Any future for Bouchard Transportation evaporated this summer when a bankruptcy judge approved a plan to sell the company’s assets.
Judge David Jones of the U.S. Bankruptcy Court for the Southern District of Texas on August 26 approved a plan to divide the Long Island company’s assets between two buyers to give partial recovery for creditors.
Efforts by Bouchard to develop an alternate plan allowing the company to retain some assets and stay in business failed to come to fruition.
The judge ruled after the creditor committee negotiated a settlement with Wells Fargo, which held liens against some of Bouchard’s tugs and barges. Court documents indicate Wells Fargo agreed to subordinate a $20 million claim and contribute $50 million toward settling the bankruptcy case.
The creditors’ committee told the judge the settlement with Wells Fargo allowed the possibility of unsecured creditors receiving distributions. Those creditors objected previously, arguing the plan did not provide sufficient means to settle their claims.
Jones overruled the one remaining objection from former CEO Morton Bouchard III. His lawyers objected to the language of the releases, saying it could hurt their client’s defense against possible claims against him.
The plan presented to the court earlier in August divided the assets between two bidders. Wells Fargo was part of one group that would buy the vessels on which it had liens. JMB Capital Partners, which provided debtor in possession financing during the bankruptcy proceedings, got to purchase the remainder of the fleet. Their combined bids totaled more than $245 million.
Under the plan approved by the court, a financial group led by Wells Fargo would acquire eight tugs and 10 barges. Wells Fargo through Rose Cay submitted a bid of $130 million with $100 million being a credit against debts due to the bank on the assets with only $30 million in cash.
Meanwhile, 17 tugs and 12 barges would be sold to JMB. It offered $115.3 million, of which $20.8 million would be cash with the remainder being a credit against the debtor-in-possession financing JMB provided to Bouchard at the beginning of the bankruptcy process.
In October, Seattle-based Centerline Logistics, one of the largest marine petroleum transportation companies in the country, announced its acquisition of several former Bouchard articulated tug and barge (ATB) units. One of the ATBs, renamed Robin Marie and Joni Lee, was built in 2016. It becomes Centerline’s largest and most advanced ATB. The unit is 718 feet long with a capacity of 260,000 barrels.
“With the added vessels’ carrying capacity, operating capabilities and safety systems, we have greatly enhanced our ability to quickly and efficiently serve our growing markets,” Matt Godden, president and CEO of Centerline Logistics, said in a prepared statement.
Bouchard declared bankruptcy in September 2020 and proposed reorganizing its operations. It had $230 million in debt as the Covid-19 pandemic worsened financial problems, including those resulting from a fatal Texas barge explosion in 2017.
But in the spring, the company said it had not been able to find a partner and would sell its assets. The move signaled the end for a company that dates to 1918 and was once the nation’s largest independently-owned petroleum barge company. •