Bouchard bankruptcy plan approved, clear route for sale
The bankruptcy judge hearing the Bouchard Transport case approved the bankruptcy plan which will see the company’s assets divided into two buyers with partial recovery for the creditors. Efforts to develop an alternative plan that would have allowed Bouchard to keep some of its assets did not materialize.
In a virtual hearing held on August 26, Texas bankruptcy court judge David Jones approved the plan that was presented to the court. They reported to the court that all of the debtor’s objections were lifted after the creditors committee negotiated a settlement with Wells Fargo Bank, which holds liens on part of the tug and barge fleet. Wells Fargo agreed to subordinate a $ 20 million claim and help $ 50 million to settle the bankruptcy, according to court documents.
The judge agreed to the plan after being informed that the settlement with Wells Fargo provided the opportunity for Bouchard’s unsecured creditors to receive distributions on their claims. Previously, they had opposed the plan saying it did not provide sufficient means to settle unsecured debts.
The only remaining objection to the plan came from the former CEO of the tug company Morton Bouchard III. Morton Bouchard was forced to step down as CEO when the bankruptcy court appointed a new executive to oversee the process. Bouchard’s lawyers opposed the plan on the basis of the language of the press releases, saying it could hurt Bouchard in his defense over possible claims related to his actions as CEO. Judge Jones overruled the objection.
As part of the plan presented to court earlier in August, two bidders will share the company’s remaining tug and barge fleet. Wells Fargo has been involved in a group buying the vessels on which it holds privileges and a second investment firm, JMB Capital Partners, which provided financing by the debtor in possession during the bankruptcy, is buying the other part of the fleet. . The combined offers exceeded $ 245 million, but the original terms only called for $ 50 million in cash.
Bouchard Transport went bankrupt in September 2020 by proposing to reorganize its operations. This spring, however, the company changed the plan saying it had not been able to find a partner and would proceed with the sale of its assets.
Founded in 1918, the company began by shipping coal. It has remained a family business for five generations, Morton Bouchard III being the sole shareholder. The company had run into problems after an accident in 2017 and declared bankruptcy earlier in 2020. Bouchard’s fleet consisted of 25 tugs and 22 barges which were sold in early August in a bankruptcy auction. .