On August 25, 2010, Trico Marine Services, Inc., filed petitions for bankruptcy in the United States Bankruptcy Court for the District of Delaware. According to Trico’s Declaration in Support of First Day Pleadings (the “Declaration”), the company offers “sub sea services” including trenching and surveying services used in the offshore oil industry. Trico also provides towing and supply and service vessels to the offshore industry in regions such as Africa, Brazil, Asia and northern Europe. Located in Woodlands, Texas, Trico Marine Services is the parent company of 43 subsidiaries. See Declaration at pgh. 4. A copy of Trico’s Petition for Bankruptcy is available here.
Events Leading to Bankruptcy
As a service provider to the oil industry, Trico’s overall performance is dependent to a large degree on demand for oil and nature gas. Beginning in 2009, the oil industry began reducing expenditures on oil and natural gas projects, due in large part to the “global economic slowdown.” Declaration at pgh. 27. The worsening in global economic conditions led to a drop in demand for oil, leading to less demand for Trico’s support services worldwide. Lacking sufficient cash, Trico could no longer service its debts and other obligations. Id. at pgh. 28.
Trico’s debt obligations include over $200 million in secured convertible debentures that are due in 2013. Pursuant to the indenture covering the notes, interest payments are due on May 15 and November 15 of each year, subject to a 30 day grace period. Declaration at pgh. 14. Under the grace period, Trico’s first 2010 interest payment came due on June 17, 2010. Unable to make this interest payment, Trico entered into a forbearance agreement with a majority of the secured noteholders on June 29, 2010. The forbearance agreement with the noteholders expired on August 15, 2010, however, Trico entered in second forbearance agreement that expired on August 24, 2010, the day before the company filed for bankruptcy.
Creditors of the Debtors
You learn a lot about a bankruptcy proceeding simply by looking at the creditors of the debtor and the amount of their claims. According to Trico’s bankruptcy petition, its largest unsecured creditors include:
- Deutsche Bank … $400 million (guarantee)
- Wells Fargo … $152 million (debentures)
- J. Compofelice … $2.4 million (employment agreement)
- R. Varma … $700,000 (employment agreement)
- Converteam … $665,000 (trade debt)
- Astoundry, Inc. … $311,000 (trade debt)
- Tectura Corp. … $203,000 (trade debt)
- Discovery Group … $184,000 (trade debt)
- Gleacher & Co. … $143,000 (trade debt)
- GE Capital … $90,800 (trade debt)