Harvey Gulf Reorganization Plan Approved
Harvey Gulf International Marine, the New Orleans, La.-based marine transportation company that operates a fleet of about 60 offshore supply vessels serving the deepwater oil and gas industry, announced May 23 the U.S. Bankruptcy Court Southern District of Texas, Houston Division, has approved the company’s plan for reorganization under Chapter 11 bankruptcy. Harvey Gulf filed for Chapter 11 bankruptcy protection on March 7.
Harvey Gulf CEO Shane Guidry touted the brief 77-day period between filing for bankruptcy and plan approval as proof that it’s business as usual and full speed ahead for the company.
“As I have been telling my customers and others in the industry, this has always been a debt-for-equity swap, with no changes in operations, personnel, safety, etc.,” Guidry said in a statement. “This will be best shown by Harvey Gulf’s achievement of five years without a recordable incident company-wide this coming August—something no one in our industry has done for as long as I can remember.”
At the same time Harvey Gulf announced approval of its reorganization plan, the company also announced a long-term charter with Hess for three of Harvey Gulf’s 310-foot LNG platform supply vessels and one 300-foot platform supply vessel. That agreement offsets a contract lost when Hornbeck Offshore acquired Aries Marine, with whom Harvey previously had a charter agreement.
According to an article by The Wall Street Journal (“Offshore Services Company Harvey Gulf Seeks Court OK to Exit Bankruptcy,” published May 22), Harvey Gulf owed close to $1.3 billion at the time the company filed bankruptcy. What’s more, the majority of that debt was held by non-U.S. citizens, which could have jeopardized Harvey Gulf’s qualification as a Jones Act company.
Under the agreement, U.S.-based Black Diamond Capital Management will emerge as the primary shareholder, but even that company filed objections to the governance structure set forth in the reorganization plan, according to The Wall Street Journal story. The Wall Street Journal’s story also fleshed out the compensation package for Guidry, who stands to pocket at least $40 million over a five-year period if he stays with the company for that period.
Maintaining its status as a Jones Act-compliant company is a key concern for Harvey Gulf, a company that stretches back to the 1960s. Just over a year ago, Guidry bought a full-page ad in The Wall Street Journal urging President Donald Trump to maintain the Jones Act.