitled to nearly $70,000, but a vice-president of the aviation company said the cruise company's balances had actually been paid off.
In an email, Canadian North spokesperson Dan Valin said it's owed for charter flights given to the cruise line, adding: "We wish One Ocean Expeditions well in recovering from this difficult period."
CBC contacted several of other creditors listed, including the New York Times Travel Show and WWF Australia, who declined to comment.
The Canadian Anti-Fraud Centre told CBC it had received five complaints against the company, excluding duplicate complaints. No criminal charges have been laid.
Unpaid debts to workers listed in filing
According to the creditor documents, the company owes 21 "various employee creditors" about $57,000. It also owes 220 contractors more than $1 million.
The company has been called out before for failing to pay workers.
In April of 2020, tourism guide Cody Nystrom said he got nearly $7,000 in back pay from his 2019 work in Antarctica with One Ocean — but only after an Argentinian court arrested one of the ships One Ocean had chartered, pointing to "significant debt."
However, Nystrom said it was the ship's owner who settled those debts, rather than the cruise company, so the boat could be released.
"I don't know how you get to the point where you owe so much money to everyone and just keep on putting a smile and telling everyone it's OK," Nystrom said.
On April 3, 2020, B.C.'s Employment Standards Branch found One Ocean Expeditions owed 24 of the company's B.C. workers $263,029 in wages, along with administrative penalties. That money has not been paid, the branch told CBC.
If the company goes bankrupt, workers can expect up to $2,000 of their back pay before the company pays off any secured creditors, such as banks that gave loans, Kauffman said. If the company can not pay the $2,000 to each worker, a government program will fill in the gaps.
Other creditors would be lower priority.