American Classic
plan gets nod

The former operator
of Hawaii cruise ships ms Patriot
and SS Independence is cleared
to pay unsecured creditors
up to 20% of claims

By Rosland Briggs Gammon
Bloomberg News

WILMINGTON, Del. >> American Classic Voyages Co., former operator of Hawaii cruise ships ms Patriot and SS Independence, won bankruptcy court approval for its plan to pay unsecured creditors as much as 20 percent of their claims.

Under the plan, secured creditors will be paid in full, while some unsecured creditors of the Chicago-based company and its units will receive from 3 percent to 20 percent of their claims. The plan also would reimburse customers seeking refunds on cruises that were canceled after the company sought bankruptcy protection in October 2001. Shareholders will receive nothing.

American Classic "is ready to start distributing money," said Josef Athanas, a lawyer for the company, during today's hearing.

Had the company not decided to shut down, creditors would likely have gotten nothing, Athanas said. American Classic filed for bankruptcy after the Sept. 11 terrorist attacks led to customer cancellations. Other cruise operators including Carnival Corp., the world's largest cruise line, reported as much as 60 percent drops in bookings.

U.S. Bankruptcy Judge Jerry Venters in Wilmington, Del., approved the plan today after creditors voted in favor of it.

Since filing for bankruptcy, American Classic has sold most of its assets, including three river steamboats, for $80.9 million in cash and assumed liabilities. At the time of its bankruptcy filing, it operated seven crewed vessels with 3,480 passenger berths.

Shares of American Classic -- run by billionaire Sam Zell -- traded over $35 in December 1999, but last traded at less than 1 cent yesterday in over-the- counter trading.

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