May 31, 2009
Hawaii Superferry files for Chapter 11
Hawaii Superferry and its parent company, HSF Holding Inc., filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court in Delaware on May 30.
The company issued the following statement:
As a direct result of the Hawaii Supreme Court decision last March, Hawaii Superferry had to shut down operations. There has been no relief from that decision. With no ability to operate, the company has had no revenues, only ongoing expenses to maintain the vessels Alakai and Huakai, our second ship.
Our recent objective was to charter the ships outside of Hawaii, which would keep Hawaii Superferry operating at some capacity. Although there are potential charter opportunities around the world, they take time and haven't materialized in time for the company to meet its required financial obligations. Our efforts to refinance and restructure the company for this interim period with additional investment have not been successful, as yet. Accordingly, a filing of Chapter 11 was an unavoidable next step.
Hawaii Superferry would like to thank the legions of people and businesses who have supported us. We are proud to have provided thousands of Hawaii residents with the experience of inter-island travel by sea and are assured by the fact that the overwhelming majority of people around the state view Hawaii Superferry as a much needed and wanted transportation service.
One potential charterer for the Alakai and Huakai would appear to be the Pentagon. The two Joint High Speed Vessels (JHSV) in the defense budget now before Congress are of basically the same design. And in testimony to the House Armed Services Committee on May 13 Defense Secretary Robert Gates said:"to improve our intra-theater lift capacity, we will increase the charter of Joint High Speed Vessels (JHSV) from two to four until our own production program begins deliveries in 2011."
Meanwhile, Superferry has just $1 million in cash and is facing a $2.9 million principal and interest payment on one of the ferry construction loans.
The U.S. Maritime Administration guaranteed construction loans for the two catamarans on which $135.7 million of principal is outstanding while $22.9 million is outstanding on loans from Austal USA.
The Maritime Administration and Austal USA have first and second mortgages on the Superferry vessels, while the State of Hawaii has a third mortgage.
Superferry is also in default to Guggenheim Funding LLC for $51.7 million related to a secured note in August 2007.
J.F. Lehman & Co., the largest private investor in the project, put up $85.2 million of the $92.9 million issued in preferred stock.
Unsecured creditors listed in the bankruptcy petition are headed by the Harbors Division of State of Hawaii, which has a claim for $731,080 (which Superferry disputes). MTU is owed $544,653 for engine maintenance related services. Hornblower Marine Services is owed $113,685 for management fees and services. Austal USA is owed $78,198 for travel and labor for professional services,
You can see the Hawaii Superferry petition HERE
You can see the HSF Holding petition HERE