Villa Vie residents made a ‘Hail Mary’ effort to buy the Odyssey. Read the letter confirming the plan is dead.

• A resident-led effort to buy the Villa Vie Odyssey has failed.
• Villa Vie’s “never-ending” cruise came to a halt in Cambodia last Tuesday.
• One resident called the bid a “Hail Mary.” Two days later, a letter confirmed it was over.

A last-ditch attempt by residents of Villa Vie’s Odyssey to buy and operate the ship is dead in the water.

The Odyssey’s final months were marked by signs of Villa Vie Residences’ financial distress, culminating in the ship’s abrupt halt last week in Cambodia. Residents — who bought cabins for between $119,999 and $439,999 in the hope of living permanently at sea — were given just eight hours to disembark on Tuesday.

Paul Montoya, a member of the ship’s seven-person Resident Council which was involved in securing resident pledges for the buyout, described the bid on Thursday as a “Hail Mary.”

Two days later on Saturday, a resident-backed group calling itself Sagar Capital told residents that the effort had ended, according to a letter reviewed by Business Insider. Three residents confirmed the letter’s contents.

The letter said the group had spent two months trying to negotiate a deal, but had been unable to do so.

Montoya said in a call with Business Insider on Monday that the group had agreed to contribute a “fair amount” of capital toward the buyout to “get things rolling,” while other residents were invited via WhatsApp or in person to pledge matching funds.

Cambodian authorities said that 203 residents were on board when the ship docked in Sihanoukville. According to the letter, 169 residents made pledges, but the amount pledged was insufficient.

“We were a little bit short, but we were pretty close,” Montoya added, declining to say how much residents had pledged. He said that no money was collected from residents.

In its letter, Sagar Capital cited a number of reasons for ending the bid, which several residents said was their only hope of keeping the Odyssey sailing. These included:

• An inability to reach an agreement with the ship’s lender;
• Villa Vie having more debt than anticipated;
• Potential legal exposure;
• The cost of bankruptcy proceedings;
• The financial risk to residents’ savings.

“It was probably more exploratory than anything to see if the support would be there,” Montoya said on Monday. “I think for the most part the support was there, but it would have been probably very tenuous in trying to move forward with those problems.”

In an interview with Business Insider on Friday, Petterson said the company was doing everything it could to keep the ship afloat after a potential deal with Oneil Khosa, the former CEO of Margaritaville at Sea, fell through earlier this month.

Petterson said Villa Vie’s focus was on recapitalization. “Preferably, we need an operational partner that can come in with a stronger hand and a bigger pocket,” he said.

Earlier last week, Petterson told Business Insider that the company was considering bankruptcy.

Villa Vie, Petterson, and the company’s cofounder Kathy Villalba did not immediately respond to requests from Business Insider for comment for this story.

The resident-led effort was a final push to save the ship, Montoya said. Now, he said, residents are relying on “even more of a long shot,” such as a “benevolent soul” stepping in.

Cheryl Ethrington, a resident who had planned to pledge toward the buyout, said: “I haven’t completely given up hope that someone will pick up the baton and run with it. If not, life goes on.”

You can read the letter from Sagar Capital to residents in full below:

1. No agreement with the lender. We negotiated with the ship’s lender for two months and could not reach terms. We understand the lender, with Columbia Ship management, has now taken control of the ship and intends to sell it at auction.
2. More debt than we expected. We were given access to Villa Vie’s records only last Saturday. Our review found substantially more debt than we had anticipated.
3. Legal exposure. Taking over Villa Vie and changing its management would have exposed Sagar to significant liability from current and future lawsuits.
4. The cost of bankruptcy. A Chapter 11 process would cost about $3 million for the first 60 days alone and could take much longer if lawsuits were filed.
5. The risk to your savings. We could not find a monthly fee that both covered the ship’s operating costs and stayed affordable. We could not in good conscience ask anyone to put their savings at risk on a plan that might not succeed.

Read the original article on Business Insider

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