THE MONEY TRAIL
Firm's bankruptcy filing leaves city in dry dock
Just days before the city of Sacramento intended to crack down on the private firm running its riverfront operations, the outfit filed for bankruptcy protection.
For months the city had acquiesced to pleas from Sacramento Yacht Charters to hold off from yanking its contract. The City Council was set to act this week, but was beat to the punch.
"We needed to head (the council) off, to give the company more time and to preserve its bookings," said W. Austin Cooper, a local bankruptcy attorney. Now, Cooper said, the city will have to settle the contract dispute in federal court.
Repayment of the $40,000 the company owes to the city is also out for now, said Assistant City Manager Cassandra Jennings. Up in the air, too, is the estimated $90,000 in yearly revenue expected from Sacramento Yacht Charters to support services in Old Sacramento.
What happens next?
"We're working on all that now," Jennings said. "Obviously it will take more time than was planned. … It looks like we won't be getting payments due, and it looks like a line of people haven't received what they're due."
The company owes creditors more than $2 million, including a $965,000 boat loan; a $220,000 advance by company President Roy King; attorneys fees; public relations fees; back taxes; and food bills, according to federal court documents.
Cooper said the firm filed Chapter 11 bankruptcy so that it can continue operations while it tries to restructure its debt. He said it wants to continue booking boat cruises in January and in its discussions with the city will probably try to work out a way to sell the operation.
In 2006, the city granted the firm exclusive rights to provide riverboat, water taxi and amphibious trolley service. The city contends the company provided no water taxi service in 2007 and limited runs in 2008, did not replace the riverboat Matthew McKinley or make necessary city payments.
The company, Jennings concluded in a report to the council, "has repeatedly demonstrated it cannot operate a high-quality … operation in Old Sacramento."
– Terri Hardy. Send tips to money.trailcom
ON YOUR GUARD
Beware of the Craigslist ads for reduced-price gift cards
Consumers looking for a good deal should be on their guard about a holiday gift card scam. Elk Grove police spokesman Christopher Trim describes the scam:
Ads on Craigslist offer gift cards at reduced prices. Scam artists ask buyers to meet them at the local store where they claim the cards have been checked and have balances. Sometimes, the scammer goes to the register, pretending to show the cards have balances.
When buyers try to use the cards, however, they learn there is no balance left.
"If it sounds too good to be true, it is," Trim said.
He said if you want to buy the gift card, make sure it has a balance with a store clerk before you hand over any cash for it.
"Don't take someone at their word," Trim said.
– Sandy Louey Send consumer alert tips to publiceye@sacbee.com.
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