* Ambassadors International files Chapter 11 in Delaware
* NY fund Whippoorwill agrees to buy company
* Windstar operates three luxury yachts
* Cruises to operate as scheduled during bankruptcy
(Adds details of sale process, company statement, byline)
By Jonathan Stempel
NEW YORK, April 1 Ambassadors International Inc
AMIE.O, the parent of Windstar Cruises, filed for bankruptcy
protection on Friday and said it plans to sell itself to
Whippoorwill Associates Inc, its largest shareholder.
Windstar operates three internationally flagged luxury
yachts with sailings in the Americas including the Caribbean,
and Europe including the Baltic region and the Greek Isles,
according to the Chapter 11 petition filed with the U.S.
bankruptcy court in Delaware.
The cruise industry has struggled as the recent economic
recession caused many consumers to curb discretionary spending,
including on travel.
Based in Seattle, Ambassadors said Windstar will operate
its cruises as scheduled during the bankruptcy process,
expected to take 45 days.
Court approval is required for a sale, which also includes
assets from Ambassadors' former Majestic America Line. Those
operations shut down in 2008.
Whippoorwill is a White Plains, New York-based hedge fund
led by Shelley Greenhaus. It invests in bankrupt and distressed
companies, and manages more than $1 billion.
According to the petition, Whippoorwill owns 22.2 percent
of Ambassadors' common stock. It plans to provide $10 million
of financing to help the company operate during the bankruptcy
Friday's filing covers Ambassadors and 11 affiliates. The
company had $86.4 million of assets and $87.3 million of debts
as of Dec. 1, 2010, the filing shows.
The Nasdaq halted trading in Ambassadors' shares on Friday
morning for news pending. The shares closed Thursday at $2.80.
The case is In re: Ambassadors International Inc, U.S.
Bankruptcy Court, District of Delaware, No. 11-11002.
(Reporting by Jonathan Stempel in New York; Editing by Tim