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May 7, 2009

Gulfmark Offshore sues Bender

Bender Shipbuilding & Repair has been hit with another lawsuit.

Gulfmark Offshore, Inc., yesterday filed suit in the U. S. District Court for the Southern District Of Alabama against Bender Shipbuilding & Repair Co.,Inc., and Bender officials Thomas B. Bender, Jr., Bruce J.Croushore, David Barnett, Joseph W. Mangin, Jr. and Frank Terrell.

Last month GulfMark Offshore, announced that it would record an impairment charge against its construction-in-progress of $46.2 million in the first quarter of 2009 related to three vessels in which the "shipyard contracted to construct three vessels for the company is in default of the contract" with construction of the vessels "no longer in progress."

Gulfmark Offshore also said it planned to pursue all contractual and legal remedies available to recover its investment. The lawsuit filed yesterday is part of that pursuit and you can read the complaint HERE.

Among the assertions in the complaint is that the hulls and materials for the ships are Gulfmark's property. Another is that at the time that a change order to the contract was executed in October 2008 (with Gulfmark making a payment to the yard of $$8,000,744) and at all times subsequent thereto, Bender was insolvent in that the corporation was unable to pay its debts as they became due. GulfMark alleges that by October 13, 2008, and continuing to the present, Bender was in the "zone of insolvency" and had a heightened duty of care and loyalty not to the shareholders of the company, but rather to its creditors.

The complaint says that had GulfMark known the true financial condition of Bender, "including the full blown nature of its existing default to OSG America, L.P.," it would not have acted to perform its payment obligations under the contracts"

OSG AND BENDER: The latest information to emerge on the OSG America ships now no longer under construction at Bender is in a 10Q filied with the SEC yesterday by OSG America's parent OSG, which notes:

On March 13, 2009, the company entered into a termination agreement with Bender. Under the terms of the agreement, Bender agreed to transfer ownership of the unfinished vessels (and all related components and equipment) to OSG in their current state of completion in consideration for which OSG would, among other things (1) pay and/or reimburse Bender for the costs associated with positioning the units for transportation to the alternative shipyards and certain other material and labor costs related to construction of the units, (2) assume certain specified obligations related to construction of the units and (3) render a payment of $14,000,000 to a third party for the release of priority liens on the vessels being transferred to the company. The amounts referred to in (1), (2) and (3) above are estimated to approximate $68,000,000 of which $35,885,000 was charged to expense during the three months ended March 31, 2009. The company intends to complete two of the six ATBs and the two tug boats at alternative shipyards.

OSG America, incidentally, was named with Bender in a suit brought last year by EMD which, essentially asserted that EMD had not received payment for the engines supplied for one of the OSG America ATB's. (You can read the complaint HERE). That case now looks to have been resolved.

EARLIER LAWSUITS

Other lawsuits faced by Bender include one brought by Trico Marine last December, alleging breach of contract in relation to repayment of sums advanced pursuant to various letter agreements. Under these agreements, when Bender started experiencing cash flow problems, Trico made direct payments to subcontractors working on two PSV's contracted for from Bender in 2006.

You can read the Trico complaint HERE

And a lawsuit brought by Seacor in March this year arises from the destruction by fire of a 265 ft AHTS while awaiting sea trials. In its complaint Seacor asserts that it had paid Bender more than $24 million to build the vessel and had furnished equipment for the vessel valued at $5.4 million.

The complaint alleges, among other things, that Bender failed to adequately insure the vessel, procuring insurance for only $20 million.

You can read the SEACOR complaint HERE


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