Update on Austal's and the Government's MMF

From: http://blog.al.com/live/2009/08/austal_completes_first_stage_o.html

"Shipbuilder Austal completes first stage of $170 million module manufacturing facility in Mobile"
Posted by Kaija Wilkinson, Business Reporter August 30, 2009

Joe Rella, president and chief operating officer of Austal USA in Mobile, carries a Frisbee-size disk of aluminum as he walks through the first phase of the shipyard's $170 million module manufacturing facility. Engraved on the disk in plain block letters: John Rothwell, First Plate Cut, MMF...

Starting in October, Austal plans to begin hiring like crazy, Rella said, growing employment from its current 950 or so to about 1,300 people. More military work could move the total jobs near 3,000 within five years, the company has said...

The first quarter of next year, Rella said, the facility will be humming "full bore" on components of the JHSV...

COMING NEXT WEEK
• Taking the pulse of the local shipbuilding industry: Austal was one of five local shipyards to recently receive stimulus grant money. Austal will use its $1.8 million grant to buy an overhead crane for the ship shed where its second littoral combat ship is taking shape...

Drivel about the 102M design...and Superconducting engines

This is in response to a GizMag post elsewhere on the new 102M design. An answer to the problem posed there on the design still being fuel inefficient is superconducting engines:

http://www.amsc.com/products/motorsgenerators/documents/HTSMotorsforHighSpeedShipsASNE.pdf

http://www.spectrum.ieee.org/energy/renewables/winner-superconductors-on-the-high-seas

http://ammtiac.alionscience.com/pdf/WQV9N1_ART04.pdf

Is this the world’s best ship design? The Austal 102 trimaran
August 6, 2009

Shipbuilder Austal first came to Gizmag’s attention in 2005 with the launch of the world’s largest aluminum vessel, the 127 meter Benchijigua Express. The company then started building Littoral Combat Ships (LCS) for the US Navy, based on the same trimaran design. And, now, Austal is launching an even more refined version that improves sea-keeping, passenger comfort and fuel efficiency. This week, Tony Armstrong, Austal’s head of R&D, spoke exclusively to Gizmag about potentially building 20% of the US Navy fleet...Read More

Aha! Validation. That's What I'm Talkin' About!

Gotta love those webbots...

Video of Interview at: http://www.finnewsnetwork.com/archives/finance_news_network12266.html

28 August 2009 - CEO Bob Browning talks about its full year results to June 30 and work with the US Navy.

Bob Browning: Sure, yeah the Hawaii Super Ferry contract really was quite unusual. We were actually helping that company get started and put $30 million of mezzanine debt into the business which then allowed us to contract to build two large catamaran ferries for them. And strategically was important because it allowed us to build our workforce up in Mobile, Alabama which then allowed us to win the Joint High Speed Vessel program which is a very close derivative to that hull form. So while it was unfortunate that Hawaii Super Ferry filed for Chapter 11, it was an unusual thing that we normally wouldn’t do, but it did position us for a much more lucrative contract with the Navy...

Bob Browning: It really was a conscious decision...


Full Interview Below:

TRANSCRIPTION OF FINANCE NEWS NETWORK INTERVIEW WITH AUSTAL LTD (ASX:ASB) CEO, BOB BROWNING

Clive Tompkins: Hello Clive Tompkins reporting for the Finance News Network. Joining me for the first time from ship-builder Austal Ltd (ASX:ASB), is CEO Bob Browning. Bob welcome to FNN. You’ve just released your full year results to June 30 with net profit down 82 per cent to $9.2 million on revenue of $500 million, can you explain the result?

Bob Browning: Sure, and it’s important to realise that the impact in our income statement was really some accounting treatments, non-cash write-downs. Our underlying business would have produced about $38.5 million this year which was ahead of analyst expectations but we had the Hawaii Super Ferry write-down and a derivative instrument that we put in place on a multi-ship program that has locked in a big upside for that program going forward from a commercial basis.

Clive Tompkins: Given the substantial hit you took to your bottom-line on the Hawaii Super Ferry contract, are you going to change the way you get paid for similar deals?

Bob Browning: Sure, yeah the Hawaii Super Ferry contract really was quite unusual. We were actually helping that company get started and put $30 million of mezzanine debt into the business which then allowed us to contract to build two large catamaran ferries for them. And strategically was important because it allowed us to build our workforce up in Mobile, Alabama which then allowed us to win the Joint High Speed Vessel program which is a very close derivative to that hull form. So while it was unfortunate that Hawaii Super Ferry filed for Chapter 11, it was an unusual thing that we normally wouldn’t do, but it did position us for a much more lucrative contract with the Navy.

Clive Tompkins: Austal has built a global dominance producing and selling car and passenger fast ferries, but has also been producing a fair number of military vessels, where do you get the bulk of your work from these days?

Bob Browning: Right now it comes primarily from the commercial side of the industry in large catamaran ferries down to passenger ferries. If we fast forward upwards of two years I would expects about two thirds of our income from multi-ship U.S. Navy awards going forward.

Clive Tompkins: And is this a conscious decision, or have you just followed the work flow?

Bob Browning: It really was a conscious decision. We were actually prevented form operating or selling in the United States through some protectionist legislation called the Jones Act, and so the establishment of our facility in Mobile Alabama was designed to allow us to produce ships for that market. We then saw an opportunity with a vessel we produced for a customer in the Canary Islands that we thought an adaptation of that would fit the Navy’s Littoral Combat Ship program and were successful in winning that contract...>>Rest of interview here>>

New word in the lexicon..."Superferried"

From the Honolulu Advertiser yesterday regarding the rail project:

...U.S. Rep. Neil Abercrombie, (D-Hawaii), said today that he is worried about the apparent lack of transparency in the running of the rail project.

Abercrombie said he fears that opponents will have an opportunity to kill the rail project because of the way it is being managed.

"I'm concerned the project is going to be Superferried," Abercrombie said in reference to the demise of the Hawaii Superferry, a high-speed, inter-island shuttle service. The Superferry left the state after a court ruled it had not completed required environmental studies...

We ain't done yet...

Still got the webbots goin'...

From: http://www.marinelog.com/DOCS/NEWSMMIX/2009aug00204.html

August 20, 2009

"Austal full year result hit by Superferry bankruptcy"

Austal Limited has announced a "disappointing" full year result--impacted among other things by the Hawaii Superferry bankruptcy.

In an Australian Stock Exchange announcement, the shipbuilder announced a full year profit after tax of Australian $9.2 million for the financial year ended June 30, 2009. Austal said its 2009 full year result "was adversely affected by two particular events. Firstly as announced earlier this year, an American customer went into bankruptcy, requiring Austal to write-off its receivable owing by this customer. Secondly, in accordance with International Financial Reporting Standards, the time value cost of a hedging instrument that was put in place to lock in a favorable movement in foreign exchange was recognized in the current financial year. This was associated with a multi-ship contract Austal was awarded and the benefit will be realized in future years."

Austal Managing Director Bob Browning commented: "Although this result is disappointing, if it were not for these two events, Austal's earnings this year would have exceeded $38 million. This, in combination with the robust growth in our order book, is a clear indication that Austal is well positioned to deliver stronger shareholder value in the future."...

LCS Bids Submitted to U.S. Navy...LCS-1 vs. LCS-2

From: http://www.defensenews.com/story.php?i=4218071&c=AME&s=SEA

"LCS Bids Submitted to U.S. Navy"
By Christopher P. Cavas
3 Aug 2009

Bids to build the next Littoral Combat Ships (LCS) have been submitted by both industry teams to the U.S. Navy.

Lockheed Martin announced its proposal was sent to the Navy on July 31, and rival General Dynamics confirmed its plans were sent in by the Aug. 3 deadline.

At stake are contracts to build three ships requested in the 2010 defense budget. The Navy has said the competition winner will receive two construction contracts, while the other team will get one ship.

House appropriators, however, passed their version of the defense bill with four LCS ships, while both House and Senate authorizers have agreed to the three ships in the president's budget. Senate appropriators have yet to pass their version of the defense bill.

Neither industry team would discuss specifics of their proposals. Congress has laid on a cost cap for each of the 2010 LCS ships at $460 million, although both Navy and industry sources call that goal a "challenge," at least until shipbuilders get more ships to build and can realize economies of scale.

Lockheed and its primary shipbuilder, Marinette Marine, delivered their first ship to the Navy last fall. General Dynamics and its shipyard, Austal USA, have run preliminary trials on their first ship and are working to deliver it in a few weeks.

Each shipbuilder received contracts this spring to begin work on a second ship.

No contract awards are expected until after the 2010 defense bills are enacted into law.

Regarding the LCS-2 builder's trials almost one year after LCS-1 builder's trials:

From MarineLog...July 29, 2009
"Navy releases video of LCS 2 sea trials"

Reports filtering out on the builder's trials of LCS 2 Independence, indicate that the Austal-built Littoral Combat Ship attained 43 knots with all diesels, gas turbines and waterjets on line, but at less than full power. Teething troubles encountered have included a leak in the port gas turbine shaft seal.

Meantime, the Navy recently released video of the trials, shot on June 12

Video comparing LCS-2 to LCS-1:

For Sale on Craig's List!?!...

From: http://honolulu.craigslist.org/oah/clt/1299148411.html

Hawaii Superferry Replica Model Alakai - $1500 (Honolulu, Oahu)

---

Date: 2009-07-31, 10:07AM HST
Reply to: sale-jvnq3-1299148411@craigslist.org

---

Alakai, Hawaiian for "Ocean Path" is the name of the vessel which serviced the Hawaiian waters for a brief time (2007-2009). To commemorate its arrival for Service in August '07, roughly 80 models were created of the ship in intimate detail. (One of the few, if any, that would ever make public circulation) These models which were displayed are various trade shows and exhibitions helped bring to the public a glimpse of the grand vessel that was about to arrive in the islands. Details fleshed out in fully colored replicas of the vessel, including hand railings, emergency rafts, and cars on the second (mezzanine) vehicle deck. This is an EXTREMELY rare collectible that would normally be given out at an executive level.

The replica ship would make a great addition to any lounge or living space. It definitely will make a statement for the office. You will have a dramatic reminder of the vessel that tried to service the Hawaiian islands and caused a controversy that made local news daily. This vessel daily crossed Waikiki towards Daimondhead. You could talk about your personal experience taking the ferry, or liven up the room with a replica catamaran (double hull) vessel. The Alakai was the largest aluminum vessel created and sailed in American waters. It was a vessel 300 feet in length, 80 feet wide, and over 5 stories tall. It could carry over 700 passengers and 200 vehicle interisland.

The model is fixed by shinny, metallic posts to a glossy wood base. It is covered by a Plexiglas case that fits into a fabricated, square notch in the wood base. The overall model is about 18 inches long and 8 inches tall. I do not know the scale ratio to the actual ship.

***WARNING***
The vessel that is up for sale does have some minor damages from being frequently displayed; these damages can easily be fixed by a hobby expert. I know of a shop that would be able to do the repairs, but have not gotten a quote on the fix. The Plexiglas case also has mild scratches.

Pictures are available on request for SERIOUS buyers. There is a second model in my possession that is still in the box NEW, but that would be at a higher price. I would like to meet in person to conduct the transaction, and cash only.

Serious inquiries only.

• Location: Honolulu, Oahu

PostingID: 1299148411

TO ALL KNOWN CREDITORS...

On their Website:

http://www.hawaiisuperferry.com/

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

In re: HSF HOLDING, INC., et al.,1 Debtors.

Chapter 11 Case No. 09-11901 (PJW) Jointly Administered

NOTICE OF BAR DATES FOR FILING OF PROOFS OF CLAIM

TO ALL KNOWN CREDITORS OF THE FOLLOWING DEBTOR ENTITIES:

Debtor	Address	Case Number
HSF Holding, Inc.	Pier 19 Ferry Terminal, Honolulu, HI 96817	09-11901
Hawaii Superferry, Inc.	Pier 19 Ferry Terminal, Honolulu, HI 96817	09-11902

On July 20, 2009, the United States Bankruptcy Court for the District of Delaware

(the "Court") entered an order in the above-captioned chapter 11 cases (the "Bar

Date Order") establishing certain claims bar dates in the chapter 11 cases of the

above-captioned debtors and debtors in possession (collectively, the "Debtors").

By the Bar Date Order, the Court fixed August 24, 2009 at 5:00 p.m., Prevailing

Eastern Time, as the general claims bar date (the "General Bar Date") in these

cases...>>Click here to read the rest>>

Hindsight

A little look back...

Something I noticed over the past year with the sitemonitor on this is that the following two posts have consistently gotten some of the most hits of any individual posts during the life of this blog:

Sunday, December 23, 2007 HI Superferry: The Goal...JHSV
Friday, January 4, 2008 More on the Goal...JHSV

Even more interesting is that the above two posts have attracted a lot of foreign attention over the past year and a half, esp. from locations in all of the countries of the world with significant navies.

Somebody else wrote about this too as early as these posts:

Thursday, January 3, 2008 Musings: Lifting the Veil (Mentioning X-Hull and Seafighter)
Friday, January 4, 2008 Musings: KKCR Snaps and Lifting the Veil: Part II (Seafighter and LCS)
Saturday, January 5, 2008 Musings: KKCR Outed and Lifting the Veil: Part III (Seafighter and LCS)
Sunday, January 6, 2008 Musings: Lifting the Veil: Part IV (Seafighter and X-Craft)
Wednesday, January 9, 2008 Musings: Lifting the Veil: Part V (LCS)
Tuesday, January 15, 2008 Musings: Lifting the Veil: Part VI (Seafighter, LCS, and JHSV)
Wednesday, January 16, 2008 Musings: Lifting the Veil: Part VII (All Pau) (JHSV and Seafighter LCS)
Wednesday, January 16, 2008 U.S.S. Superferry? (Article Summary)

The Seafighter ended up being a non-issue. That source from San Diego seemed to have been astray for one reason or another.

There have been other bloggers and bookwriters who have tried to assign credit for who wrote about this first. And who wrote about it most accurately. I think the record speaks for itself.

Oh, and by the way, no writer anywhere yet has shown how JFL benefits from Austal getting the JHSV or LCS contracts. There may be a way in which JFL benefits, but it has not been shown publicly by any writer. None, zero, zip, nada.

Now there's a real mystery for you...maybe the biggest mystery of all in this story, and none of the professionally trained journalists have figured it out.

Navy and Army Name First Three Joint High Speed Vessels

U.S. Department of Defense Office of the Assistant Secretary of Defense (Public Affairs) News Release

On the Web: http://www.defenselink.mil/releases/release.aspx?releaseid=12823 Public contact: http://www.defenselink.mil/faq/comment.html

IMMEDIATE RELEASE No. 522-09 July 16, 2009

Navy and Army Name First Three Joint High Speed Vessels Secretary of the Navy Ray Mabus and Secretary of the Army Pete Geren today announced the names of the first three Joint High Speed Vessels as Fortitude (JHSV 1), Vigilant (JHSV 2) and Spearhead (JHSV 3). A cooperative effort between the Navy and the Army, JHSVs will be used for fast intra-theater transportation of troops, vehicles and equipment. The program highlights a Department of Defense acquisition objective of leveraging the expertise of one military branch to assist another. The Army is procuring Fortitude and Spearhead, while the Navy is procuring Vigilant, and each service will be responsible for operating and maintaining its ships following delivery. JHSVs will be capable of transporting 700 short tons 1,200 nautical miles at an average speed of 35 knots, and can operate in shallow-draft ports and waterways, interfacing with roll-on/roll-off discharge facilities, and on/off-loading a combat-loaded Abrams Main Battle Tank (M1A2). Other joint requirements include an aviation flight deck to support day and night air vehicle launch and recovery operations. JHSVs will have airline style seating for 312 embarked forces and fixed berthing for 104 more. Joint military combatant commanders will have the flexibility to use JHSVs in a variety of roles to include supporting overseas contingency operations, special operations forces, humanitarian assistance and disaster relief, and emerging joint sea basing concepts. Constructed by Austal USA in Mobile, Ala., the detail, design and construction contract covers 10 ships, five for the Army and five for the Navy. Long lead time material options for the first three ships have already been exercised. Construction on the first JHSV will begin following a successful Production Readiness Review (PRR), currently scheduled for fall 2009. The JHSV PRR will be a review of design maturity, availability of materials and components, and the shipbuilder's readiness to successfully start fabrication. Interested media may contact the Navy Office of Information at 703-697-5342. Additional information on JHSV is available online at http://peoships.crane.navy.mil/JHSV/default.htm .

Former Hawaii Superferry vessels headed to Virginia

From: http://blog.al.com/press-register-business/2009/07/hawaii_superferry_vessels_head.html#preview

"Mobile-built Hawaii Superferry vessels headed to Norfolk"
Posted by Kaija Wilkinson, Press-Register July 15, 2009

A pair of fast ferries built locally for Hawaii Superferry Inc. are being moved from Mobile to a Norfolk, Va., shipyard by the bankrupt company's main creditor, the U.S. Maritime Administration, MARAD said today.

Alakai, the first vessel to be built and delivered to Hawaii Superferry by Mobile's Austal USA, arrived at Lambert's Point Docks Inc. on Tuesday, while its sister ship, Huakai, is scheduled to leave late this week and arrive in Norfolk the middle of next week, according to Susan Clark, MARAD spokeswoman.

They had been moored at Mobile's Atlantic Marine shipyard, which is owned by former U.S. Navy Secretary John Lehman. Lehman was until May the primary investor in the Hawaii Superferry venture.

Hawaii Superferry filed for Chapter 11 reorganization in late May. Its ferry construction was financed in large part through a federal program designed to help shipyards diversify. Clark said MARAD has been granted "physical custody" of the vessels but does not yet hold the titles. The administration said last month that it plans to repossess and sell the vessels.

Hawaii Superferry owes MARAD $136.8 million, according to court records. Austal, which built both ferries under a $190 million contract, is owed another $22.9 million, the record shows.

Before talks among MARAD, Austal and Hawaii Superferry fell apart in June, analysts had expected the vessels to be retrofitted by Austal and chartered directly to the military.

Clark said MARAD is now weighing all its options for the ferries, which include sale or charter...>>See rest of article here>>

Tags: Ala., Austal, Hawaii Superferry, John Lehman, Lambert's Point Docks, MARAD, Mobile, Susan Clark

Ferry Curious

Second time's a charm, and in the Honolulu Weekly this time. With this second letter to the editor on the subject maybe now Sally will get answers to some of her questions:

From: http://honoluluweekly.com/letters/2009/07/ferry-curious/

"Ferry curious"

Jul 15, 2009

The Department of Transportation prepared a draft Environmental Impact Statement for the Superferry that was released in January. Has the final EIS been completed? The title was for a “statewide large capacity ferry.” This was meant to continue the fiction that Act 2 exempting the Superferry from environmental review was passed by the legislature as a general law, not a particular law to benefit the Superferry. So I presume that the state would complete the EIS, to continue the fiction. Has it been completed?

I would like to know if they dropped it when the Superferry went out of business. I would also like to know how much the state spent on the EIS, besides the $40 million on harbor improvements.

I am so glad they didn’t go ahead with state plans to build a ferry terminal for the Superferry on the Kahului Harbor breakwater. That plan would really have been expensive. Probably just the plans were expensive.

What has happened to John Lehman, former chairman of the Superferry? What happened to his investment firm? Did the Superferry bankruptcy cost him any money personally? Or were the only losers small investors, vendors, and the Superferry employees?

Sally Raisbeck, Wailuku

Guggenheim Corp. Funding Seeks Dismissal of HSF Holding Bankruptcy

From: http://www.netdocketsblog.com/2009/07/guggenheim-corp-funding-seeks-dismissal.html

Thursday, July 9, 2009

Guggenheim Corp. Funding Seeks Dismissal of HSF Holding Bankruptcy

On Wednesday, Guggenheim Corporate Funding, LLC filed a motion seeking the dismissal of the chapter 11 bankruptcy case of HSF Holding, Inc. HSF Holding, Inc. is the parent holding company of Hawaii Superferry, Inc., which operated a high-speed ferry business between the Hawaiian Islands before filing for bankruptcy and abandoning its ferries. Guggenheim does not seek dismissal of Hawaii Superferry, Inc.'s bankruptcy case.

Guggenheim holds a security interest in all of HSF Holding's assets, which consist solely of the stock of Hawaii Superferry, Inc., as a result of providing $47.75 million in senior secured funding in 2007. Guggenheim also holds $7.5 million in an escrow account, which is the subject of a joint stay relief motion of HSF and Guggenheim scheduled to be heard on July 20, 2009.

In support of its motion, Guggenheim argues that cause for dismissal exists because there is "a lack of good faith purpose" for HSF Holding's bankruptcy case. In furtherance of that argument, Guggenheim points to seven factors:

1. The only asset in HSF Holding's case is the Hawaii Superferry stock that is subject to Guggenheim's lien.
2. Guggenheim "appears to be the only creditor" of HSF Holding.
3. HSF Holding has no on-going business or employees.
4. HSF Holding's chapter 11 petition was filed "on eve of Guggenheim terminating the escrow account and retaining such funds."
5. The only parties-in-interest in HSF Holding's case are Guggenheim and HSF.
6. HSF Holding has no cash or income.
7. HSF Holding has no possibility of reorganization because it has no business to reorganize.

Download copies of every document filed in this case and the bankruptcy cases of over 600 other major corporations using netDockets. Sign up now for a free trial account and $100 of free research.

Posted by Randall Reese

Alabama...All In...Hook, line, and 'sinkher'

From: http://www.professionalmariner.com/ME2/dirmod.asp?sid=&nm=&type=news&mod=News&mid=9A02E3B96F2A415ABC72CB5F516B4C10&tier=3&nid=E49935CBCF3F4112BCF2B28D062FB2EE

"Alabama to build $9M maritime workforce training center"

Mobile shipbuilding facility to teach 700 workers annually

(6/30/2009)

(MOBILE, Ala.) -- Alabama's governor attended a ceremony formally announcing a $9.4 million maritime workforce training center in Mobile, the television station WALA reported. The taxpayer-funded Maritime Science Center will train 700 a year in shipbuilding trades. It is scheduled to open next year. Click here to view the TV station's story.

Winding down...Questions about the EIS

Not much to post here anymore. I still have the "webbots" going on this, but even they don't send back much info to me anymore. But, received an interesting letter to the editor cc'd to me recently. Here was my reply to that letter below:

Sally,

Good to hear from you again. About the EIS. As far as I know DOT put it on temporary hold after the Supreme Court decision, but that was before the bankruptcy. As far as I know DOT has not publicly said anything about the EIS since the bankruptcy proceedings began. The situation may have changed given those recent bankruptcy proceedings and as to the "need" for an interisland ferry and relative to the state budget problems.

As for your last question, "And what has happened to John Lehman, former chairman of the Superferry, and his investment firm? Did the Superferry bankruptcy cost him any money personally? Or were the only losers small investors, vendors, and the Superferry employees?":

JFL and Co is still in business. Their lawyer recently said in bankruptcy court after the abandoning of the vessels was allowed that JFL and Co lost all of their $85 million invested in HSF. All of the common stockholders and preferred stockholders are expected to lose any money they invested or expected value accrued in it. It still remains in question who buys or leases the two vessels and for how much. These vessels may be sold at loan value which would be a discount. A previous loser in this could actually end up making money if they acquire the vessels at discount and use them in the right situation. The right situation calls for either military use or one-way commercial routes of 70 miles or less between significant population/commercial centers.

Brad

-------- Original Message --------

Subject:	What is the status of the Superferry EIS?
Date:	Mon, 06 Jul 2009
From:	Sally Raisbeck
To:	Maui News (letters@mauinews.com)

What is the status of the Superferry EIS?

The DOT prepared a draft EIS for the Superferry that was released in January. Has that been completed? The title was for a "statewide large capacity ferry". This was meant to continue the fiction that Act 2 exempting the Superferry from environmental review was passed by the legislature as a general law, not a particular law to benefit the Superferry. So I presume that the state would complete the EIS, to continue the fiction. Has it been completed?

I would like to know if they dropped it when the Superferry went out of business. I would also like to know how much the state spent on the EIS, besides the $40 million on harbor improvements.

I am so glad they didn't go ahead with state plans to build a ferry terminal for the Superferry on the Kahului Harbor breakwater. That plan would really have been expensive. Probably the plans were expensive.

The company that built the Superferry got the Joint High Speed Vessel (JHSV) contract for 10 military versions of the Superferry last November. Does the Maui News know? The company was Austal Ltd. And what has happened to John Lehman, former chairman of the Superferry, and his investment firm? Did the Superferry bankruptcy cost him any money personally? Or were the only losers small investors, vendors, and the Superferry employees?

Surely someone on Maui knows some of these interesting economic facts.

Sally Raisbeck
Wailuku HI

What to do with the 'Superferry' ramps?

From a reader:

My 11 year old son has a great idea - tow the HSF barges out to sea. Get a re-circ pump (ram or solar of course) and boogie boards. Open the ramps up as an on-the-water water park. You seen the one in Kalapaki, yeah? Either that or a skate park....Could be fun.

Hope Kallai

Judge Walsh: HSF can abandon and case stays in Delaware

From: http://www.honoluluadvertiser.com/article/20090701/BREAKING01/90701023/-1/RSS01?source=rss_breaking

Wednesday, July 1, 2009
"Bulk of Superferry bankruptcy case will remain on Mainland, judge rules"
Bloomberg News

WILMINGTON, Del. — A bankruptcy judge today ruled that Hawaii Superferry can abandon its two catamarans to lenders owed $158.8 million for their construction and that the bulk of the bankruptcy case will remain in Delaware.

..."We're not going to be returning back to the state of Hawaii now that the estate has abandoned the ships," company attorney Leon Barson told Walsh today during a hearing in Wilmington, Del., where Hawaii Superferry filed for bankruptcy on May 30.

Walsh also ruled that the main part of the bankruptcy case would stay in Delaware. Only claims filed by the state of Hawaii related to its contract with Superferry will be transferred to the federal bankruptcy court in Hawaii, Walsh said.

...The company was operating one ferry since August 2007. The second was delivered in April.

...Guggenheim is owed $51.7 million on notes where the company says there is a $7.5 million fund for paying interest.

Pennies on the Dollar...Tone...No More Ohana

Derrick DePledge has a good blog entry today on this:

Pennies on the dollar
June 29th, 2009 by Derrick DePledge

Hawaii Superferry filed an objection today in U.S. Bankruptcy Court in Delaware to the state of Hawai’i’s request that the case be transferred to the Islands.

Attorneys for Superferry argue that the major secured creditors -- the federal Maritime Administration and Guggenheim Corporate Funding -- prefer that the case remain in Delaware.

The filing is interesting for its tone...

[Click on Pennies to see rest of Derrick's post]

Derrick quotes from the filing today to give a sense of the tone.

Latest from the Coconut Wireless on this

Forwarded:

Navy Seeks Ferry Vessel for Pacific Operations

The U.S. Navy’s Military Sealift Command (MSC) has issued a Market Survey to ask about the cost and availability of U.S. ferry vessels. Anticipated delivery will occur on October 1, although the vessel owner may propose alternate delivery dates. The location of proposed usage will be Guam, Saipan, and adjacent Pacific Ocean waters. The time charter will be for 12 months, with the possibility for three additional year-long renewals.

The closing date for responding to the Market Survey is July 14, 2009.

For more information, contact Ms. Jessica Chu of MSC at 202-685-xxxx (phone) or Jessxxx.xxx@navy.mil.

PVA has a copy of the Navy’s full document with the Market Survey. For a copy, contact Ed Welch at PVA Headquarters at 1-800-807-xxxx ext. xx or ewxxxx@passengervessel.com

State Startin' to Look Like the Odd One Out on This

From: http://www.netdocketsblog.com/2009/06/hawaii-superferry-challenges-transfer.html

Monday, June 29, 2009

Hawaii Superferry Challenges Transfer Motion

On Monday, Hawaii Superferry, Inc. and HSF Holding, Inc. filed an objection, accompanied by a memorandum of law, to the motion of the State of Hawaii seeking the transfer of their bankruptcy cases from the bankruptcy court in Delaware to the bankruptcy court in Hawaii. Hawaii Superferry filed for bankruptcy protection in Delaware on May 30, 2009 and the State of Hawaii sought the transfer on June 19th. Details of the State of Hawaii's transfer motion can be found in an earlier posting, which is available here.

In support of its objection, Hawaii Superferry makes several arguments. First, the company asserts that venue is proper in Delaware because HSF Holding, Inc. was formed as a corporation under Delaware law. Second, the company states that its two largest secured creditors - the United States Maritime Administration and Guggenheim Corporate Funding, LLC - support the cases remaining in the Delaware bankruptcy court. In fact, the United States Maritime Administration quickly filed a joinder in support of Hawaii Superferry's objection. The objection also notes that MARAD holds a secured claim in excess of $136 million and Guggenheim holds a secured claim of $50 million, while the State of Hawaii asserts a disputed third-lien claim of only $1.3 million. The objection suggests that such third-lien claims are likely to be out of the money.

Finally, Hawaii Superferry challenges the assertions made by the State of Hawaii that there is a strong connection between the companies and the State of Hawaii. While that may once have been the case, according to Hawaii Superferry, the companies have ceased all operations in Hawaii and no longer maintain any significant connection to Hawaii. According to the companies, they ceased all operations in Hawaii in March following an adverse court ruling that prohibited their continuing operation, they have laid off all employees in Hawaii and none of their assets remain in Hawaii (most notably, their most significant assets - the high-speed ferries - are now docked in Alabama). Hawaii Superferry also challenges the assertion that most of its creditors are located in Hawaii, noting that less than half of its 30 largest unsecured creditors (and two of the three members of the Official Committee of Unsecured Creditors) are located outside of Hawaii. Finally, the company notes that both its retained professionals and the Creditors' Committee's retained professionals are located in Philadelphia, New York, Washington, D.C., and Wilmington.

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Posted by Randall Reese