Last Thursday I came across a story in a Connecticut newspaper’s online edition stating that Derecktor Shipyards’ facility in Bridgeport had filed for reorganization under Chapter 11. The news took some in the region as well as in the megayacht business by surprise.
In an official statement, Paul Derecktor, president of the yard, says, “The Company has been engaged in lengthy negotiations to resolve issues relating to one of its contracts. Unfortunately, the resolution of those issues were made impossible to achieve outside of the bankruptcy process.”
The contract in question involves one of the megayachts under construction, though no identifying details were released. Other factors (not named) were involved in the decision to file for Chapter 11, according to the statement, though the yacht was the biggest one.
If you’re not familiar with bankruptcy proceedings, Chapter 11 permits a company to propose a plan to reorganize so that it can pay its creditors and become profitable again. Management continues to operate the day-to-day business, but any major decisions outside that realm need approval from the bankruptcy court. In Derecktor’s case, “The action we have taken is a necessary step to preserve the Company’s value for its creditors, customers, employees and other stakeholders as we work towards the future success of the Company,” Paul Derecktor says. “The Company is committed to complete the reorganization as quickly as possible.”
The good news is, employees will continue to be paid and be covered by their usual benefits, and no staffers have been laid off. A representative for Derecktor Shipyards who wished to remain anonymous tells me work is continuing on all other projects (Derecktor builds ferries and workboats in addition to yachts). The yard, which has been around since 1947, fully intends to participate in the upcoming Monaco Yacht Show, where it will reveal details about Dancer, its new 281-foot motoryacht. The yard will also have a stand at the Fort Lauderdale International Boat Show. The anonymous representative additionally informs me that the yard is on the short list for a number of new-build projects and has one slot available.
As further developments occur, I’ll post updates accordingly. I also have a visit planned to the yard within the coming month to see its yacht projects.
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