"The Company has been operating with a highly leveraged balance sheet for some time now, mostly due to the conversion efforts associated with the Midnight Express, " said Lyle G. Stockstill, Torch Offshore, Inc. Chairman and Chief Executive Officer. "Our liquidity issues were worsened by the competitive marketplace in which we operate as the Gulf of Mexico offshore construction industry remained very competitive in 2004 with an extremely tight pricing structure."
In late December 2004, the Company announced that three of its vessels, the Midnight Express, Midnight Wrangler and Midnight Eagle, had been arrested by U.S. Marshals based upon actions taken by certain creditors of the Company. "When we determined that it would be difficult to have these seizures released so that our vessels could go back to work, it was concluded that Chapter 11 reorganization was the best course of action for the Company," said Stockstill. "The decision to seek protection under Chapter 11 will allow the Company to restructure its balance sheet while we continue to operate our fleet of vessels."
During the Chapter 11 proceedings, Torch will continue to operate in the ordinary course of business. The Company said that it intends to request Court approval to, among other things, continue payment of pre-petition and post-petition wages, salaries, incentive plans, and medical, disability, vacation and other benefits. The Company intends to do business with customers and vendors in the same manner as before.
"We appreciate the loyalty and support of our current employees," said Stockstill. "The dedication of our employees is critical to the success of the Company. In addition, I would like to thank our customers, vendors and business partners for their continued support during this process. We will do our best to have a successful reorganization."
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