The Federal Maritime Commission (FMC) has revoked the performance certificate of French America Line for not meeting financial responsibilities and failing to provide requested information.
The FMC order released late Friday means the riverboat cruise company, which has not operated for several years, can’t offer, advertise or run cruises.
Certificates show that operators have money set aside to reimburse passengers if cruises are canceled. French America was required to submit weekly reports of unearned passenger revenue and refunds as well as independent quarterly audits. None of the audits for 2017, 2018 and 2019 were received on time, the FMC said.
The FMC also wanted to see documents such as financial statements and general ledgers. The company submitted “a spreadsheet showing passenger deposits, payments, cancellations and reimbursements,” the order says.
The company concedes it was occasionally slow in providing documents but said a revocation wasn’t justified because, among other reasons, it was temporarily out of business, according to a French America filing. That’s no excuse, the commission said.
“These are not simply technical failures,” FMC said. “Rather, they threaten to thwart the purpose of escrow accounts” and undermine FMC’s ability to ensure companies have the resources to protect passengers.
All passenger deposits were put into an escrow account and by the end of 2017 had been returned, the line said in response to FMC’s notice last April that it intended to revoke the certificate. It also said it was in continuous communication with the FMC about its situation, and that the audit reports were current through June 2018, although the commission rejected them on technical grounds.
The line “is and always has been financially responsible,” the company said.
The FMC says it had to work with the company “to correct misrepresentations to passengers about the refund process.”
Finally, the FMC notes, nothing prevents French America from reapplying for a certificate if it offers cruises again.
The line’s troubles started in late 2016 shortly after it began inland river service on the Louisiane and plumbing problems forced cancellation of its second cruise and others through that December. Water overflowed from a sewage tank and got into lower crew quarters and the food stores, a company official said.
Then early in 2017, they delayed a spring start for a month, saying their insurance underwriter requested refits to areas that had been replumbed. More sailings were canceled because the company said it needed Coast Guard approval not just for the work done but for the entire vessel, which was docked in New Orleans.
French America claimed in a suit that insurance issues related to repairs on the riverboat caused mounting losses and essentially drove it out of business. The insurers denied the allegations. The case is pending.
The 150-passenger Louisiane is the former 203’8”x60’x12’ Columbia Queen, which French America Line bought for an undisclosed sum from Xanterra Parks & Resorts, Greenwood Village, Colo. In 2011, Xanterra purchased the vessel and other assets of Ambassadors International Inc., out of bankruptcy court. Ambassadors was the parent of money-losing Majestic America Line, which shut down in 2008.
The Louisiane is chartered to the U.S. Navy as an accommodation vessel through March and possibly longer, line chairman Chris Kyte said in an FMC file document. The company intends to return the vessel to river service in the future.