GulfMark noteholder group denied effective date ahead of board payment

By Caroline Salls

Pittsburgh, Nov. 8 – A motion from GulfMark Offshore, Inc.’s informal committee of unsecured noteholders that asked the U.S. Bankruptcy Court for the District of Delaware to order that the company’s Chapter 11 plan take effect without immediate payment of some benefits to board members was denied Wednesday by the court.

“A change in control will occur on the effective date because the new board of directors will replace debtor’s previous board of directors,” judge Kevin Gross said in Wednesday’s order. “The change in control allows implementation of the [deferred compensation plan] on the effective date.”

The committee said in its motion that GulfMark’s departing board of directors seeks to accelerate the payment of roughly $5 million in cash on account of deferred compensation plan benefits, including about $4 million to chairman David Butters and almost $1 million to director Peter Bijur, “in clear violation of the Chapter 11 plan, the deferred compensation plan and equitable principles underlying the Chapter 11 process.”

“In derogation of its duties to the estate and as a blatant act of self dealing, the board has refused to permit the debtor to emerge from Chapter 11 unless and until such payments are made to its members,” the motion said.

In addition, the committee said GulfMark “can and must proceed to consummate the Chapter 11 plan,” as the primary task to be completed between the confirmation hearing and the plan effective date was negotiation and documentation of the exit financing.

Houston-based GulfMark Offshore provides marine transportation services to the energy industry. The company filed bankruptcy on May 17 under Chapter 11 case number 17-11125.

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