DeCurtis files Chapter 11 bankruptcy in wake of feud with Carnival

By Sarah Lizee

Olympia, Wash., May 1 – DeCurtis Holdings LLC filed Chapter 11 bankruptcy on Sunday in the U.S. Bankruptcy Court for the District of Delaware.

The company has been litigating against one of its prior clients, Carnival Corp., since April 2020, according to court documents.

DeCurtis, a cruise line software maker, claims that Carnival threatened its other cruise line customers with litigation based on accusations that DeCurtis technology misappropriates and infringes upon Carnival intellectual property.

“DeCurtis believes that those threats were an attempt to put it out of business and preclude it from selling its guest engagement systems and methods to other cruise line operators,” Michael Atkinson, principal with financial adviser Province, LLC, said in a declaration.

“And the threats to DeCurtis’s customers, as I understand, had a significant impact on DeCurtis because Carnival is the largest cruise ship operator in the world, with nine different cruise lines and 45% of the market, while DeCurtis is a much smaller company.”

In early 2023, the litigation proceeded to trial, and resulted in an adversary jury verdict in favor of Carnival.

Atkinson said he was informed that Carnival’s counsel has publicly threatened to seek entry of injunctive relief against DeCurtis and its customers in furtherance of the judgment.

“DeCurtis was compelled to file these cases because it lacks the liquidity to satisfy the judgment, post a supersedeas bond to halt execution of the judgment, or pay the associated legal expenses necessary to quickly challenge the judgment,” Atkinson said.

After exploring strategic alternatives, the company has decided to sell substantially all of its assets to some of the first-lien lenders led by Invictus Global Management through a credit bid, subject to higher and better offers at auction.

The company is seeking approval of an up to $6.5 million new money debtor-in-possession facility provided by the first-lien lenders. The facility would also include a rollup of prepetition secured debt into the facility.

The company is seeking interim access to $2 million of the new money under the DIP facility.

In its petition, the company listed 50 to 99 creditors, $10 million to $50 million in assets and $50 million to $100 million in liabilities.

Its largest unsecured creditors are Carnival Corp. & plc, based in Miami, with a $21 million litigation claim, City National Bank, based in Los Angeles, with a $9.81 million bank loan claim, Groombridge, Wu, Baughman & Stone LLP, based in New York, with a $4.76 million professional services claim, Quinn Emanual Urquhart & Sullivan LLP, based in Los Angeles, with a $3.3 million professional services claim, and Freeborn & Peters, LLP, based in Chicago, with a $2.01 million professional services claim.

Cooley LLP and Potter Anderson & Corroon LLP are attorneys for the debtors. Groombridge, Wu, Baughman & Stone is special counsel. Province, LLC is investment banker.

Orlando, Fla.- based DeCurtis provides guest experience and operational management product-focused SaaS software solutions. The Chapter 11 case number is 23-10548.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.