Judge okays casino boat deal
The buyer of the Ocean Jewel plans to refurbish the ship and try again, possibly in the bay area.
By STEVE HUETTEL
Published January 12, 2006
TAMPA - A bankruptcy judge cleared the way Wednesday for a California investment group to buy the Ocean Jewel of St. Petersburg and refurbish the ship to resume offshore gambling.
Attorneys for defunct Titan Cruise Lines and its largest creditor told bankruptcy Judge Alexander Paskay that Yamashiro Financial Services planned to keep the ship in the Tampa Bay area.
Yamashiro representatives say they're exploring various Florida locations but prefer the business to stay in the local area. During its yearlong run, the ship floated in international waters 9 miles off the coast and took passengers out from St. Petersburg and John's Pass on Treasure Island on shuttle vessels.
"We're hoping to strike a deal and do something with this community," said spokesman Matt Kenagya. The company expects to announce the ship's location in four to six weeks, he said.
Consultants for Titan and the First American Bank in Illinois, the company's largest creditor, sought buyers for the ship throughout the gaming business after the cruise line filed for bankruptcy Aug. 1.
But Yamashiro was the only bidder at an auction Monday and later agreed to pay $7.25-million for the Ocean Jewel and other Titan assets. The money will pay secured creditors and administrative costs of the case.
Owned by a group of Illinois businessmen, Titan burned through about $90-million during its three-year history, said Dennis Shepard, an outsider brought in to the run the company in the past months.
More than 300 investors from the Chicago area lost a total of $40-million to $50-million, he said.
First American, a suburban Chicago community bank that financed the startup cruise company, was the biggest loser. The bank is owed $20-million and will recoup $3-million to $4-million from the ship sale, said First American attorney Ron Peterson.
Creditors that provided maritime services, such as the City of St. Petersburg, will likely get paid in full. The city has a $159,000 claim for unpaid passenger fees and dock rent.
Titan announced plans to bring the vessel to St. Petersburg's port in December 2002. But the ship's launch was delayed until October 2004 by new homeland security regulations, Coast Guard screenings and four hurricanes.
Titan officials scrapped plans to run cruises from the port because it took four hours to reach international waters, where casino gambling is legal.
The shuttles that carried passengers to the Ocean Jewel took much less time, about 30 minutes from John's Pass and a little more than a hour from St. Petersburg. But they couldn't run during rough weather, often stranding passengers on the gambling ship for long stretches.
Titan's owners had no background in gambling or ships, said Shepard. They didn't spend money wisely on refurbishing the old Russian hospital ship as a cruise vessel, he said.
Yamashiro is new to the gambling ship business, Shepard said, but has hired veteran casino operators.
Last year, Yamashiro bought the St. Tropez, a gambling ship under repair in the Bahamas that is about two-thirds the size of the 450-foot Ocean Jewel, said Kenagya, the company spokesman.
Yamashiro plans to put $4-million in repairs into the Ocean Jewel and launch both ships by next summer in Florida under the name Casino Royale.
"We are confident there are a lot of markets in Florida to support this," he said. "And Tampa is one of the most affluent markets in the Southeast."
Steve Huettel can be reached at email@example.com or 813 226-3384.