Trailer Bridge Announces Bankruptcy Filing; $15 Million Debtor in Possession Financing; and Pursuit of Restructuring Plan
November 16 2011 - 8:33AM
Business Wire
Trailer Bridge, Inc. (“Trailer Bridge” or the “Company”)
(NASDAQ: TRBR) today announced that it filed today a voluntary
petition under Chapter 11 of the U.S. Bankruptcy Code. The petition
was filed in the U.S. Bankruptcy Court for the Middle District of
Florida.
Strategic Reorganization
The Company’s filing of Chapter 11 comes one day after its $82.5
million 9.25% Senior Secured Notes (“Notes”) became due. The
Company believes that this action is the quickest and most
efficient way to restructure its balance sheet and ensure the
long-term strength of its operations. The Company hopes to complete
this reorganization by the end of the first quarter of 2012, and
will work closely with its existing debt holders to emerge quickly
from Chapter 11.
Subject to Bankruptcy Court approval, and with the help of its
financial advisor Global Hunter Securities Trailer Bridge has an
agreement for $15 million in debtor-in-possession, or DIP,
financing. This financing will enable to the Company to meet its
post filing obligations in the ordinary course of business,
maintain its sailing schedule and level of service and finance the
costs associated with the Chapter 11 process. During the Company’s
Chapter 11 case, Trailer Bridge, does not expect any significant or
unusual reductions in overhead, and will continue its regular
vessel deployment and sailing schedule. Trailer Bridge provides
multiple, weekly U.S. Flag sailings between Jacksonville, Florida,
and San Juan, Puerto Rico, weekly sailings between Jacksonville,
Florida, and the Dominican Republic, as well as weekly inter-island
service between Puerto Rico and the Dominican Republic.
Comments from Management
William G. Gotimer, Jr. and Mark A. Tanner, the Company’s
co-Chief Executive Officers, jointly stated, “While not an easy
decision, we are confident that restructuring our business and
capital structure will allow us to continue to provide reliable,
uninterrupted service to our customers. Since the Company was
founded in 1991, our management team has felt that our system
provides shippers with a completely integrated and cost-efficient
method of connecting the US mainland with Puerto Rico and the
Dominican Republic. With the average age of our vessel fleet of 16
years and use of 53-foot high-cube containers, Trailer Bridge
offers the most modern ocean freight transportation system in the
Caribbean. In recent weeks, we have seen significant volume
increases in our southbound freight service and increased revenue.
We believe that the efficiencies and service we offer shippers will
become increasingly important to shippers in the coming months and
years. ”
Messer’s Gotimer and Tanner concluded, “We fully expect to meet
the needs of our customers, our commitments to employees and our
obligations to suppliers during this restructuring, and greatly
appreciate their loyal support during this process. This plan, if
successfully implemented, will result in a revitalized company with
a vastly improved and deleveraged balance sheet.”
Background on Chapter 11
Chapter 11 of the U.S. Bankruptcy Code allows a company to
continue to operate its business and manage its assets in the
ordinary course of business. Congress enacted Chapter 11 to avoid
the negative effects of liquidation proceedings and to enable a
debtor business to preserve its going concern value and its
operations, as well as to provide its employees with jobs and to
satisfy creditor claims based upon the value of the reorganized
company.
About Trailer Bridge, Inc.
Trailer Bridge provides integrated trucking and marine freight
service to and from all points in the lower 48 states and Puerto
Rico and Dominican Republic, bringing efficiency, service, security
and environmental and safety benefits to domestic cargo in that
traffic lane. This total transportation system utilizes its own
trucks, drivers, trailers, containers and U.S. flag vessels to link
the mainland with Puerto Rico via marine facilities in
Jacksonville, San Juan and Puerto Plata.
Additional information on Trailer Bridge is available at the
www.trailerbridge.com website.
Forward-Looking Statements
This press release contains statements that constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. The matters discussed in
this press release include statements regarding the intent, belief
or current expectations of the Company, its directors or its
officers with respect to the future operating performance of the
Company and its asset utilization. Investors are cautioned that any
such forward looking statements are not guarantees of future
performance and involve risks and uncertainties, and that actual
results may differ materially from those in the forward looking
statements as a result of various factors. Without limitation,
these risks and uncertainties include: (i) the potential adverse
impact of the bankruptcy case on our business, financial condition
or results of operations, including our ability to maintain
contracts and other customer and vendor relationships that are
critical to our business and the actions and decisions of our
creditors and other third parties with interests in our bankruptcy
case; (ii) our ability to maintain adequate liquidity to fund our
operations during the bankruptcy case and to fund a plan of
reorganization and thereafter, including maintaining normal terms
with our vendors and service providers during the bankruptcy case
and complying with the covenants and other terms of our financing
agreements; (iii) our ability to obtain court approval with respect
to motions in the bankruptcy case prosecuted from time to time and
to develop, prosecute, confirm and consummate a plan of
reorganization with respect to the bankruptcy case and to
consummate all of the transactions contemplated by such plan of
reorganization; (iv) risks associated with third parties seeking
and obtaining court approval to terminate or shorten the
exclusivity period for the Company to propose and confirm a plan of
reorganization, for the appointment of a Chapter 11 trustee or to
convert the Chapter 11 bankruptcy case to a Chapter 7 case; and (v)
those factors identified in our filings with the Securities and
Exchange Commission as may be accessed at www.sec.gov.
The risks and uncertainties and the terms of any reorganization
plan ultimately confirmed can affect the value of our various
pre-petition liabilities, common stock and/or other securities. No
assurance can be given as to what values, if any, will be ascribed
in the bankruptcy proceedings to each of these constituencies. A
plan of reorganization could result in holders of our liabilities
and/or securities receiving no value for their interests. Because
of such possibilities, the value of these liabilities and/or
securities is highly speculative and will pose substantial risks.
Trading prices for the Company’s common stock may bear little or no
relationship to the actual recovery, if any, by holders thereof in
the bankruptcy case. Accordingly, the Company urges extreme caution
with respect to existing and future investments in its common
stock. Caution should be taken not to place undue reliance on our
forward-looking statements, which represent our view only as of the
date of this press release, and which we assume no obligation to
update.
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