Montco Offshore U.S. trustee objects to sponsorship bid procedures

By Caroline Salls

Pittsburgh, July 12 – The U.S. trustee overseeing Montco Offshore, Inc.’s Chapter 11 case objected to the company’s plan sponsorship bid procedures, arguing that the proposed procedures “will likely chill the bidding process and discourage potential bidders from participating in the sale process, thus preventing MOI from maximizing the value of the estate assets.”

In the objection filed July 11 with the U.S. Bankruptcy Court for the Southern District of Texas, Region 7 U.S. trustee Judy A. Robbins said the terms of the bid procedures are vague, and the thresholds by which an alternate bid to that proposed by stalking horse bidder Seacor Liftboat Holdings LLC is determined to be a qualified or minimum bid are based on a formula or numbers that rely on a valuation of assets that is not currently available.

In addition, Robbins said the bid procedures call for payment of a break-up fee if Seacor is not the high bidder that “is also based on an undetermined value.”

Finally, the U.S. trustee said the proposed expense reimbursement provides for the reimbursement of up to $3 million, if not more, in expenses without providing parties in interest or the court any rights to review those expenses.

Houston-based Montco operates lift boats for the offshore energy industry. The company filed for bankruptcy on March 17 under Chapter 11 case number 17-31646.

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