Court filing reveals ‘robust interest’ in Bouchard’s assets
The tug and barge operator is considering both sale and restructuring options
(HOUSTON) — Tugboat and barge operator Bouchard Transportation Co. Inc. has secured approval to solicit creditor votes for its proposed reorganization plan as it continues its efforts to sell its assets in bankruptcy, Reuters reported.
Chief U.S. Bankruptcy Judge David Jones signed off on the company’s disclosure materials for the plan during a virtual hearing on Wednesday. Bouchard, represented by Kirkland & Ellis, filed for Chapter 11 bankruptcy protection in September with $230 million in debt.
Bouchard is now pursuing a dual-track path out of bankruptcy, Reuters said, considering both sale and restructuring options. The company has until July 7 to select a lead bid for its assets. Other interested buyers will then have until July 16 to submit competing bids. If additional bids are made, an auction will be held on July 19 and a sale hearing will occur on July 23.
Christine Okike of Kirkland & Ellis told Jones during Wednesday’s hearing that Bouchard has received “robust interest” in its assets from “a number of parties.”
The preliminary statement in the disclosure document summarizes many of the problems faced by Bouchard, saying the company’s current challenges “proved insurmountable on an out-of-court basis.”
“Those challenges began in October 2017 with a tragic explosion off the coast of Port Aransas, Texas, that claimed the lives of two crewmembers,” the statement reads. “The debtors fully cooperated with regulatory authorities as part of several health, safety, and environmental inspections and proceedings thereafter. That process led to several operational improvements that enhanced the debtors’ reporting, training, inspections, oversight, and overall compliance with rules and regulations relating to health, safety, and environmental matters, including the ISM Code. Despite those best efforts, in December 2019, the debtors’ classification society, the American Bureau of Shipping (ABS), canceled its longstanding contract with the debtors. The United States Coast Guard subsequently lifted the debtors’ document of compliance certification (DOC). The debtors’ major customers require a DOC.”
“Without requisite regulatory certifications, the debtors could not service customers or generate positive cash flow,” the statement says. “Out-of-court funding sources were tapped and then exhausted. Non-core asset sales could not close on the necessary timeline. COVID-19 adversely impacted the febtors’ efforts and industry demand.”