Yacht Path International, a Fort Lauderdale-based yacht transport service, filed for Chapter 11 reorganization March 20 in U.S. Bankruptcy Court in West Palm Beach, Fla.
“It unfortunately was necessary due to an adverse ruling in a lawsuit that eventually resulted in a writ of garnishment being placed on Yacht Path’s bank accounts, restricting our access to the funds necessary to pay the company’s bills,” president Dennis Cummings said in an email to clients.
“Subsequently, certain parties through their legal counsel threatened to initiate lawsuits and/or an involuntary bankruptcy against Yacht Path. Without access to capital and with the threat of an involuntary bankruptcy hanging over us, we had no choice but to seek protection under Chapter 11.”
Cummings said it was because of those frozen accounts that Yacht Path had been unable to pay freight charges in February and March on several yacht shipments it had arranged, resulting in shippers filing liens against the yachts — in some cases arranging for U.S. marshals to “arrest” or seize them at the port of delivery — until the yacht owners paid the freight charges, even though they had paid the charges once to Yacht Path prior to shipment. In one case in which six yachts were seized, the total freight charges amounted to $300,000.
Six yachts were seized Feb. 23 on their arrival at Port Everglades in Florida and subsequently released after their owners paid the freight charges; on Feb. 16, another four yachts were seized in Vancouver, British Columbia (release of those yachts was still in negotiation); and the owners of another 16 yachts that were delivered to Port Everglades averted the seizure of their vessels in early March by paying the freight charges before the shipment arrived, though — again — they had paid the charges once already.
“Chapter 11 will give Yacht Path the breathing room necessary to operate and execute a plan of reorganization,” Cummings said. “We are requesting relief from the bankruptcy court that will allow us to perform our services for customers, including completing, as scheduled, the voyage you currently have booked with us. This course of action will enable us to make significant improvements to Yacht Path’s operations. We aim to be a more streamlined, efficient and focused company upon emerging from this process.”
Yacht Path is a New York corporation that was organized in 2001, according to the Florida Secretary of State’s office. Brothers Dennis and Kevin Cummings are listed as the company’s president and vice president, respectively. Unity Shipping Lines Inc., of Palm Beach Gardens, Fla., described as a sister company of Yacht Path, provides the logistics — the loading, sea fastening and ocean transport of the yachts — Unity’s website says.
Unity also transports heavy equipment. The secretary of state lists Dennis and Kevin as president and vice president, respectively, of that company as well.
— Jim Flannery