Shipyard files Chapter 11, but Derecktor Maintains its Course to Grow
Derecktor Shipyards Conn., LLC last month filed a voluntary petition for reorganization under Chapter 11 of the United States Bankruptcy Code. The company said the filing was the result of a single contract dispute, and that it is still busy and fully staffed, working on several newbuild projects, including a contract to build a massive 85.6-m motor yacht, a 45-m catamaran and a pair of tugboats for Boston Towing and Transport. In addition, the Derecktor yard in Connecticut has a building slot open starting September 2008, as well as a build slot available for delivery at the end of 2011/beginning of 2012.
"The company has been engaged in lengthy negotiations to resolve issues relating to one of its contracts," said Paul Derecktor, president. "Unfortunately, the resolution of those issues was made impossible to achieve outside of the bankruptcy process.
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. The company is committed to complete the reorganization as quickly as possible."
Derecktor was, at press time, working steadfast to bring the situation to a rapid conclusion, and concentrate on the business it knows best: building quality vessels and expanding its operations in both the motor yacht and commercial boatbuilding business, to increase efficiency and quality.
Derecktor Shipyards has long roots in the boatbuilding business. Started by Robert E. Derecktor in Mamaroneck, NY in 1947 as a small waterfront shop with a handful of workers, the company has since grown dramatically, and today it operates boat building, servicing and refit operations in Mamaroneck, NY, Bridgeport, Conn., and Ft. Lauderdale, Fla. Since opening its doors in 1947, the company has delivered more than 250 boats, including motor yachts, high-speed passenger ferries and workboats. "We intend to use this reorganization process to take the actions necessary to ensure that the company remains a worldwide leader in the building of custom boats," said Paul Derecktor.
Building for the Future
While the contract dispute and court filing dominates the company's attention at the moment, it continues to work on projects in the pipeline and plan for the future, with a trio of new motor yacht designs being prepared for unveiling at the Monaco Yacht Show in September and facilities expansion in Bridgeport. While details of the new yacht designs are tightly under wraps until September, John P. Gallagher, vice president of operations, was able to shed some light on the company's plans for the Bridgeport facility, saying that the company is looking forward to a bright future serving the needs of the large yacht and commercial sectors.
The Derecktor facility in Bridgeport was built just six years ago, and features many modern material processing machines and procedures. Derecktor, already adept at working in both steel and aluminum, earlier this year was awarded a $863,515 grant for a bulk welding gas distribution system, air casters and cradles for moving larger units, as well as a hydraulic pipe bender, which was a part of the U.S. Maritime Administration $9.8m in grants to 19 small shipyards in the U.S.
According to Gallagher, the company has a number of facility upgrades on the board, upgrades designed to make the process of building and outfitting luxury megayachts - side by side with commercial workboats — more efficient, cost-effective and to an ever increasing quality standard. In April the company won a Planning & Zoning Commission approval to add three buildings to its 23-acre site at 837 Seaview Ave. While he could not share a timetable or investment figure, Gallagher said the company is eying a number of improvements, including:
• extending its bulkhead and dredging deeper for a larger outfitting berth;
• increasing its plate cutting and handling facilities;
• expanding its block assembly facilities;
• increasing its lifting capability; and
• enhancing its warehousing system explaining that outfitting today's megayachts requires investment in process management to keep materials and work flowing efficiently.
While the company is clearly focusing much of its current production and marketing efforts to the luxurious megayacht segment, it recently won a high-profile commercial contract to build, for the first time in its history, a pair of tugboats — measuring 39 and 30 m respectively — for Boston Towing. The tugs are being built to fulfill Boston Towing's LNG Escort and Berthing operations. While the contract is unique to Derecktor and Gallagher concedes that challenges lie ahead, particularly in the handling of heavier pieces, he is confident in the yard's ability to fulfill the contract, saying "we have certainly built more complicated boats."
(Reprinted from the August 2008 edition of Maritime Reporter & Engineering News)