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Law360 (August 27, 2020, 7:43 PM EDT ) Bankrupt oil driller Hermitage Offshore Services Ltd. announced Thursday that it will contest a decision by the New York Stock Exchange from earlier this month to delist its shares from the trading exchange after the company filed for Chapter 11 protection in New York on Aug. 11.
In a statement, Hermitage said it has significant doubts about its own ability to continue operating its business once its bankruptcy case is over and can't guarantee that its shares will have any value by the end of the proceedings, but is pursuing the appeal in spite of those doubts regardless.
"Nevertheless, the company has decided to appeal the delisting determination at this time because it believes that the significant uncertainty surrounding the outcome of the bankruptcy proceedings [does] not allow for a meaningful assessment of the company's ability to meet the NYSE's continued listing standards following the completion of the bankruptcy proceedings and that therefore the initiation of delisting procedures at this time is premature," Hermitage said in the statement.
Hermitage disclosed the commencement of the delisting action through a filing with the U.S. Securities and Exchange Commission on Aug. 12. The exchange said it felt that Hermitage— whose stock trades under the symbol PSV— no longer qualified for listing due to the filing of its Chapter 11 petitions.
On Thursday, Hermitage stock closed at $0.56 per share after opening the day at $0.35, according to trading records, hitting $0.84 around noon. The records show that the company was trading as high as $1.88 on July 10 before dropping to $0.55 the day it filed for bankruptcy protection.
At the time it began its bankruptcy proceedings, Chief Financial Officer Christopher Avella said that in light of the "unprecedented collapse" in oil prices and the expected impact of COVID-19, the company began preparing for restructuring early this year. He said it began discussions with two potential buyers, one of which dropped out when the pandemic's impact on the oil industry became clearer.
The company also began undertaking cost-cutting measures, sold its interest in two anchor handling tugs and negotiated a series of forbearances with its lenders while it attempted to negotiate an out-of-court restructuring, he said. The last forbearance expired Aug. 11 and the lenders withdrew $3.3 million from the company's bank accounts, leading to the Chapter 11 filing to preserve the company's remaining liquidity, he said.
Incorporated in the Marshall Islands in 2013, Hermitage's fleet includes modern harsh environment platform supply vessels, crew boats and anchor handling vessels, according to the company's website. The company went public in 2014 on the New York Stock Exchange.
According to its Chapter 11 filings, the company currently has $132.9 million in secured debt.
Hermitage is represented by Brian S. Rosen and Joshua A. Esses of Proskauer Rose LLP.
The case is In re: Hermitage Offshore Services Ltd., case number 20-11850, in the U.S. Bankruptcy Court for the Southern District of New York.
--Additional reporting by Jeannie O'Sullivan. Editing by Steven Edelstone.
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