Where do Crystal's woes leave advisors?

What are my agency's responsibilities in light of the Crystal Cruises' parent company filing? Do we have a legal obligation to warn clients that they might lose their money if Crystal never comes back? Is my agency liable for the refunds if Crystal doesn't give them?

A: Crystal's parent company filed for liquidation inBermuda, which has an unusual bankruptcy law that allows for court-appointed experts to try to save the company. It is similar to Chapter 11 in the U.S., but the main job of the provisional liquidators is to serve the interests of the creditor.

Crystal was on the ocean through April 29 and on the river through May. Crystal would resume operations after that, but that decision may be up to the provisional liquidators.

Crystal announced in January that guests on back-to-back sailings will get a refunds for unused days. The announcement was not clear about refunds for other cruises, and the law inBermuda gives the liquidators the power to stop payments.

There is no way for Crystal or its parent to make guarantees of sailing in the future or getting refunds at this point. Crystal's recent record of many months of delay in providing promised refunds for canceled sailings adds to the cloudy nature of its assurances.

Travel advisors have a legal duty to warn clients and prospective clients about supplier financial problems that have appeared in the trade press but that the average client wouldn't know about. There was no reason to give such a warning. As of now, Crystal's parent's problems fall squarely within this rule, so you need to warn them of the facts as they appear in the trade press.

Even if the Fair Credit Billing Act doesn't require card companies to do so, you need to advise clients to pay by credit card, as the card companies will usually give refunds if the merchant fails to do so.

If a client pays cash for a future cruise that never operates, your agency could be held liable for the client's loss if you failed to warn them about Crystal's parent's problems.

I am aware that such warnings will tend to make Crystal's possible demise more probable, and that is a tragedy, as stated on CruiseTruth.com, the website of agency owner and fellow Travel Weekly columnist Richard Turen.