Hermitage Offshore files for Chapter 11 following slump in oil price
Offshore support vessel provider Hermitage Offshore and 28 subsidiaries have filed for voluntary Chapter 11 petitions amid global oil price slump and coronavirus pandemic.
Hermitage Offshore said on Tuesday that, together with its subsidiaries, it had filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York.
The company said it had taken this action following a prolonged slump in global oil prices, driven in part by the global coronavirus pandemic, and its effect on its business.
“While the company would have preferred to complete its financial restructuring out of court, it was unable to reach a consensual agreement with its lenders, which made filing Chapter 11 necessary to provide a single forum for all continuing conversations with its lenders”, Hermitage said.
Hermitage anticipates that its business operations and relationship with its customers and vendors will not be adversely affected by this proceeding while it works constructively with its lenders toward a consensual resolution.
Under Chapter 11 protection, the company’s vendors are afforded “administrative” status for all shipments made, or services provided, subsequent to the filing.
As a result, payments for new shipments or services will be made in the ordinary course of business either by the company or one of the company’s managers, which is not part of the Chapter 11 filing.
The company’s customers are also afforded the “administrative” status and they will continue to receive uninterrupted service from the company and the company will perform all of its duties and obligations under its current and future charter party agreements.