After moving the case rapidly through the court, Trailer Bridge Inc.’s Chapter 11 reorganization plan was confirmed Friday in a relatively quick hearing in U.S. Bankruptcy Court in Jacksonville.
The reorganization will leave some recovery for Trailer Bridge shareholders after all.
The reorganization plan was confirmed by U.S. Bankruptcy Judge Jerry Funk exactly four months after the company filed for Chapter 11. Trailer Bridge, which provides freight shipping services between Jacksonville, Puerto Rico and the Dominican Republic, wanted to move the case quickly through the court so there would be no impact on its business operations.
“We’re glad we passed this milestone and we’re looking forward to getting back to running the business,” co-Chief Executive Officer Mark Tanner said after the hearing.
Gardner Davis, an attorney at Foley & Lardner in Jacksonville who represented Trailer Bridge in the case, said the company expects to officially emerge from bankruptcy March 30.
Trailer Bridge filed for Chapter 11 in November as it faced a deadline to pay off $82.5 million in senior notes. Under the reorganization, those notes will be replaced with $65 million in new notes and the noteholders will be issued new stock representing a 91 percent stake in the company.
Current shareholders will be given the choice of receiving 15 cents per share for their stock or receiving shares of the company’s new stock, which come out of the other 9 percent.
Under the final version of the plan, current shareholders would have received nothing if there was not enough money to pay off at least 85 percent of the claims of unsecured creditors.
At Friday’s hearing, another attorney representing Trailer Bridge, Gabriella Zborovsky of DLA Piper in New York, said unsecured creditors will be paid 95 percent to 100 percent of their claims.
Zborovsky told Funk that there were a “handful” of objections to the plan that were resolved before Friday. No one raised any objections at Friday’s hearing, which lasted only 27 minutes.
Everyone involved in the case was happy with its speedy resolution.
“A number of parties were skeptical that we could meet these milestones,” Zborovsky said.
“Including this court,” Funk chimed in.
“We shared the court’s reserve,” said Richard Thames of Stutsman Thames & Markey in Jacksonville, who represented the committee of unsecured creditors in the case. But after resolving their concerns, the creditors supported the plan.
“We’re glad that we still have a good corporate citizen here in Jacksonville,” Thames said.
“Excellent job, unbelievable. I want to congratulate everybody involved,” Funk said before adjourning the hearing.
“I’m still amazed, but I’m glad it happened,” he said.
With the reorganization, Seacor Holdings Inc. will have a big say in Trailer Bridge’s operations. The plan does not say how much stock Seacor will own, but the Fort Lauderdale-based company holds a majority of the senior notes.
The plan does call for Seacor to have three seats on Trailer Bridge’s seven-member board of directors.
Seacor is a publicly traded company that provides equipment and services largely to support oil and gas exploration, and also has a marine transportation segment that ships petroleum products and chemicals.
The reorganization plan does not say anything about Trailer Bridge’s management, but Tanner said he and William Gotimer will remain as co-CEOs.
“That’s the plan for the time being,” he said.
Trailer Bridge’s new stock is not expected to be traded on the major stock exchanges. Its current stock had traded on Nasdaq but was delisted after the bankruptcy and now trades in the Pink Sheets, an over-the-counter trading market. The new shares that will be issued may also end up trading in the Pink Sheets.
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