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Tall ship sinks deep into debt - Soundings Online

Tall ship sinks deep into debt

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The owner of the Baltimore charter ClipperCity appears to have run out of time and money

The owner of the Baltimore charter ClipperCity appears to have run out of time and money

ClipperCity, a 158-foot-long square-rigger that sails out of Baltimore’s InnerHarbor, found itself tied at the docks — perhaps permanently — caught in the sights of creditors and the Coast Guard.

Earlier in the month owner John Kircher filed for Chapter 11 bankruptcy protection, but continued carrying charters of up to 150 passengers, after Regal Bancorp of Maryland tried to foreclose on its mortgage.

“We missed a sail at 2 o’clock Friday afternoon” after federal marshals carried out the foreclosure “and did our next sail at 8 p.m.,” once the bankruptcy had been filed, Kircher told Soundings in late May.

But that didn’t last long. By early June Kircher had sent a letter to various stakeholders in the company that spelled out the bleak situation.

“ClipperCity isn’t sailing for the foreseeable future, and the business under my ownership has ended,” Kircher wrote.

The Coast Guard revoked the vessel’s certification and the bank seized control of the ship and most other assets.

The Coast Guard had issued a “work list” of requirements for the vessel to retain its certification.

The last time ClipperCity was in drydock it was refloated before the Coast Guard could complete an inspection, according to Cdr. Brian Penoyer, chief of the prevention department in Coast Guard Sector Baltimore. In late May, he said the ship must return to drydock for the inspection to be completed and time was running out.

Kircher said he tried to find a two-day window to put the ship in drydock and make repairs, but time ran out.

To customers who had bought tickets to sail aboard ClipperCity, as well as anyone else to whom the operation is financially obligated, Kircher wrote, “There’s nothing in the account, and with no money coming in, there’s no ability to refund what you’ve already paid or to pay what you’re due.”

Kircher estimated that, without major debt, expenses to operate the ship were about $700,000 a year.

Built in the 1980s to plans bought from the Smithsonian Institute, ClipperCity was purchased by Kircher three years ago from an owner who had done “about $410,000” that last year in sales, he says.

“I was confident I could do that much [$700,000 in sales] and more the first season. I was wrong. It took two seasons and the better part of last year to turn the business around,” Kircher says. That is not uncommon in a small business, he says, adding: “It was my responsibility.” www.clippercity.com