U.S. Govt lets Mariposa’s owner sink

Press, 14 June 1978, Page 12

U.S. Govt lets Mariposa’s owner sink

Frojn John Hutchison in San Francisco

When Pacific Far Fast Lines took out of service the last American passenger vessels afloat — the Mariposa and the Monterey, laid up after final voyages this year — it was widely assumed that the company would continue to sail its considerable fleet of cargo vessels, long known for their profitable trading in the Orient and South Pacific. But the luxury liners, which had called so often at New Zealand ports, were hardly brought to berths when it became publicly apparent that the shipping line had far worse troubles than its failure to persuade the United States Government to continue subsidising the big cruise vessels. Pacific Far East Lines, it rapidly turned out, was broke, in debt, mortgaged to the gunwales and leaking badly. The Government, guarantor Of loans totalling about SIOOM and convinced that no more good money should be thrown after bad, has opened the seacocks and let the company sink. Apparently it will be liquidated. The company went into bankruptcy preliminaries last January, ostensibly td protect it from creditor claims while it tried to get back on its feet. It

listed debts of SIS9M, assets of SI67M and cash on hand of merely $BOOO. Since then it has lost another SIOM. Three of the line’s ships have been seized in foreign ports by creditors. A court order in San Francisco has just required two more vessels to put into American ports and transfer their cargoes, to prevent seizure. The company is the biggest tenant of the Port of San Francisco, to which it is almost S2M in arrears. Collapse of the firm could .cost the community as much as SIOOM annually in payroll and general business, according to one estimate. Two hundred employees received their last pay on June 15. The controlling interest in Pacific Far East Lines is held by the family of Joseph Alioto, former maycfr of San Francisco and a millionaire lawyer. The family has been publicly accused of mismanaging the company, charging it big fees for legal services, including one for SI.SM, padding the payroll with family and friends, and selling off a trade route to Australia and New Zealand. The Alioto family blames its reverses on an East Coast dock strike, high costs of converting its Ships to new cargo systems, and difficulty in obtaining bank credit.