Harvey Gulf Files for Bankruptcy


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The Bubba Thug stands to lose the entire shooting match to his creditors and hopefully ends up flat broke holding his head in his own hands!

$989M in assets vs. $900M in liabilities my ass. That would make each of his 61 vessels worth more than $17M each (in today’s market!) I’d say maybe $5M each for total assets of $300M vs. $900M in debt! No FUCKING WAY can anyone keep such a house of cards standing when there is 1/3 the work and 1/2 the rates of 2014.

So ambitious Shane Guidry was and now it all comes down around his ears! He thought he’d be the next Gary Chouest but now is nothing more than a bankrupt deadbeat! HAHA!

I knew that would make you happy. I’m sure his creditors will be glad to offload it all at half price.

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Huh, guess building LNG wasn’t very green of them… :money_with_wings:

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Unfortunately he is going to come out of this with not as much damage as he should. And his partners/equity group are going to end up with no equity in the new company. This is the sad reality.

Subject: Harvey Gulf Strikes Restructuring Deal With Lenders Committee
The amazing thing is The Jordan Group gets nothing. Wow.

Harvey Gulf International Marine<https://platform.reorg-research.com/app#company/4907/intel>
Harvey Gulf Strikes Restructuring Deal With Lenders Committee Reserving 3% New Stock for Management Incentive Plan
Thu 02/08/2018 18:10 PM
Harvey Gulf International Marine and a lenders committee holding close to half of the company's debt have reached a restructuring deal in which management would get 3% of the new equity on a fully diluted basis, according to sources with knowledge of the matter. The deal paves the way for a $1.2 billion prepackaged chapter 11 filing, following GulfMark Offshore<https://platform.reorg-research.com/app#company/4456/intel/view/35530> and Tidewater Inc.<https://platform.reorg-research.com/app#company/4251/intel/view/35569>, which both filed for bankruptcy protection last year.

The New Orleans-based offshore service vessel provider, advised<https://platform.reorg-research.com/app#company/4907/intel/view/37202> by Blackhill Partners and Vinson & Elkins, aims to slash nearly $900 million of debt through a chapter 11 process, the sources said. Harvey's management team would also receive warrants for 11% more equity at strike prices reflecting three levels of enterprise value: $750 million, $1 billion and $1.25 billion.

Under the restructuring support agreement, the lenders, working with PJT Partners and Davis Polk, would swap their $1.2 billion of bank debt in three slices secured by essentially all of the company's assets into $350 million of five-year LIBOR+600 bps take-back paper and 97% of new stock, the sources said.

The company's private equity backer, Jordan Co., would not receive equity in the reorganized company, the sources said. New York City-based Jordan has invested in Harvey Gulf's shipyard business, and discussions are ongoing regarding lenders purchasing the shipyard business from Jordan, the sources said. The private equity firm supports the RSA, according to sources.

Upon filing for chapter 11, Harvey Gulf would not seek debtor-in-possession financing, as it has sufficient liquidity from its cash flow to support both the in-court restructuring process and continuing operations, according to sources.

The six-decade-old marine transportation company focused on the U.S. Gulf of Mexico would remain a private company, the sources added.

The parties will now seek wider support from lenders for the deal before filing for chapter 11, the sources said.

Harvey Gulf skipped about $30 million of coupon and amortization payments due Sept. 30, 2017, and entered into a forbearance<https://platform.reorg-research.com/app#company/4907/intel/view/42962> agreement with its lenders. The parties extended the forbearance deadline several times to today from the original deadline of Oct. 31 as the company, Jordan and the lenders negotiated the deal, including the equity split, the sources said.

The company's three tranches of bank debt were all quoted around 46/48 Wednesday, according to AdvantangeData.

Harvey Gulf's $115 million term loan A maturing in June 2018 tumbled to a trough of 38/40 in September last year from 78.5/79.5 on June 16, when Reorg reported<https://platform.reorg-research.com/app#company/4907/intel/view/37202> that Harvey Gulf had engaged financial and legal advisors, according to sources and AdvantageData. The term loan A was quoted at 46.5/48.5 Wednesday.

The company's $840 million term loan B due June 2020 dropped to as low as 33/35 in September from 56.5/58.5 on June 16 and recovered to 46.5/48.5 Wednesday.

The company also has a $270 million revolver due 2018 that is fully drawn, sources said. Bank of America serves as the bank debt's agent. The revolver was quoted at 46/48 on Wednesday, up from 37/39 on Jan. 9, according to AdvantageData.

In their restructurings, competitors GulfMark Offshore<https://platform.reorg-research.com/app#company/4456/intel/view/45193> cut $430 million of debt and Tidewater<https://platform.reorg-research.com/app#company/4251/intel/view/39544> shed $1.6 billion. Hornbeck Offshore Services Inc., which reported<https://platform.reorg-research.com/app#company/4260/intel/view/49135> a sharp year-over-year increase in fourth-quarter EBITDA to $13.9 million this week, is in ongoing debt discussions<https://platform.reorg-research.com/app#company/4260/intel/view/49188> with creditors after swapping term sheets<https://platform.reorg-research.com/app#company/4260/intel/view/43392> last year without a deal. Falling oil prices from more than $100 a barrel in mid-2014 to about $61 on Thursday rendered<https://platform.reorg-research.com/app#company/4251/intel/view/33745> many offshore drilling projects uneconomical. This led to muted offshore activities and a glut of service vessels without work.

Harvey Gulf, Jordan Co. and the financial and legal advisors to the company and the lenders did not immediately respond to requests for comment.

Equity Split

The parties had previously diverged on the post-reorganization equity split among constituencies during discussions last year.

Harvey Gulf's lenders received<https://platform.reorg-research.com/app#company/4907/intel/view/40654> a proposal that Jordan played a primary role in drafting. The proposal would have given 46% of new stock to the private equity firm and 14% to the management, Reorg reported in August. The proposal contemplated swapping 42.5% of Harvey's three tranches of bank debt into a first lien term loan, 32.5% into preferred equity and the remaining 25% into 40% of new stock.

The creditors countered<https://platform.reorg-research.com/app#company/4907/intel/view/43505> with a proposal giving themselves 97.5% of new equity and the management team 2.5%. The counterproposal would leave no new stock for Jordan but warrants for 2.5% of equity and $350 million of debt would remain on the balance sheet after reorganization.

Third-Generation Company

CEO Shane Guidry - Harvey Gulf's third-generation chief from the Guidry family - and Jordan acquired the company in 2008. The company began supporting the Gulf Coast transportation market in 1955, according to its website<http://www.harveygulf.com/about.html>. The CEO's son, Ashton Guidry, joined<https://new.reorg-research.com/data/documents/20171205/5a26bca219fb4.pdf> the company, according to a press release in 2014. The company sold its towing business in May 2014 and oil prices lost half their value by the end of that year.

Harvey Gulf lists 61 vessels on its website as of today, including two under construction. The company provides personnel and cargo transportation, offshore drilling construction and remote-operated-vehicle inspection support and accommodations support.

Harvey Gulf has 52 platform supply vessels, four multipurpose support vessels and five fast supply and utility vessels, according to its website. The company bases its operations in Port Fourchon in Louisiana.

The company bought Gulf Coast Shipyard Group in 2015<https://new.reorg-research.com/data/documents/20171018/59e732721cb7d.pdf> and founded an entity, Harvey Shipyard Group, to manage the shipbuilding assets in Gulfport, Miss., and New Orleans. Harvey's shipyard operating arm engages in construction of offshore support vessels and yachts.

Shane Guidry is the first to blame Trump for his bankruptcy. Like his company is the only one having issues in the latest downturn.

In May 2017, Harvey Gulf took out a full-page ad in the Wall Street Journal urging Trump to implement the proposal.

“Mr. President, We are American. We hire American. We buy American,” Shane Guidry, Harvey Gulf’s chairman and chief executive officer said in the ad, which is displayed on the company’s website.

“In keeping with your campaign promises, please support our industry like you have done with Carrier, Ford and other U.S. companies. Let us help you make America great again!”

I agree 100%. At the end of the day though they are not being held accountable for the problems they created. The lenders are going to take the huge hits, debt will be erased and then they will continue operating with a much cleaner balance sheet.

Tidewater did it, Gulfmark did it, Harvey Gulf does it and I wouldn’t be surprised to see HOS do it at some point. It’s almost a detriment to the honest operators that don’t file when their competitors shed debt like crazy and then become more competitive.

isn’t that the biggest FUCKING load of crap that Jordan Company gets completely hosed why Shane Boy would be able to keep even a fraction however Jordan gets what they get and I ain’t going to lose any sleep over their dilemma. I just want to see the Bubba Thug get NOTHING himself…I pray that in the end, the lenders end up with it all and that miserable Bayou POS ends up on the street!

The one thing that is tried and very true about these gulf coast companies is that when the sh*t hits the fan, mergers are not far off to help balance the debt. I for one also think this is not the final straw, just a formal setback.

How is it even possible to get off without owing Jordan a single penny? And what happens to the workers in a situation like this?

With everything Mr. Chouest has purchased lately, I’m sure he’s eying this one as a possible future investment as well. Or maybe not…

He’ll get away with it because they (Jordan group)more than likely were the signee on the loans. And the banks are the stupid ones because they were loaning everyone money like it was candy, they are getting what they deserve too.

Honestly, I think the Jordan Group wants out and may be willing to take a bath on their investments to get out. Have to remember that equity groups are using other people’s money so it’s not as personal for them when taking a loss.

What I don’t know is how many of the assets are in Shane’s name only. I do know that the LNG barge that’s being built is for Shane under the “Q-LNG” name. His ego took a big hit on this bankruptcy but since his ego is so big it still leaves him plenty of room for the future!

Sad but true just think 401k

They most likely have the assets divided into groups it’s going to take some digging many shell companies

Harvey’s bankruptcy proposal is:

Management gets 3% of the company. Lenders get 97% of the company. Old debt of $1.2 Billion is replaced with $350 million in new debt.

Management gets stock warrants allowing it to buy 11% of the new equity in the future.

If management is successful (an offshore oil patch recovery takes place), then management will make millions on the warrants. Presumably, “management” mostly means Shane.

Jordan gets wiped out because it’s current equity is worthless, and Jordan contributes nothing of value to future operations.

Shane and his management team are probably worth 3% for their customer relationships and to maintain Harvey’s continuity of operations, which are still producing positive cash flow (with no bank payments).

So what is 3% of new equity worth? $3 million? $6 million? Certainly, not over $18 million?

Looks like Shaun Guidry has a few other projects going:

You have to give Shane credit (pun intended) he does still have some tricks up his sleeve.

Anyone have any tales to share that involve hands-on experience with a company filing for bankruptcy? Does the atmosphere in the work place change significantly?

Was with Gulfmark. Not much difference. If you had stock though it vanished.

Looks like things have been well compartmentalized:


Wow, that’s even easier than intentionally driving down your stock to do massive buybacks…