Hornbeck Offshore - possible chapter 11

I heard a nasty little rumor that HOS is preparing to file for chapter 11 bankruptcy. Their financials don’t seem so bad, but they were awfully tight lipped on the last earnings call. What do you guys think? It could be a good play so that they don’t burn precious cash in the event of a further extended downturn. It could put them in a great strategic position when things turn around 2-3 years from now.

It’s probably the same guy that started talking about Chouest pay raises awhile back!

I’ve learned to never say never but that rumor is probably true for another company that starts with H.

For many years, many of the airlines operated in Chapter 11. Some were in and out of Chapter 11 several times.

Chapter 11 is voluntary reorgainization with the debtor in control of the company. It is merely a legal status that enables companies to avoid or reduce many types of legal obligations, and to keep creditors from exercising rights which might interfere with management’s operation of the company, renegotiate debts and contracts, payment schedules, etc.

The only thing that would be a surprise, is if some of the boat companies do not file Chapter 11.

Thanks for your explanation Tugsailor.

My relationship with Hornbeck started a few years ago when I took a trip down to Covington looking for a job in oil and gas. I was offered a “mate in training” slot, which was a sizable (unacceptable) pay cut for someone that had been sailing master for a few years on foreign trading ships. Nonetheless, I was extremely impressed with Hornbeck’s office and my perception of their overall operations. I began buying HOS stock, a little here and a little there. The bad thing is that generally, when a company goes into chapter 11 bankruptcy protection, the stock is delisted and traded on the OTC markets. The stockholders end up last on the list of those who will get anything back in the bankruptcy proceedings. I really am just curious as to what those who work at HOS see in these market conditions.

Current status of OSV market conditions…

Keep buying that stock it’s selling at half of book value and that’s a really good deal.

[QUOTE=Fraqrat;168728]Current status of OSV market conditions [/QUOTE]

once referred to as “irrational exuberance

and this is the miserable old fart you get to blame for it all!

very low cost capital leads to excessive corporate borrowing during the good times but when the times go south like today, the same corporations can’t even service all their debt at even near zero interest. A moderate interest rate on corporate borrowing maintained at all times leads to more level business cycles. But who am I so say these things?..I am just another boob squawking in the wilderness!

Nah he’s a pawn the real culprits are behind the curtain…

[QUOTE=Fraqrat;168731]Nah he’s a pawn the real culprits are behind the curtain…[/QUOTE]

I need names!..all I see are little tiny black things at the inner circle. where are the names?

The names are the black dots around the pink circle click on the link and zoom in. It’s all the visual suspects anyways you’ll recognize 70% of them.

[QUOTE=Fraqrat;168733]The names are the black dots around the pink circle click on the link and zoom in. It’s all the visual suspects anyways you’ll recognize 70% of them.[/QUOTE]

where is the link to this web of intrigue?

alright I found the link and read the names in the inner circle except I also noted that a good many shown are also dead…are they controlling the earth from the “other side”?

[QUOTE=Contrentment;168714]Thanks for your explanation Tugsailor.

My relationship with Hornbeck started a few years ago when I took a trip down to Covington looking for a job in oil and gas. I was offered a “mate in training” slot, which was a sizable (unacceptable) pay cut for someone that had been sailing master for a few years on foreign trading ships. Nonetheless, I was extremely impressed with Hornbeck’s office and my perception of their overall operations. I began buying HOS stock, a little here and a little there. The bad thing is that generally, when a company goes into chapter 11 bankruptcy protection, the stock is delisted and traded on the OTC markets. The stockholders end up last on the list of those who will get anything back in the bankruptcy proceedings. I really am just curious as to what those who work at HOS see in these market conditions.[/QUOTE]

That’s why I don’t invest in anything but index funds. Sure, it’s possible to beat the market and hit a home run, but the statistics don’t favor investors meddling in individual equities when considering a long term horizon. The way I see it, if Wall Street banks with hordes of tirelessly laboring ivy-league financial maestros can barely beat the market, then the odds are not in my favor.

[QUOTE=Fraqrat;168731]Nah he’s a pawn the real culprits are behind the curtain…[/QUOTE]

Influential wealthy people network with other influential wealthy people so they can remain wealthy and influential. No big revelation there; it’s always been that way.

Nothing nefarious at all about the global elite and all their banksters having a big meeting. You do realize that their are a lot of very influential world leaders who don’t have their names on the public list who some how mange to get their picture taken at the meetings. But you’re right nothing to see here move along. http://vigilantcitizen.com/latestnews/bilderberg-2015-the-agenda-and-the-attendee-list-of-this-elite-conference/

IIRC, people like Trump and Carl Ichan made big money investing wholesale in airlines and other companies in Chapter 11. Whether people like us can make money investing retail in companies like HOS remains to be seen.

If I had a lot of HOS stock, I might buy more to average down my cost. However, I have probably lost money more often than I have made it with that strategy. There are too many ways for the shareholders to get diluted by the management and creditors of a company in Chapter 11.

[QUOTE=Honest_Abe;168739]That’s why I don’t invest in anything but index funds. Sure, it’s possible to beat the market and hit a home run, but the statistics don’t favor investors meddling in individual equities when considering a long term horizon. The way I see it, if Wall Street banks with hordes of tirelessly laboring ivy-league financial maestros can barely beat the market, then the odds are not in my favor.[/QUOTE]

This! Most people who play in stocks will underperform the market, even if they make a good pick or two. Unless you get lucky and pick something like a young Microsoft as your first stock, put a LOT of money in it, and hold on for years you will underperform.

If MBAs who are trained in stock picking lose a majority of the time there is no point in regular people trying at all.

actually HOS appears to be fine as of June 30th…they have plenty of cash and their total debt is only about half of assets so provided they don’t blow all their money on more vessels then they are going to be ok for another year plus.

For HOS has around 300 million in the bank. To go into any type of bankruptcy they would have to have 0 boats working, not lay any one off, and not sell any boats. As it stands for the last 2 earning reports they are breaking even on operations and with the genius move of selling the boats on government back to the government yet retaining the operations contracts they are actually showing a profit of at least 30 million each quarter. How many more boats they have to sell I don’t remember, but it they should have enough to get them through the year.

Seacor is kind of doing the same thing, but they don’t have the sure sell’s that HOS has with the government boats. Though they are selling what ever they can that will net them a profit, but that’s nothing new, they have always sold boats even in the best of times if the asking price was what they wanted.

Now Harvey on the other hand…

My prediction is that Seacor and Chouest will split Harvey. Chouest taking all the 6000 ITC boats, Seacor all the rest. The fun part is will it be a last second buy out or will they just wait for the banks to take everything. Either way it will be a fire sale and hell you may see Tidewater and HOS get in on it.

post another picture of Shane to remind us all

[QUOTE=c.captain;168757]actually HOS appears to be fine as of June 30th…they have plenty of cash and their total debt is only about half of assets so provided they don’t blow all their money on more vessels then they are going to be ok for another year plus.[/QUOTE]

The whole story about a possible HOS Chapter 11 is just speculative BS from an unreliable source.

Even though a company may still have plenty of solvency, Chapter 11 may still be attractive to consider based upon what kind of contractual obligations they have. The airlines went chapter 11 to reduce the cost of their union employees. The main thing that drove GM into Chapter 11 was the recession, but also it was the cost of lifetime medical benefits for their union retires. Even if a company appears to be in pretty good shape financially, debt instruments often contain covenants requiring certain levels of performance and reserves and give the creditors additional rights if those measures are not met. There are many reasons why a company that appears to be in pretty good financial condition on the surface might chose to file for Chapter 11 protection from overly aggressive creditors.