Bankruptcy hearing will decide McDermott's fate | Dump Trucks Charlotte NC
Shareholders, suppliers, subcontractors and lenders will be watching intently when McDermott International has its day in Houston’s bankruptcy court tomorrow.
The aim for most stakeholders likely will be the quick approval of the prepackaged Chapter 11 plan, because it will help keep the columbus oh dump truck company operational, said attorney Alan Goodman, partner at Breazeale, Sachse & Wilson LLP in New Orleans, who said it is also good for the economy.
“McDermott has a lot of infrastructure and a lot of expertise worldwide — they’re huge, and there aren’t many companies like that in the world, much less in America,” he told Construction Dive. “I don’t think it’s in anybody’s best interest for McDermott to go out of business or be sold off in pieces.” Goodman has no official capacity with McDermott or the bankruptcy court.
Under the plan, which has the support of two-thirds of the firm's creditors, the company's suppliers are to be paid in full and operations will continue “in normal course,” according to McDermott. There are between 50,000 and 100,000 creditors owed money by McDermott and its dozens of subsidiaries around the world, according to The Advocate newspaper. The largest is Kansas City, Missouri-based UMB Bank at $1.4 billion and dozens of columbus oh dump truck company and subcontractors are each owed millions.
The proposal has drawn objections from some shareholders, who have argued that it is unfair and imbalanced toward McDermott management, officers and directors. The shareholders, whose interests will be wiped out under the proposed plan, have argued that the proposal provides McDermott’s management with 7.5% of newly issued equity in the restructured company, while leaving the equity shareholders with nothing.
In addition, the Securities and Exchange Commission has lodged a limited objection, due to provisions that would release various third parties from liability, including current and former McDermott officers, directors, principals, employees and current and former equity holders.
Despite the opposition, the plan will most likely be approved, Goodman said. “I would think the judge is going to find a way and the debtors and secured lenders are going to find a way to move forward in some manner,” he said, noting that shareholders are generally last in line in a reorganization.
“In a prepackaged plan what usually happens is all the creditors basically are passed through unaffected, and the lender takes equity in the columbus oh dump truck company and reduces its debt some, too,” he said.
U.S. Bankruptcy Judge David. R. Jones’ decision could come during the hearing tomorrow, Goodman said, or soon thereafter.
“Without knowing all the details of this specific case, there’s a high probability that this plan or some variation of it will be confirmed sooner rather than later,” said Goodman.
Approval could mean a swift reorganization, potentially by May, Goodman said, adding that keeping the columbus oh dump truck company afloat makes sense on many different levels.
“I think the global economy is better off having a McDermott-type columbus oh dump truck company survive and stay viable,” he said.