CMV creditors unlikely to see cash
CRUISE & Maritime Voyages Australia (CMV) administrator Duff & Phelps has found that any payout to creditors of the cruise line is unlikely, with coronavirus and demand for customer refunds cited as “key reasons for the company’s difficulties”.
The formal Second Report to Creditors was issued last week, with Duff & Phelps recommending CMV Australia be wound up due to its large fixed overheads and a cost base that could not be reduced to a “mothball state” until COVID-19 restraints lifted.
CMV Australia ceased trading when its UK parent company CMV Group was unable to attract additional funding to provide liquidity while remaining nonoperational (CW 21 Jul).
CMV Australia owes more than $138 million to 53 creditors, however more than $131 million of this relates to secured creditor claims for the overall group.
There is also a related party creditor in the amount of $5.7 million owed to sister company South Quay Travel & Leisure which provided ongoing funding to CMV Australia.
Local trade creditors are owed $470,000, and there is $282,000 in staff entitlements outstanding, plus a further $55,000 owed to CMV Australia Managing Director Dean Brazier.
Duff & Phelps found the line had been trading at a loss since as early as 2014, losing $121,000 for the year ending 30 Jun - however CMV Australia was at no point trading while insolvent.
The administrator said with CMV Group seeking finance in response to the COVID-19 pandemic and initial expectations this would be successful, “there was a reasonable expectation the CMV Group would be able to maintain skeleton operations... and resume operations once the pandemic and associated travel restrictions eased.
“It wasn’t until this campaign was ultimately unsuccessful and that certain entities within the CMV Group were placed into Administration that the Company’s ability to continue to meet its debts as and when they fell due came into question.”
The second meeting of creditors will be held this Wed 26 Aug at 11am AEST, with those wishing to attend via teleconference are invited to contact jan.haubruck@duffandphelps.com.
While British consumers impacted by CMV’s closure have been protected by the various UK ATOL and ABTA schemes, no such protection has been available in Australia, with many travel agents believed to be heavily impacted by credit card chargebacks.