• The founder behind the "never-ending" cruise told Business Insider that problems piled up this year.
• The Iran war sent fuel prices soaring. Then Villa Vie spooked passengers by asking them for loans.
• Now founder Mikael Petterson says he is considering bankruptcy.

A financial whirlpool sucked the "never-ending" cruise under.

The founder behind the Villa Vie Odyssey told Business Insider that the Iran war fuel-price surge was the beginning of a "cascading effect" that led the cruise to shut down this week. Mikael Petterson, Villa Vie Residences' founder and executive chairman, said he's considering bankruptcy.

Villa Vie sold permanent cabins at prices ranging from $119,999 to $439,999, promising residents an endless cruise with stops at more than 400 ports of call and a global circumnavigation every three-and-a-half years.

Here are five business problems that brought the trip to an abrupt end.

1. Fuel prices soared.

In February, the United States and Israel launched a war in Iran. Fuel prices surged. The Odyssey uses marine gas oil, or MGO.

Villa Vie had typically paid around $600 or $700 per metric ton for the Odyssey's fuel, Petterson said. By March, the price of MGO in Singapore had soared to nearly $2,000 per metric ton, according to data from Ship & Bunker, a trade publication.

2. The company was too small to hedge.

Some publicly traded companies, like Norwegian Cruise Line Holdings, have told shareholders this year that they have taken measures to blunt the impact of fuel-price volatility. Unlike larger cruise lines, Villa Vie didn't have the scale to absorb the higher prices, Petterson said.

"They're able to hedge and take away some of that risk, but we're too small of a company to do that," he said.

The ship changed its itinerary to spend more time docked at ports and conserve fuel, but it wasn't enough, Petterson said.

3. Villa Vie spooked its own passengers.

In April, Villa Vie wanted residents to help shore up its finances. The company asked them to loan Villa Vie money, offering them interest rates of 12% to 24%, according to a letter viewed by Business Insider.

Some residents got "scared," Petterson said. They sold their cabins to other people who wanted to live aboard. That made things more difficult for Villa Vie's sales team, which was still trying to find buyers for the remaining vacancies on the ship, Petterson said.

4. The company's reputation was damaged.

Some of the Odyssey's residents were content creators. In Substack posts and YouTube videos, they posted about their experiences, some positive and some negative, for the roughly two years that it sailed the world.

Some travel bloggers and social media posters blamed Villa Vie's management for the operation's financial troubles. The negative publicity made it harder to bring more people aboard, Petterson said.

5. The company struggled with cash flow.

The ship's original launch in 2024 was delayed for four months while mechanical problems — including issues with the aging ship's rudder — kept the ship stuck in dry dock. Preparing the ship for launch cost $15 million more than what Villa Vie had expected, Petterson said.

He said the operation was on track to get to break-even cash flow by the second quarter of this year — but the Iran war blew up that plan.

From Judge Paula Xinis (D. Md.) yesterday in Shuma v. Whibley:

Appellant Shane Shuma ("Shuma") and Appellee-Debtor Erin Whibley ("Whibley") were students at Dickinson College during the 2020–21 school year. Shuma made an ill-advised YouTube video satirically opining on the "reasons why the Holocaust was a good thing." The video spread through campus, and an uproar followed. School administrators publicly condemned it, the matter was widely reported in the student newspaper, and students spoke out against Shuma.

In one of Whibley's classes, a lively discussion ensued about Shuma. One student disclosed that she overheard Shuma at a club event saying things that were "absolutely unacceptable to, to say to anyone" and that "there were some threats involved," and she expressed her frustration that his behavior continued "after reporting on Shuma and knowing people who have reported on him in terms of Title IX behavior or just Title IX in general." Another student echoed that she had heard from multiple people that Shuma had written articles in the student newspaper that expressed "racist sentiment." A third student described that Shuma had written an article arguing that "white privilege is not real … is not a thing."

After this conversation, Whibley initiated an online petition to advocate for Shuma's expulsion. The petition described Shuma as the subject of "multiple Title IX issues," and that he had written "racially charged [newspaper] articles." She also described Shuma as a "serial offender." The petition garnered 811 signatures in the first few days, and ultimately over half the Dickenson student body signed it.

Shortly after the posting, Whibley learned that Shuma had no such Title IX complaints filed against him. Within days, Whibley corrected the online petition to eliminate to the claim about Title IX. She further explained in the modified petition that "Shuma has not been in violation of any Title IX statutes," and that she did "not wish to slander [Shuma]," but simply share what she heard from other students.

Shuma sued Whibley for defamation in Pennsylvania state court. After settlement negotiations broke down, Whibley declined to defend the case, and default judgment was entered against her. The state court next concluded that Shuma was entitled to no damages, but upon Shuma's urging, scheduled a damages trial for October 31, 2023.

Days before the trial was set to begin, however, Whibley filed for bankruptcy in the District of Maryland, which triggered an automatic stay of the Pennsylvania case. Shuma next initiated an adversarial proceeding in the bankruptcy case in which he averred that any debt Whibley incurs as part of the Pennsylvania defamation action was not dischargeable in bankruptcy [i.e., couldn't be cancelled the way bankruptcy cancelled most other debts -EV] because her conduct had been willful and malicious. The adversarial proceeding advanced to trial solely on whether Whibley defamed Shuma with the intent to injure him, thus rendering the debt nondischargeable….

Bankruptcy Judge Lori Simpson ruled in Whibley's favor, and the district court affirmed:

Section 523(a) of the Bankruptcy Act enumerates certain exceptions to the dischargeability of debts in bankruptcy. Relevant here, subsection 523(a)(6) states that any debt arising from "willful and malicious injury by the debtor to another entity" is not dischargeable. Importantly, a debt stemming from "a deliberate or intentional injury" is not dischargeable; but a debt can be discharged when arising from "a deliberate or intentional act that leads to injury." …

[T]he Court discerns no error, let alone clear error, in the Bankruptcy Court's factual finding that Whibley did not possess the requisite intent to injure Shuma. The Bankruptcy Court credited Whibley's testimony explaining why she relied on her classmates' reports about Shuma, and next when she learned of their inaccuracy, corrected the public record. The Bankruptcy Court likewise was permitted to credit Whibley's explanation that her prior experiences with sexual assault made her more disposed to believing the reports of Shuma's misconduct, even though such belief ultimately was misplaced.

Last, the Court discerns no error in the Bankruptcy Court's conclusion that Whibley's timely correction of the petition further corroborates a lack of intent to injure Shuma by defaming him. Shuma may feel that Whibley's corrective statement did not go far enough, but mere disagreement with the Bankruptcy Court does not render clearly erroneous the Bankruptcy Court's factual findings regarding Whibley's lack of intent….

The weight of the evidence demonstrates that Whibley posted the petition not to harm Shuma but to protect the student body from Shuma's opprobrium. Whibley plausibly pointed to legitimate reasons why she believed her statements to be true at the time and promptly corrected the petition when she learned she was wrong. Shuma otherwise adduced no meaningful evidence to suggest that Whibley possessed the requisite intent sufficient to meet his burden. All of which supports the Bankruptcy Court's conclusion that the debt remains dischargeable in bankruptcy.

It's not clear to me exactly what "protect the student body from Shuma's opprobrium" means, but here are the passages of the bankruptcy judge's opinion that the court cites there:

In the parlance of Dickinson students, Title IX is a euphemism for sexual assault. All evidence before the Court establishes, and Defendant does not dispute, that the classmate's statements were not true. Perhaps because of Defendant's naiveté, biases and prejudices or because the classroom context lent the discussion an air of credibility, the Defendant did not dismiss her classmate's comments as idle gossip or seek to investigate further. She simply believed them.

The following day Defendant drafted and published an online position on change.org seeking to pressure the Dickinson administration into expelling Plaintiff from the college. In addition to rebuking Plaintiff for his statements in the video, Defendant stated in the petition that Plaintiff has also been reported multiple times for Title IX issues and had written racially charged articles in the Dickinstonian, the college newspaper.

The phrase racially charged in one sense appears to be a code word for racist. That said, it is nebulous to the point of meaningless and appears to reflect the sensitivities and suspicions of the speaker more than the content described.

However, Defendant's statement that Plaintiff had been reported multiple times for sexual assault was an objectively false statement of fact. After calling for Plaintiff's expulsion, the Defendant concluded her statements with a call to action saying, "We can longer accept a slap on the wrist as an acceptable punishment for this serial offender."

On February 24, 2021, the local ABC affiliate, WHTM, published an article about the video and the response by the Dickinson community. The article does not mention Defendant's petition, but includes an anonymous statement by a group of students rebuking Plaintiff for the video. The anonymous statement also stated that Plaintiff authored numerous inflammatory columns in the college newspaper.

The anonymous statement further alleges that the video was not the first time Plaintiff had made such statements, but it was merely the first time such comments were caught on film. Neither the ABC article nor the anonymous statement contained therein make any mention of any sexual assault allegations against Plaintiff….

Instead, reviewing the petition and amended petition in their entirety together with the evidence of the general climate at Dickinson in reaction to the video, it appears that Defendant and others held the opinion that Plaintiff was someone who repeatedly stoked racial tensions and that the video was merely the most egregious and inexcusable in a series of such offenses. The bulk of the original petition conveys that Defendant believed that Plaintiff repeatedly expressed thoughts and opinions that should not be allowed to be expressed at Dickinson.

The statement in the original petition regarding Title IX reads as an unrelated aside. The upshot of the original petition is that Defendant wants Plaintiff removed from Dickinson because she believes that he is a bigot and that she does not feel safe with Plaintiff on campus. Nowhere else in the original petition does Defendant label Plaintiff a racist, misogynist or the like. In fact, Defendant states that the reason she does not feel safe with Plaintiff on campus is not because she is a female, but because she is a Jewish student….

The Bankruptcy Judge's opinion is labeled "Virtual Judge's Ruling," but I take it that means a judge who is present remotely, not actually a virtual judge.

Justin Philip Fasano (McNamee Hosea, P.A.) represents Whibley.

The post Cancellation, Defamation, Bankruptcy, Discharge appeared first on Reason Magazine.

• A "never-ending" cruise was halted because of soaring fuel prices. Its founder blames the Iran war.
• Mikael Petterson says he's considering bankruptcy for his company, Villa Vie. "I feel awful."
• He says residents began to jump ship when the company asked them for emergency loans.

The founder of the "never-ending" cruise that stalled in Cambodia told Business Insider he's doing his best to right the ship.

"I feel awful," Mikael Petterson said when reached by phone Wednesday. The vessel's evicted residents are "counting on me to make the decisions here, and there's nothing else I'm focused on."

After a stormy two years at sea, he had a plan last week to keep the ship's finances afloat, he said.

With his company, Villa Vie Residences, Petterson had promised a new way of life: People could spend six figures to purchase one of 509 cabins on a luxury cruise ship called the Odyssey, and sail around the world for the rest of their lives.

Reality was different. Unexpected mechanical problems delayed the ship's launch for months. Some passengers were unhappy with their cabins. Then the war in Iran sent fuel prices soaring. Residents began to jump ship.

That began a financial whirlpool that sucked the ship under. The price surge was the beginning of a "cascading effect" that led Villa Vie to shut the Odyssey down on Tuesday, Petterson said. The company told passengers living aboard to leave the ship within hours.

"Nobody that's tried residential cruising has succeeded, and we've gone further than anyone else," said Petterson, Villa Vie's founder and executive chairman. "But I think we would have been absolutely fine — and we would have seen this through — if there was no Iran war."

Until last week, Petterson said, he was in talks with a potential investor and was expecting a new infusion of cash. When the deal fell apart, he said, the company was out of options. Now he's considering bankruptcy. He said he understood why residents said they felt shocked and heartbroken.

"I'm the villain in the story, but I'm doing everything I can to support the residents on a solution," he said.

A turbulent launch

The Villa Vie Odyssey was supposed to set sail from Belfast in May 2024. But it wasn't yet seaworthy.

Villa Vie Residences had retrofitted the three-decade-old ship and sold permanent cabins at prices ranging from $119,999 to $439,999. The company's pitch to residents was an endless cruise with stops at more than 400 ports of call and a global circumnavigation every three-and-a-half years. Buyers uprooted their landbound lives with plans to live out the rest of their days on a luxury floating hotel with a pool deck and spa.

Mechanical problems — including issues with the aging ship's rudder — kept the ship in dry dock, leaving some passengers stuck in Belfast for months. Preparing the ship for launch cost $15 million more than what Villa Vie had expected, Petterson told Business Insider.

Once onboard, some passengers were unhappy with their accommodations. Two passengers sued last year, claiming that the ship's living quarters and amenities weren't as promised. One of them also lamented the noise from a pickleball court installed over his cabin. Villa Vie has disputed the claims and said it honored the terms of its contracts. Both lawsuits are ongoing.

Petterson said the ship's first year-and-a-half at sea was "a ginormous undertaking" beset by financial challenges, but the company had put in place a plan for the operation's cash flow to break even by the second quarter of 2026.

Then, in late February, the United States and Israel launched a war in Iran.

Jumping ship

Fuel prices surged. The Odyssey uses marine gas oil, or MGO.

Villa Vie had typically paid around $600 or $700 per metric ton for the Odyssey's fuel, Petterson said. By March, the price of MGO in Singapore had soared to nearly $2,000 per metric ton, according to data from Ship & Bunker, a trade publication.

Unlike larger cruise lines, Villa Vie didn't have the scale to absorb the higher prices, Petterson said.

"They're able to hedge and take away some of that risk, but we're too small of a company to do that," he said.

In April, Villa Vie wanted residents to help shore up its finances. The company asked residents to loan Villa Vie money, offering them interest rates of 12% to 24%, according to a letter viewed by Business Insider. Villa Vie also changed the ship's itinerary, canceling stops at some ports to stretch its fuel supply, Petterson said.

Some residents got "scared," Petterson said. They sold their cabins to other people who wanted to live aboard. That, in turn, made things more difficult for Villa Vie's sales team, which was still trying to find buyers for the remaining vacancies on the ship, he said.

The Odyssey's passengers were mostly Americans; some of them were content creators. In Substack posts and YouTube videos, they posted about their experiences, some positive and some negative, for the roughly two years that it sailed the world.

Some travel bloggers and social media posters blamed Villa Vie's management for the operation's financial troubles. The negative publicity made it harder to bring more people aboard, Petterson said.

By the start of June, fuel prices were falling and things were looking up for Villa Vie, Petterson said. The Odyssey had sold 85% of its units, he said. Villa Vie announced plans to launch another residential cruise ship that would be bigger and better than the Odyssey.

Then in July, fighting between the US and Iran expanded. Fuel prices jumped, and the company's prospects plunged again, he said.

As fuel prices remained high, Villa Vie entered into talks with Oneil Khosa, the former CEO of Margaritaville's cruise line, to inject cash and join as an operational partner, Petterson said. Last week, the negotiations turned into "a game of chicken that just blew up in everyone's face," he said. Talks fell apart.

Khosa didn't immediately respond to a request for comment.

Villa Vie announced that the Odyssey was suspending operations while it was docked this week at the port of Sihanoukville in Cambodia. The price of MGO in Cambodia is now $2,200 per ton, Petterson said, and in Manila, it is even higher.

Passengers told Business Insider they were given only eight hours to disembark.

Barbara Fiegel, 62, who had lived with her partner aboard the Odyssey since December 2024, returned to the ship with her partner later that evening and the following day to pack their belongings.

"I couldn't stop crying," she said.

Petterson said the company could undergo a court-supervised restructuring that would allow management to remain in control, or it could have to liquidate.

"We just don't have the financial ability to sustain normal operations for the time being," he said. "So we're protecting the asset and laying it up until we can find a solution going forward."

Petterson expressed pride in the "community of almost 400 residents" that sailed around six continents. He said letting them down felt "incredibly deflating."

"I'm working day and night to find a way to get through this," he said.

Joshua Nelken Zitser contributed reporting.

Have you spent time on the Villa Vie Odyssey as a cabin owner, renter, or staff member? If you have a story to share, get in touch with us at jzitser@businessinsider.com.