Exploration Cruise Lines Files Chapter 11

Exploration Cruise Lines, which operates five ocean cruisers, has filed for protection from its creditors and has canceled all voyages not under way in a legal dispute with its parent company, Anheuser-Busch Cos.

Voyages to Tahiti and the Caribbean scheduled to end this weekend will be the company’s last cruises for now. New cruises due to start this weekend from San Francisco, Puerto Rico, Tahiti, Panama and Mexico have been canceled.

ECL said it hoped to resume service by the summer but meanwhile will lay off 400 employees, including 200 in the Seattle area.

In filing under Chapter 11 of the bankruptcy code, which allows for reorganization and continued operations, ECL said it lost more than $40 million during the past 2 1/2 years while under Busch control.

“The future cruise plans of thousands of passengers nationwide will be adversely affected during this upcoming holiday season because of this unfortunate situation,” said Robert Giersdorf, ECL’s president. “This action has not been taken without having exhausted every other avenue to solution.”

He said the company sent telegrams to passengers notifying them of tour cancellations and promising that refunds can be obtained.

No Losses Expected

“We anticipate that no one in the way of vendors, creditors or passengers are going to lose any money,” he said, adding that some ticket holders may have to file claims in bankruptcy court to receive their refunds.

According to the bankruptcy filing, Anheuser-Busch took control of the cruise line’s operations in July, 1986. In early 1987, the cruise line said, Busch sought to end its ownership and the two companies agreed that ECL would buy back its stock for $10 million.

But between December, 1987, and May 17, when the transaction was to be closed, “the financial situation of ECL substantially deteriorated,” the court filing said. As security in the transaction, Busch took a mortgage on one of the line’s ships, the Colonial Explorer.

The transaction fell through, however, and the cruise line said it has been unable to raise funds to continue its operations.

“Exploration has been unable to secure alternate asset, equity or working capital funding,” Giersdorf said.

Officials of Anheuser-Busch could not be reached for comment.

During the winter season, ECL ships carried from 500 to 600 passengers a week.

Launched in 1972, the cruise line offered “one-of-a-kind” travel adventures with its smaller vessels that can reach out-of-the-way destinations including Alaska, Panama, Tahiti and the Columbia River.