Florida Gambling Ship Files For Bankruptcy

Florida’s Island Breeze Casino ship has filed for bankruptcy with the hope of someday returning to sea.

Ship officials on Thursday put the 600-passenger vessel into bankruptcy after halting daily excursions from Palm Beach and laying off nearly all of its 250 employees, according to documents filed in U.S. Bankruptcy Court in West Palm Beach, Fla.

The bankruptcy could help the ship restart its operations next month during Florida’s busy tourist season, said bankruptcy attorney Lawrence McMichael. The vessel might be able to pick up business from a competitor, the Bahamas Celebration cruise, which collided with something at sea on Halloween and caused hundreds of costumed passengers to evacuate.

In court papers, Chief Executive Bradley Prader blamed the Island Breeze’s financial problems on two shutdowns earlier this year.

In May, the 160-foot ship’s starboard engine “sustained a catastrophic failure,” prompting repairs that resulted in losses of $1 million, Mr. Prader said. Soon after the ship was fixed, it had to go into drydock for a mandatory U.S. Coast Guard inspection.

Before the casino ship set to sea, the company fell behind on payments to a Miami slot machine leaser. Ship officials haven’t negotiated a new leasing agreement that would enable the vessel to relaunch and “return to profitable operations,” Mr. Prader said in court papers.

The casino ship has other debts. Its owners bought the vessel in May 2013 for $5.8 million, promising to make monthly payments of at least $15,000 until August 2018. The company still owes about $5.2 million to the seller, Mr. Prader said in court papers.

The Island Breeze ship also promised the Port of Palm Beach that it would carry 125,000 passengers a year or pay $5 for each person below that headcount, the Palm Beach Post reported earlier this year. The paper added that the region’s floating casinos lately have had a hard time profiting:

The Port of Palm Beach’s casinos have struggled in recent years. The Big Easy briefly operated from the port but left in 2006. The Palm Beach Princess, beset by financial struggles that dragged on for years, stopped sailing in 2010. Its replacement, the Black Diamond, managed to operate for only a few months in late 2012 and early 2013.

The Island Breeze ship charged $15 for a ticket and $25 for its evening buffet.

Write to Katy Stech at [email protected]. Follow her on Twitter at @KatyStech.