Villa Vie Residences' Villa Vie Odyssey cruise ship is now under its lender's control, according to a new message to residents that CBS News obtained this week.
The report comes one week after Villa Vie Residences announced it was suspending operations in Cambodia because of soaring operational costs, forcing residents to scramble to find new accommodations.
"The lender has taken possession of the ship, but that does not mean the Odyssey's future has been decided," said the message to residents. "No sale has been scheduled. We believe there is time to bring forward a viable plan and are working to do that."
"The plan we are pursuing is to support those operations through DIP financing and resident maintenance collections," the message added. "The debt and legal issues are serious, but they do not erase the value of the ship, the resident community or the opportunity to build a stronger operating model. A structured transition with new capital and experienced operators can address the challenges and create a path forward."
The note claims that a Chapter 11 bankruptcy for Villa Vie would cost the ship about $3 million for the first 60 days of the process.
Sources familiar with the matter told CBS News that the next step is for the ship to be moved from Cambodia to Singapore, where it could eventually be auctioned off.
Meanwhile, the company's founder and executive chairman, Mike Petterson, told the news outlet that "this is a 30- to 90-day process, and, during that process, we have time to get a restructure done."
"They now have the responsibility to pay the crew, fuel and the operations of the vessel and safekeeping of the vessel," he added. "They would be willing to work with a funded plan—they're not out of negotiations—it's not like you get your car repossessed and you can't get it back."
"Our focus is 100% on the Odyssey. Villa Vie was entirely capitalized by the residents themselves. There is no stakeholder outside of the residents," Petterson told CBS News.
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