Bankruptcy judge gives approval to loan for Bender

Attorneys for Bender Shipbuilding & Repair Co. reached an agreement Tuesday with creditors that will allow the bankrupt Mobile company to borrow up to $6 million while it tries to sell assets.

U.S. Bankruptcy Judge Margaret A. Mahoney signed off on the loan after lawyers presented a final proposal.

"All of the objections have been satisfied," Bender attorney Stewart Peck told the judge.

Tom Bender Jr., the company's president, said in an interview that the loan was essential to keeping the firm in business and its 200 workers on the job.

"This gets us way into next year," he said. "I feel certain our employees will have jobs."

Added Peck: "We're doing repair work. We're open for business. ... This is very positive."

The deal replaces a $1.5 million loan from Petrus Financing with a $6 million line of credit from General Electric Capital Corp. and Marquette Business Credit Inc., Bender's largest secured creditors.

Several others, including a committee of unsecured creditors, had filed a limited objection to the preliminary plan. The creditor committee expressed concerns about Tom Bender's statement in court filings that he would retain management of the company after an asset sale and the "chilling effect" it would have on other buyers "likely to bring the greatest value to the sale process."

Tuesday's agreement eliminated those objections to the financing plan. Peck told Mahoney that Bender would proceed with its asset sale.

"We're hot and heavy into due diligence," he said. "We are deeply in the sales process at this time."

The detailed financing agreement filed earlier in court anticipated Bender signing a contract to sell its main Mobile yard to SunTx Capital by Nov. 15 and closing that deal by Dec. 15. It also anticipated Bender signing a deal to sell its metal plate shop on Royal Street by Nov. 25 and closing the sale by Jan. 14. Finally, it anticipates that Bender would sign a contract to sell its Mexican shipyard by Dec. 15 and complete the sale by Jan. 28. Tuesday's order approved the agreement "substantially" in the form it was proposed.

The sales will be conducted under a bankruptcy process in which assets can be conveyed to the purchaser free and clear of any liens or encumbrances. Those liens are attached to the net sale proceeds and paid as ordered by the court.

Tom Bender said after the hearing that he does not know where that process will wind up.

The company filed for Chapter 11 reorganization in early July, avoiding an effort by three unsecured creditors — GulfMark Offshore Inc. of Houston; Reserve, La.-based Louisiana Machinery Company LLC; and technical staffing company Sirius Technical Services Inc. of Theodore — to have all Bender assets liquidated to pay debt. Court records show Bender had $100.7 million in debts versus assets of $98.3 million when the bankruptcy was filed.