Nichols bros. sale pending
July 3, 2008 · Updated 11:34 AM
The sale of Nichols Brothers Boat Builders could put some of its laid-off workers back on the job if it goes through.
The Freeland boat yard stopped operating on Nov. 2, leaving roughly 150 employees jobless. Friday, the company filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court in Seattle.
The company has a tentative buyer lined up in Alaska, but the sale needs the approval of the bankruptcy judge, Nichols Seattle attorney, Marc Barreca, told the News-Times Monday.
Barecca described the Usibelli coal mining family of Healy, Alaska, as the first bidder entity, for Nichols Brothers. He said they are presently investors in the company. A call to Joe Uisbelli, Jr., president of Usibelli Coal Mine, Inc., was not immediately returned.
A hearing is scheduled for today, Nov. 21, in Seattle to determine if Nichols Brothers can get court approval to borrow money from another company owned by the Usibelli family. That could provide the capital to sustain what Barecca described as the current smaller operations.
In its bankruptcy filing Friday, Nichols Brothers President Bryan Nichols stated that the company currently employs 20 hourly and salaried workers and it is anticipated that after Dec. 1 that number will be reduced to 10.
The court filing blamed the companys situation on a liquidity crisis, stemming from its inability to borrow funds in the face of pending litigation from Hornbeck Offshore Services, Inc.
The Louisiana-based Hornbeck has a $20 million claim against Nichols Brothers stemming from a boat contract dispute. Because of that lawsuit, Nichols has not been able to borrow money to stay in business.
Court documents list a number of other entities owed large amounts of money by Nichols Brothers. For example, Minette Bay Ship Docking of Kitimat, B.C., has a claim of $3.3 million; WTA of San Francisco, $1.5 million; and N.C. Machinery Co., Tukwila, $1.2 million. Further down the list of the top 20 creditors with unsecured claims is the Washington Department of Revenue, with $159,000 in back taxes. The California State Board of Equalization claims Nichols Brothers owes them $670,000.
The bankruptcy filing states that Nichols Brothers has very little in the way of liquid assets ... minimal cash, and no ability to generate revenue on an ongoing basis.
Nichols Brothers asked for the emergency hearing this week so it can meet its payroll at the end of the week.
If the hearing is conducted and the anticipated loan is approved, that wont put the boat building crew back to work, but it will keep the company operating, Barreca said.
On a separate track, Nichols Brothers is working with companies who had orders under construction in the boat yard. All work stopped Nov. 2. We hope to work out arrangements with customers that will allow some funding of a couple of jobs under way so employees can be hired back, Barreca said. He couldnt say when that might happen.
A separate hearing on the proposed sale of the boat yard is needed before the sale can proceed. Barreca anticipated that might take several weeks. We havent filed that motion yet, he said.