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):
January 10, 2005 (January 4, 2005)
___________________
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 1.03 Bankruptcy or Receivership.
On January 7, 2005, Torch Offshore, Inc. (the "Company") and
its wholly owned subsidiaries, Torch Offshore, L.L.C. and
Torch Express, L.L.C., filed voluntary petitions for
reorganization under Chapter 11 of the U.S. Bankruptcy Code
with the United States Bankruptcy Court for the Eastern
District of Louisiana (the "Bankruptcy Court") to facilitate
a restructuring of their debt. The Company continues to
operate its business as debtors-in-possession under the
jurisdiction of the Bankruptcy Court and in accordance with
applicable provisions of the U.S. Bankruptcy Code. In
connection with the filing, the Company has received a
commitment for $6.9 million in new debtor-in-possession
("DIP") financing from Regions Bank and Export Development
Canada (together, the "Banks"). In addition, the Banks have
committed to provide a discretionary facility of up to $2.0
million for bonding and letters of credit. Upon Bankruptcy
Court approval and execution of definitive agreements, the
DIP financing will provide funding for the Company's ongoing
operations.
A copy of the press release, dated January 7, 2005,
announcing the bankruptcy filing is attached hereto as
Exhibit 99.1 and is incorporated herein by reference.
Item 2.04 Triggering Events That Accelerate or Increase a
Direct Financial Obligation or an Obligation
under an Off-Balance Sheet Arrangement.
In addition to the previously announced default, on January
4, 2005, prior to the Company's filing for reorganization
under Chapter 11, the Company received notice from General
Electric Capital Corporation ("GE Capital") that it, and
Torch Offshore, L.L.C. were in default under the loan
agreement dated March 21, 2003, as amended (the "Loan
Agreement"). Under the terms of the Loan Agreement, the
Company was required to make monthly payments of principal
and interest over seven years. Prior to the default, the
interest rate under the Loan Agreement was a variable rate
of the 30-day commercial paper rate plus 2.03%. In the
notice, GE Capital advised the Company that as a result of
the default, the entire indebtedness due under the Loan
Agreement was due immediately. Additionally, the outstanding
debt will now accrue interest at the default rate provided
in the Loan Agreement, which is equal to the greater of
18.0% per annum or 2.0% over the interest rate as defined in
the Loan Agreement.
Further, GE Capital also exercised its right under the
Security Deposit Pledge Agreement (the "Pledge Agreement")
dated March 21, 2003, between GE Capital and Torch Offshore,
L.L.C. The Pledge Agreement allows GE Capital to apply the
$1.25 million security deposit towards the satisfaction of
the Company's obligation, which they have done. In addition,
the Pledge Agreement states that the Company is obligated to
pay $1.25 million to GE Capital to replenish the security
deposit at the earliest possible date.
As of January 10, 2005, an aggregate principal amount of
$7.4 million is outstanding under the Loan Agreement, which
is secured by one of the Company's vessels, the Midnight
Eagle (C-Mar America, Inc. arrested the Midnight Eagle in
late December 2004).
Item 5.02 Departure of Directors or Principal Officers;
Election of Directors; Appointment of Principal
Officers.
On January 7, 2005, as part of the reduction in force
associated with the Company's voluntary petition for
reorganization under Chapter 11 of the U.S. Bankruptcy Code,
Vincent Lecarme, Senior Vice President - Operations, was
terminated effective immediately. Mr. Lecarme served as
Senior Vice President - Operations since October 2004.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits.
Exhibit Number Description
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99.1 Torch Offshore, Inc. Press Release, dated
January 7, 2005
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: January 10, 2005 ------------------------
Robert E. Fulton
Chief Financial Officer
EXHIBIT INDEX
Exhibit Number Description
-------------- -----------
99.1 Torch Offshore, Inc. Press Release, dated
January 7, 2005
Exhibit 99.1
NEWS RELEASE
For immediate release to:
Analysts, Financial Community, Media
Contact: Bob Fulton (1) 504-367-7030
Bradley Lowe (1) 504-367-7030
Torch Offshore Files Voluntary Chapter 11 Petition
to Facilitate Debt Restructuring and
Ensure Ongoing Operations
New Orleans, Louisiana USA, January 7, 2005
Torch Offshore, Inc. (NASDAQ: TORC) (the "Company")
announced today that the Company and certain of its
affiliates filed voluntary petitions for reorganization
under Chapter 11 of the U.S. Bankruptcy Code in the Eastern
District of Louisiana to facilitate a restructuring of the
Company's debt. In conjunction with the filing, the Company
has received a commitment for $6.9 million in new debtor-in-
possession ("DIP") financing from Regions Bank and Export
Development Canada (together, the "Banks"). In addition, the
Banks have agreed to provide a discretionary facility of up
to $2.0 million for bonding and letters of credit. Upon
Bankruptcy Court approval and execution of definitive
agreements, the DIP financing will provide funding for the
Company's ongoing operations.
"The Company has been operating with a highly leveraged
balance sheet for some time now, mostly due to the
conversion efforts associated with the Midnight Express, "
said Lyle G. Stockstill, Torch Offshore, Inc. Chairman and
Chief Executive Officer. "Our liquidity issues were worsened
by the competitive marketplace in which we operate as the
Gulf of Mexico offshore construction industry remained very
competitive in 2004 with an extremely tight pricing
structure."
In late December 2004, the Company announced that three of
its vessels, the Midnight Express, Midnight Wrangler and
Midnight Eagle, had been arrested by U.S. Marshals based
upon actions taken by certain creditors of the Company.
"When we determined that it would be difficult to have these
seizures released so that our vessels could go back to work,
it was concluded that Chapter 11 reorganization was the best
course of action for the Company," said Stockstill. "The
decision to seek protection under Chapter 11 will allow the
Company to restructure its balance sheet while we continue
to operate our fleet of vessels."
During the Chapter 11 proceedings, Torch will continue to
operate in the ordinary course of business. The Company said
that it intends to request Court approval to, among other
things, continue payment of pre-petition and post-petition
wages, salaries, incentive plans, and medical, disability,
vacation and other benefits. The Company intends to do
business with customers and vendors in the same manner as
before.
"We appreciate the loyalty and support of our current
employees," said Stockstill. "The dedication of our
employees is critical to the success of the Company. In
addition, I would like to thank our customers, vendors and
business partners for their continued support during this
process. We will do our best to have a successful
reorganization."
Established in 1978, Torch Offshore, Inc. is involved in
offshore pipeline installation and subsea construction for
the oil and natural gas industry. Torch Offshore, Inc. is
expanding beyond its established shallow water niche market
in order to serve the industry's worldwide growing needs in
the deep waters.
Any statements made in this news release, other than those
of historical fact, about an action, event or development,
which the Company hopes, expects, believes or anticipates
may or will occur in the future, are forward-looking
statements under the Private Securities Litigation Reform
Act of 1995. The forward-looking statements in this news
release include statements about the Company's ability to
continue as a going concern; the ability of the Company to
obtain court approval with respect to motions in the Chapter
11 proceeding filed by it from time to time, including the
motions filed with the Company's first day papers to
approve, among other things, the DIP financing; the ability
of the Company to operate pursuant to the terms of the DIP
financing; the ability of the Company to develop, prosecute,
confirm and consummate one or more plans of reorganization
with respect to the Chapter 11 proceeding; risks associated
with third parties seeking and obtaining court approval to
terminate or shorten the exclusivity period for the Company
to propose and confirm one or more plans of reorganization,
for the appointment of a Chapter 11 trustee; potential
adverse publicity; the ability of the Company to obtain and
maintain adequate terms with vendors and service providers;
the potential adverse impact of the Chapter 11 proceeding on
the Company's liquidity or results of operations; the
ability of the Company to fund and execute its business
plan; the ability of the Company to attract, motivate and/or
retain key executives and employees; changes in general
economic and business conditions (including the oilfield
service construction market); any inability to protect our
intellectual property rights; the outcome of legal
proceedings to which we are or may become a party; and other
factors. Such statements are subject to various assumptions,
risks and uncertainties, which are specifically described in
the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 2003 filed with the Securities and
Exchange Commission, as well as other factors that may not
be within the Company's control, including, specifically,
oil and natural gas commodity prices, weather conditions and
offshore construction activity levels. Although the Company
believes its expectations are based on reasonable
assumptions, it gives no assurance that the Company's
assumptions and projections will prove to be correct. Actual
results may differ materially from those projected.