Toronto’s iconic Captain John’s floating restaurant may become no more than a fond memory if Federal Court approves a new insurance measure linked with the auction of the ship.
According to a
Toronto Star report, Ports Toronto is asking to link any sale of the ship at auction with a requirement that the buyer must have $50 million in insurance before it can move the ship—a measure that is likely to ruin any chances Captain John’s has of finding a buyer.
Ports Toronto spokesperson Erin Mikaluk told the
Star the insurance recommendation came from its insurance broker and are designed to protect against the ship’s potential sinking, pollution of Lake Ontario or injury of movers in the moving or scrapping of the ship.
“The insurance requirements were carefully considered and suggested by our broker as a reasonable request for a qualified buyer who will be transporting the ship,” said Mikaluk.
However, some in the industry are raising their eyebrows. According to the same report, an anonymous marine insurance expert told the paper a $50 million requirement is roughly “10 times the norm.”
And
Marsh Canada’s senior vice president says any owners may have trouble procuring that amount from a carrier anyway.
“Fifty million is a high number—there’s no question about that,” said Ron Eldridge. “It will be a struggle to entice the insurers.”
Eldridge said a prospective buyer would likely have to work with more than one insurer, particularly given the ship’s condition and what he describes as its “checkered past.”
The original owner of the floating restaurant, “Captain” John Letnik reportedly owns nearly $2 million in back taxes, berthing and outstanding mortgages. A potential buyer, James Sbrolla, paid the agreed upon auction price but did not meet a court-ordered deadline to remove the ship in August.
Sbrolla is now away on an Antarctic excursion, and the port authority is seeking permission to reopen the bidding process.
A group of Boston-based investors are said to be interested in the ship, but a spokesperson told the
Star the insurance costs are “so far out of whack that they blow any business plan out of the water.”
