Facing a deadline to pay off $82.5 million in bonds, Trailer Bridge Inc. filed for Chapter 11 bankruptcy Wednesday to give it time to restructure its debts.
The Jacksonville-based marine and truck freight company said it does not expect the bankruptcy process to interrupt its business.
“While not an easy decision, we are confident that restructuring our business and capital structure will allow us to continue to provide reliable, uninterrupted service to our customers,” co-CEOs William Gotimer and Mark Tanner said in a news release.
Gardner Davis, an attorney at the Foley & Lardner firm in Jacksonville who is representing Trailer Bridge, said the majority of the company’s bondholders are supporting the company, so he expects the company to be able to restructure its debt successfully.
Trailer Bridge said it hopes to complete the bankruptcy process by the end of the first quarter of 2012.
“Trailer Bridge has a strong core business. It remains business as usual,” Davis said.
“The only reason for the filing was the $82 million of bonds becoming due, and it’s a crazy environment to refinance debt. If Greece can’t refinance it, you can imagine how hard it is for a local company,” he said.
Trailer Bridge provides freight service by barges that run between Jacksonville; San Juan, Puerto Rico; and the Dominican Republic.
With the weak economy slowing down business, coupled with higher fuel costs and other expense hikes, the publicly traded company recorded a net loss of $2.3 million in 2010 and a loss of $14 million on revenue of $53.8 million in the first six months of 2011.
Its midyear financial report filed in August noted that the company could be forced to file for Chapter 11 bankruptcy if it could not refinance the $82.5 million in senior notes that would come due in November.
The company had not made any public announcements since then but said in a Securities and Exchange Commission filing in October that CEO Ivy Barton Suter resigned and was replaced by Gotimer and Tanner.
Trailer Bridge received two extensions from bondholders to pay off that debt but finally decided Tuesday night to file to restructure under Chapter 11.
The filing in U.S. Bankruptcy Court in Jacksonville lists $102.7 million in assets and total debts of $118.1 million.
In addition to several firms that hold some of the $82.5 million in notes, a list of Trailer Bridge’s 20 largest unsecured creditors in the bankruptcy filing includes Suter, who is owed an “undetermined” amount.
The largest creditors also include the Jacksonville Port Authority, owed $101,111, and CSX Corp., owed $156,153.
According to the most recent SEC filings, Trailer Bridge’s largest stockholder is the family of the company’s late founder, Malcolm McLean, which owns 43 percent of the shares.
Trailer Bridge’s stock price had already fallen below $1 after the midyear report filed in August and the company received a notice in October from the Nasdaq Stock Market that it could be delisted if the stock does not return above $1 by April.
The stock, which trades under the ticker symbol “TRBR,” had closed at 33 cents on Tuesday and fell to a low of 13 cents Wednesday after the announcement of the bankruptcy filing.
Davis said the Chapter 11 filing is a good step for the company because it will allow Trailer Bridge to restructure its balance sheet and continue operating the business.
“This is positive for the customers, the employees, the port and the Jacksonville economy,” he said.
“We fully expect to meet the needs of our customers, our commitments to employees and our obligations to suppliers during this restructuring,” Gotimer and Tanner said in the company’s news release.
“This plan, if successfully implemented, will result in a revitalized company with a vastly improved and deleveraged balance sheet,” they said.
356-2466