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Bouchard Transportation’s Tugs and Barges Auctioned Off

Bouchard asset auction bankruptcy
(file photo)

Published Jul 21, 2021 2:33 PM by The Maritime Executive

The auction of the assets of Bouchard Transportation Company proceeded on July 18 under the process approved by the bankruptcy court. Before the auction, the reorganization officer for the oil barge transport company had selected an initial bid of $110 million for assets, which included 12 barges and 17 tugboats. Reports indicate, however, that the initial bidder selected by the company was outbid during the auction.

Bouchard informed the bankruptcy court in a filing on July 18 that it had an agreement with Hartree Partners for the purchase of its assets. The bid was $110 million in cash, subject to normal closing conditions. Hartree is an investment firm concentrating on the energy sector and associated industries. Formed in 1997, the firm invests in the production, refinement, transportation, and consumption of tradable commodities including electric power, natural gas, refined products, oil, freight, metals, carbon, and petrochemicals.

The initial bid, known in the bankruptcy trade as a “stalking horse bidder,” because it established a minimum price for the company’s assets, however, was outbid during the auction. Bloomberg Law is reporting that a California-based investment firm, JMB Capital Partners, bid $115 million at the Bouchard asset auction on Monday. JMB Capital specializes in distressed assets and bankruptcies, and also has provided debtor-in-possession financing in bankruptcy cases.

Bouchard, which was founded in 1918, filed for bankruptcy protection in September 2020, saying it planned to continue normal operations with debtor-in-possession financing while it moved forward with an operational restructuring. However, during the bankruptcy proceedings, Judge David R. Jones, who is hearing the company's case in U.S. Bankruptcy Court in Houston, replaced family member Morton S. Bouchard III who has served as the company's chief executive and director. Matthew Ray, a managing partner at Chicago-based Portage Point Partners, was brought in to lead the company as its reorganization officer.

In June 2021, the bankruptcy court approved the auction for the assets after the company had said it was seeking a buyer. Bouchard warned that it might start layoffs for its Long Island, New York-based employees as early as mid-July if a buyer was not found for the operations. 

Bouchard’s troubles began in 2017 when an explosion on one of its barges killed two crew members. The NTSB concluded that the accident stemmed from a lack of effective maintenance and safety management, and the company was later embroiled in a fight with another employee, the brother of one of the crew members killed in the explosion. OSHA found that the company wrongfully dismissed the employee and ordered financial restitution. In addition, in 2020 the company also faced allegations of non-payment of wages to its crews. It later reported arranging financing and said that it would repay all back wages.