Dream Cruises files
for bankruptcy

The U.S. Marshals Service recently
seized the company’s ships in
a legal dispute

Dream Cruises, plagued by two passenger deaths and the seizing of its whale-watching boats by the U.S. Marshals Service, filed for Chapter 11 reorganization yesterday to give itself some breathing room.

"The filing is intended to allow us to regain our boats so we can continue normal business operations," said Mike Watson, president of Aquamarine (Hawaii) Inc., the operator of Dream Cruises.

The U.S. Marshals Service seized the boats last week at Kewalo Basin after lender General Electric Capital Corp. said in two U.S. District Court lawsuits that Aquamarine had made no payments on a three-year loan.

Watson said he filed for bankruptcy because GE Capital refuses to accept what Aquamarine believes is a reasonable repayment schedule.

"We unfortunately have no choice but to ask for the court's intervention," Watson said. "We are requesting the court to order the return of our boats to us in the next few days."

Dream Cruises has been using replacement vessels since the American Dream and Kona Dream were seized.

Watson said the company will honor all tickets for its cruises and business operations will continue uninterrupted. The company is in its second strong year of growth, and the filing will provide needed relief, he said.

The 10-year-old company has been beset by a string of bad luck since Christmas 2003, when a 3-year-old Virginia boy died of head and neck injuries after the American Dream collided with a humpback whale off Diamond Head. The boy's family reached a settlement with the tour operator last year.

Last month, a 22-year-old tourist from Japan jumped into the ocean and died during a whale-watching excursion off Oahu.

Dream Cruises, based in Honolulu, offers whale and dolphin watching, snorkel and water activities, and sunset cruises from Oahu and the Big Island.

Watson said he hopes that Aquamarine can be out of bankruptcy by summer and "emerge a better, stronger company."