Villa Vie’s founder told CBS News the company plans to file for Chapter 11 bankruptcy after it halted the Villa Vie Odyssey in Cambodia. Residents who paid big money for cabins still have no answers.
Villa Vie Residences plans to file for Chapter 11 bankruptcy, founder Mikael Petterson told CBS News on Oct. 28. The news comes one day after the Florida-based company suspended operations on its Villa Vie Odyssey residential cruise ship in Cambodia.
The ship was sold as a home at sea. Now more than 200 residents, most of them American, are on land in Sihanoukville.
What did Villa Vie say about bankruptcy?
Petterson told CBS News the company ran out of money while it searched for a financial partner. He said the plan is to file for Chapter 11.
“We’ve borrowed money, we’ve stretched our payrolls as far as we can,” Petterson told CBS. He said the company is “at a breaking point where we need capitalization.”
CBS called Petterson CEO. Other outlets call him founder or executive chairman, and Cruise Hive named Kathy Villalba as CEO.
As of Thursday, no court filing had been reported. The company’s Oct. 27 statement said Villa Vie would work toward “restructuring” and recapitalization over about 60 days, and that “no outcome is assured.”
Why did the Villa Vie Odyssey stop sailing?
The company blames fuel. Petterson said Villa Vie paid an average of about $700 per ton before the war with Iran began in late February. Since then, he said, it has paid $2,000 to $3,000 per ton.
Petterson said monthly expenses jumped from $400,000 to $2 million.
“When you divide it over 300 people on board, it’s just backbreaking,” he told CBS. “And this has been going on for nine months.”
The company said it chose not to pass the full increase on to residents. It slowed the itinerary instead and stayed five or six days in each port. That was not enough.
What happens to residents’ money?
That is the big open question, and nobody has answered it yet.
Residents bought permanent cabins for several hundred thousand dollars, and some sold their homes to do it, CBS reported. They were promised a minimum 15-year residency.
IBTimes UK reported that cabins were advertised from about $120,000, with pricier options available.
Villa Vie has not said whether residents will get refunds, according to IBTimes UK and Cruise Mummy.
Lodging is in dispute, too. Petterson told CBS the company is covering hotels. Resident Randy Cassingham, who writes ResidentialCruising.com, disagreed. “They have absolutely not offered to pay for that lodging, full stop,” he told Cruise Industry News.
What does Chapter 11 mean for residents?
Chapter 11 is known as reorganization bankruptcy. According to the U.S. Courts, the goal is to keep a business running while it repays creditors over time.
In most cases, the company stays in control of its assets. Once a case is filed, creditors generally can’t keep chasing old debts while the case plays out. The company then proposes a plan that sorts claims into groups and says how each group gets paid.
Residents who paid for cabins could end up as creditors in that process. But how they would be treated is unknown until a case is filed and a plan is proposed. Anyone affected may want to talk to a bankruptcy attorney.
How did residents leave the ship?
Cambodian officials said the ship arrived from Thailand on Oct. 23 with 203 passengers and 156 crew, Cruise Mummy reported. Residents were told on Monday, Oct. 26, to leave by 2 p.m.
“If we had a few days of warning, we would have packed up and gone ashore in Thailand,” Cassingham told Cruise Industry News.
Residents pooled cash so each crew member at one stripe or below got $100, he said.
Where is the Villa Vie Odyssey going now?
A provincial deputy governor said the ship is expected to refuel and leave Cambodia on Saturday, Oct. 31, according to Cruise Mummy. Villa Vie has not confirmed that date or said where the ship would go.
The ship, once Fred. Olsen’s Braemar, began its world voyage in October 2024 after delays in Belfast.
Cassingham and his wife, Kit, saw 65 countries in two years on board. “It was a fantastic adventure and it was great while it lasted,” he told Cruise Industry News.
Article compiled and written by Kambrea Pratt (editor-in-chief), Derek Gibbs (beat editor) and the Pirates & Princesses newsroom. Pirates & Princesses is part of WebReef Media.
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Hat Tips:
Cruise Industry News (Oct. 29), bankruptcy plan report, resident Randy Cassingham quotes, fuel costs, crew tips; (Oct. 27) company statement on restructuring
CBS News (Oct. 28), Mikael Petterson interview, Chapter 11 plan, fuel and expense figures, cabin prices, 15-year promise
Cruise Hive (Oct. 27), disembarkation deadline, Kathy Villalba as CEO
Cruise Mummy (Oct. 28), Cambodian officials’ passenger and crew counts, Saturday departure, refund questions
IBTimes UK (Oct. 28), advertised cabin prices, refunds unconfirmed
U.S. Courts, Chapter 11 basics
Wikipedia, ship history and Belfast delay
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