UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
Date of Report (Date of earliest event reported):
December 29, 2004 (December 17, 2004)
___________________
TORCH OFFSHORE, INC.
(Exact Name of Registrant as Specified in its Charter)
000-32855
(Commission File Number)
Delaware 74-2982117
(State or Other Jurisdiction (IRS Employer
of Incorporation) Identification No.)
401 Whitney Avenue, Suite 400
Gretna, Louisiana 70056-2596
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code:
(504) 367-7030
___________________
Check the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligation of
the Registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under
the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under
the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule
13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)
Item 2.04 Triggering Events That Accelerate or Increase a
Direct Financial Obligation or an Obligation
under an Off-Balance Sheet Arrangement.
On December 22, 2004, Torch Offshore, Inc. (the "Company")
received notice from General Electric Capital Corporation
("GE Capital") that it, Torch Offshore, L.L.C. and Torch
Express, L.L.C., were in default under the Loan Agreement
dated December 17, 2003, as amended (the "Loan Agreement"),
for failure to make the quarterly payment due December 17,
2004. Under the terms of the Loan Agreement, the Company is
required to make quarterly payments of principal and
interest over seven years. Prior to the default, the
interest rate under the Loan Agreement was a variable rate
of 4.25% plus the London Interbank Offering Rate ("LIBOR").
In the notice, GE Capital advised the Company that as a
result of the default, effective as of December 17, 2004,
the interest rate under the Loan Agreement will be equal to
the greater of 18.0% per annum or 2.0% over the interest
rate applicable under the promissory note issued under the
Loan Agreement. Further, GE Capital reserved its rights to
pursue all remedies available to it under the Loan
Agreement, which include the ability to accelerate the due
date of all amounts outstanding under the Loan Agreement.
As of December 29, 2004, an aggregate principal amount of
$14.5 million is outstanding under the Loan Agreement, which
is secured by three of the Company's vessels, the Midnight
Wrangler, Midnight Gator and the Midnight Eagle. On December
29, 2004, GE Capital arrested the Midnight Wrangler. GE
Capital prompted the arrest by filing a lawsuit in the
United States District Court for the Eastern District of
Texas, Beaumont Division. The Company is currently
discussing a waiver or forbearance with GE Capital, however,
there can be no assurance that the Company will be able to
negotiate a waiver or forbearance or that such a waiver or
forbearance will be on terms acceptable to the Company. If
the Company is unable to negotiate a waiver or forbearance
with GE Capital, it could have a material adverse effect on
the Company's ability to continue its operations.
In addition, the default under the Loan Agreement has
triggered a default under another loan agreement between the
Company and GE Capital entered into in March 2003 (the
"Second Loan Agreement"), which is also secured by the
Midnight Eagle, and may trigger defaults under other loan
agreements of the Company. As of December 29, 2004, an
aggregate principal amount of $7.4 million is outstanding
under the Second Loan Agreement. The default under the
Second Loan Agreement could result in an acceleration of the
due date of all amounts outstanding under the Second Loan
Agreement. As a result of the foregoing matters, the Company
may not have sufficient funds to finance its operations in
the near future and thereafter.
Item 8.01 Other Events.
On December 17, 2004, Adams Vessels (Bilbao) Limited
("AVBL") filed a complaint against Torch Offshore, L.L.C. in
the United States District Court, Southern District of New
York, for breach of the parties' Termination and Settlement
Agreement (the "Termination and Settlement Agreement") dated
June 4, 2004. The Termination and Settlement Agreement
established a payment plan for payment of AVBL's claim
associated with the usage of the Midnight Arrow against
Torch Offshore, L.L.C. The complaint claims that the failure
to meet these payment obligations resulted in the remaining
outstanding balance becoming due and payable immediately.
The complaint states that AVBL was damaged in the amount of
$1.3 million. AVBL has also claimed interest and attorneys'
fees and expenses.
On December 21, 2004, Cable Shipping, Inc. filed a complaint
against Torch Offshore, L.L.C. and Torch Offshore, Inc. in
the United States District Court, Eastern District of
Louisiana, seeking to enforce the $4.1 million settlement
agreement which was to be paid to them on November 19, 2004
(the "Final Consent Award"). The Final Consent Award was
granted in the United Kingdom so Cable Shipping, Inc. is
attempting to have the judgment recognized as binding and
enforceable in the United States, in addition to interest,
attorney's fees and other costs.
Also, on December 21 and 23, 2004, three of the Company's
vessels (the Midnight Express, Midnight Wrangler and the
Midnight Eagle) were arrested by United States Marshals at
the request of C-Mar America, Inc ("C-Mar"). C-Mar prompted
the arrests by filing lawsuits in the United States District
Courts for the Eastern District of Texas and the Eastern
District of Louisiana. The Midnight Express and Midnight
Eagle are under arrest in Louisiana and the Midnight
Wrangler is located in Texas. The basis for C-Mar's suit is
the failure of the Company to satisfy certain debt
obligations owed to C-Mar. The Company is currently in
negotiations with C-Mar, however, there can be no guarantee
that acceptable terms will be reached between the parties
and that the seizure of the vessels will be lifted in the
near term. Further, another vendor has joined in the
Louisiana lawsuit claiming that the Company has failed to
satisfy its debts. Failure to have the vessels released
could have a material adverse effect on the Company's
ability to continue its operations and may result in further
defaults being declared under the loan agreements for which
those vessels serve as collateral. In light of the Company's
existing operating and financial challenges, the Company is
exploring its strategic options, which may include seeking
protection under the Federal Bankruptcy Code, in conjunction
with its ongoing discussions with lenders and other parties
to restructure its debt and other obligations. As part of
these efforts and as previously announced, the Company has
engaged the services of restructuring advisors. The failure
of the Company to obtain additional financing or resolve any
existing or future defaults with respect to its loan
agreements and other debt or the commencement of bankruptcy
proceedings would have a material adverse effect on the
Company's business and on the value of the Company's equity
securities.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly
authorized.
TORCH OFFSHORE, INC.
By: /s/ ROBERT E. FULTON
Date: December 29, 2004 -------------------------
Robert E. Fulton
Chief Financial Officer