CREDITORS owed more than £600,000 by a collapsed cruise company are likely to recover less than 10p in the pound, it emerged yesterday.

Sealand Cruising, which was based in Richmond, North Yorkshire, went into voluntary liquidation last month with the loss of 26 jobs.

The company owes a total of £681,925 and has assets worth only £66,679.

Once staff have been paid the £10,819 they are owed, there will be only £55,860 left for creditors.

The company recently moved out of Richmond and rented the 7,000sq ft Telephone Repeater Station, in nearby Brompton-on-Swale, increasing staff numbers from 12 to 26.

The move was heralded by general manager Kelvin Marsh as the first stage in a ten-year expansion plan that would increase turnover from £3m to £100m and create 100 jobs. The scheme included opening a US office in Florida and four more in Europe.

The collapse of the company was attributed to increased competition in the market and the failure of its sister software company.

Liquidator David Horner, of David Horner and Company, in York, said: "The directors attribute the company's failure to the inability to compete with the cruise suppliers marketing direct to customers, the increased overheads caused by the move to new premises in 2005, and to the higher than envisaged information technology costs."

The company was set up in 1999 by experienced travel agents Ray and Jean Merry, to cash in on a boom in the cruise market.

The same year, they set up Cruisesolver, to develop a software package that would offer travel agents up-to-the-minute information on available cruises. More than £70,000 was invested in the project, which liquidators say is now worthless.

The company's main business was an initial success, with Sealand taking 850 people on the QE2 to Liverpool for the Beatles Festival in 2000.

In 2001, it had a turnover of £268,577, with profits of £42,319.

In 2003, after two private investors became involved, the company decided to set up 20 home workers to take calls, requiring what liquidators described as a "significant" outlay for information technology and communications equipment.

Following a dispute over the Cruisesolver system, the investors left and the Merrys moved the home workers into the office.

Mr Merry became ill last year and was forced to step down as a director, shortly before the company moved to Brompton, in December.

The new premises immediately had problems, after storms and high winds blew out office windows and damaged the IT system.

Bookings were affected soon afterwards when the phone lines were innoperative for three days.

Last month, Mrs Merry received the accounts for last year, which showed a loss of £221,823, and placed the company into voluntary liquidation.