Luxury Island Escape Cruises NZ collapse leaves customers $4million out of pocket, Broome WA

A luxury cruise company has gone into receivership, leaving customers $4million out of pocket despite the forced sale of the operator’s main vessel to repay debtors.

The sudden collapse of Luxury Island Escape Cruises NZ last July means dozens of passengers will not be reimbursed after shelling out $15,000 each to sail out of Broome and along the Western Australian coastline for 12 nights.

A creditors’ report shows that despite the dramatic seizure of a Luxury Island Escape Cruises NZ vessel in Broome’s port to pay international financiers, that fire sale fetched a disappointing amount of money. 

The 53.5-metre 30-passenger luxury cruiser Island Escape, which comes with a helicopter pad, was ‘arrested’ by the Federal Court last August and was seized in November.

Despite similar vessels selling for up to $35million on the international market, the Island Escape only fetched $5.5 million.

Private pearling company the Paspaley Group snapped up the bargain on January 13 and took possession of the ship on February 22. 

Liquidators Rowan John Chapman and Amanda-Jane Atkins of Chapman Atkins Limited reported that the price fell far short of the almost $20million owed to the Export Finance Norway, and the Bank of New Zealand.

The company also owes $4,677,217 to customers who did not get their cruises but the liquidators warned this was not going to repaid.

‘Given the shortfall to the financiers, there will be no distribution to unsecured creditors, including cruise ship customers of the company,’ their report reads. 

Steven Davies and his wife Lyn forked out $23,000 for their Kimberley cruise only to be left bitterly disappointed.  

3.5-metre 30-passenger luxury cruiser Island Escape was sold to pay debts owed to international financiers

‘It was a bucket-list trip of a lifetime that we’ve both always wanted to do,’ Mr Davies told the ABC. 

‘We thought we’ll get our money back and re-book elsewhere,’ he said.

Despite the setback Mr Davies and his wife still hope to do a Kimberley cruise, however they now have a health consideration.

Mr Davies revealed he had been diagnosed with cancer but was hopeful he was ‘through the worst of it’.

‘I’ve got to have a PET scan in approximately 10 weeks’ time and if that proves to be all clear, then we’ll certainly look at doing the Kimberley through a more reputable and company,’ he said. 

Steven Davies and his wife Lyn paid $23,000 for their once-in-lifetime trip but were left disappointed

Australia’s corporate watchdog ASIC is waiting for an administrator’s report into whether Luxury Island Escape Cruises NZ traded while insolvent.

Administrator Dane Skinner said directors could be liable for the debt incurred while the company was technically insolvent.

“Based on my investigations, my best estimate is that the company has been insolvent since May 2022 to August 2022, when the vessel was arrested by the Federal Court of Australia,” he wrote.