Lyle Stockstill’s dream appears to be over.
In June, a U.S. District Court judge ordered the founder of Gretna, La.-based Torch Offshore to liquidate his pipelaying company’s assets when he couldn’t come up with approximately $200 million to save the company.
Stockstill gambled heavily last year with the conversion of a LASH (lighter aboard ship) into the 520’×102’×32’ pipelaying vessel Midnight Express, believing it would lift his company out of financial difficulty. (See WorkBoat, December 2004.) It didn’t happen. The conversion went way over budget, with estimated costs of over $109 million.
By January, the company had filed for Chapter 11 bankruptcy reorganization after three of its vessels were seized in December 2004.
Torch is said to have debts of $110 million, at least $70 million of which is directly connected to the conversion of the Midnight Express.
In April, Torch entered into an agreement to sell its fleet of vessels, all equipment and other assets to Cal Dive International, Houston, for $92 million.
But Torch’s unsecured creditors, who are owed millions, sued to block the proposed sale. Those creditors saw their best chance to recover any money in the company’s reorganization, not liquidation.
But a U.S. District Court judge ruled that Torch’s assets be liquidated. The ruling is under appeal.
According to a report in the The (New Orleans) Times-Picayune, Cal Dive will buy seven Torch vessels, including the Midnight Express, and other assets for $83.7 million. Epic Divers Inc. will purchase diving equipment aboard the pipelaying vessel Midnight Hunter for $2.8 million, and General Electric Capital Corp. will receive three of the company’s vessels worth $18.4 million.
The unsecured creditors will receive nothing. — Ken Hocke