Crosby Marine Transportation - Chapter 11 Case Summary

Business Description

Headquartered in Galliano, LA, Crosby Marine Transportation, LLC ("CMT"), together with Crosby Tugs, L.L.C. ("Crosby Tugs"), Crosby Dredging, LLC ("Crosby Dredging," and together with CMT and Crosby Tugs, the "Crosby Debtors"), Bertucci Contracting Company, L.L.C. ("Bertucci," and together with the Crosby Debtors, the "Debtors"), Crosby Enterprises, LLC ("Crosby Enterprises"), and their affiliated entities (collectively, the "Company"), is one of the largest privately owned transportation businesses in the marine industry. Founded over 50 years ago by Vinton and Kurt Crosby, the Company is strategically located in Golden Meadow, Louisiana, providing easy access to both the Gulf of America and inland waterways.

• The Company operates a fleet of approximately 200 vessels and marine equipment, including airboats, assist boats, barges, crew boats, dragline cranes, dredges, excavators, flatboats, a floating drydock, houseboats, and tugs.
• The Company's tug fleet consists of approximately 90 vessels — offshore, inshore, and assist tugs — with vessel horsepower ranging from 600 HP to 16,500 HP, enabling the Company to address virtually any customer's marine transportation need.

The Company's fleet and experienced crews have established Crosby as a trusted name in marine transportation, leading to contracts with an array of local, national, and international customers, including TPC Group, Cantium, Arena Offshore, SpaceX, Heerema, and Chevron. As of the Petition Date, the Debtors employed approximately 850 full-time employees onshore and offshore.

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Corporate History

Crosby Tugs began in 1977 when father and son Vinton and Kurt Crosby acquired the first vessel, the Paddy Crosby. Since that initial acquisition, the Company has grown through a series of major acquisitions, expanding from a single tug to a fleet of approximately 200 vessels and marine equipment.

• More recently, the Company entered the dredging business through Crosby Dredging, specializing in coastal restoration and oilfield services. Crosby Dredging has performed dredging work for the U.S. Army Corps of Engineers (the "Army Corps"), the Louisiana state government, Louisiana parish governments, and private businesses, drawing on its crews' many years of experience and deep local knowledge of Louisiana's inland bodies and waterways.
• In 2021, the Company, through Bertucci, entered into a joint venture with Luhr Bros., Inc. to create Luhr Crosby, LLC ("Luhr Crosby"), now one of the largest heavy marine construction firms in the United States. Luhr Crosby is not burdened by the Company's debt load, is not in need of restructuring, and is not and will not be a Debtor; however, the Company's equity stake in Luhr Crosby represents a valuable component of its asset structure and an important element of its overall restructuring.

Organizational Structure

The primary holding entity for the Company is Crosby Enterprises, a Non-Debtor Affiliate. Crosby Tugs serves as the primary operating entity for the Tug Business, and Crosby Dredging serves as the primary operating entity for the Dredge Business, with Crosby Tugs additionally providing certain enterprise-wide functions — including accounting — for affiliates within the Company, including Crosby Dredging.

• Approximately 80% of the Company's fleet is owned by CMT. CMT does not maintain employees; its vessels are crewed, operated, and chartered by Crosby Tugs.
• The Company's fleet is maintained, repaired, and refurbished at drydock and topside and bottom-side repair yards owned and operated by a Company affiliate, Crosby Marine Repair, L.L.C. ("CMR"), in Houma, Louisiana.

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Operations Overview

The Company generates revenue from two core businesses — the Tug Business, operated by Crosby Tugs, and the Dredge Business, operated by Crosby Dredging — and holds a minority interest in Luhr Crosby through Bertucci.

Tug Business

Crosby Tugs deploys its expertly crewed tug and barge fleet to satisfy customers' inshore and offshore marine transport needs. The Tug Business encompasses a broad range of services, including:

• Assisting small freighters, container ships, aircraft carriers, Very Large Crude Carriers ("VLCCs"), and other vessels into and out of berths.
• Escorting oil tankers quickly and safely through shipping channels and environmentally sensitive waters.
• Towing ships, semi-submersible rigs, landing platforms, and other vessels.
• Operating in extreme climates and sea conditions, with the capability to respond to offshore emergencies such as vessel fires and fuel spills.

Crosby Tugs serves as the primary customer-facing entity and contract counterparty for the Tug Business, and handles billing, invoicing, and receivables collection.

Dredge Business

Crosby Dredging operates a fleet of both bucket and suction dredges, enabling the Company to flexibly adapt between large- and small-scale dredging and coastal restoration projects for customers including the Army Corps, state and local governments, and private enterprises. Crosby Dredging has developed particular expertise in marsh regeneration and coastal restoration.

• Logistical support from Crosby Tugs reduces mobilization and demobilization costs for dredge jobs, allowing Crosby Dredging to operate more affordably and efficiently and providing it a pricing advantage over competitors.
• Crosby Dredging serves as the primary customer-facing entity and contract counterparty for the Dredge Business, and handles billing, invoicing, and receivables collection.

Luhr Crosby Interest

In addition to the two core operating businesses, the Company, through Bertucci, holds a 49.9% interest in Luhr Crosby. Luhr Crosby's business consists of providing turnkey top-tier rock and marine construction services to the Army Corps and private owners as a primary or sub-contractor.

Fleet Maintenance Advantage

CMR owns and operates drydock and topside and bottom-side repair yards in Houma, Louisiana, where the Company's fleet is maintained, repaired, and refurbished. The ability to service vessels at its own yards constitutes a significant competitive advantage, enabling the Company to refurbish aging vessels to top-of-the-line condition with below-market capital investment.

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Prepetition Obligations

As of the Petition Date, the Debtors had approximately $162,758,685 in aggregate funded debt. These obligations arise under the Hancock Whitney Facility, secured by the Crosby Debtors' accounts receivable and Bertucci's interest in Luhr Crosby, and 14 collateral-based Fleet Facilities, each secured by liens attaching to a different portion of the Company's fleet of vessels and equipment. The Fleet Facilities are primarily secured by preferred ship mortgages.

Hancock Whitney Facility

As of the Petition Date, approximately $29,240,625 remained outstanding under the Hancock Whitney Facility, which is secured by a first-priority lien on the Crosby Debtors' accounts receivable and Bertucci's pledge of its 49.9% interest in Luhr Crosby. The Hancock Whitney Facility arose from a series of transactions connected to the formation of the Luhr Crosby joint venture:

• When Bertucci contributed the Bertucci Equipment to the joint venture as part of its capital contribution, that equipment was financed and subject to a lien in favor of Hancock Whitney. To allow the contribution to occur free and clear of all liens, the Crosby Debtors and certain non-Debtor affiliates assumed Bertucci's indebtedness to Hancock Whitney and agreed to secure the Hancock Whitney Facility with a first-priority lien on the Crosby Debtors' accounts receivable. Bertucci also guaranteed the Crosby Debtors' obligations to Hancock Whitney and pledged its 49.9% Luhr Crosby stake as additional security.
• Following the formation of Luhr Crosby, Bertucci's accounts receivable balance in favor of the Crosby Debtors reached $30 million. The Crosby Debtors exchanged this right to payment for two demand notes executed by Bertucci in favor of Crosby Tugs (the "Demand Notes").

Fleet Facilities

The 14 Fleet Facilities are each secured by liens on different portions of the Company's fleet, primarily through preferred ship mortgages. Certain Other Secured Lenders have also filed UCC-1 Financing Statements that may give rise to liens on the Crosby Debtors' inventory and receivables. The secured creditors under the Fleet Facilities include:

• Hancock Whitney: approximately $29,240,625
• PNC Bank: approximately $25,376,543
• Regions Bank: approximately $18,988,872
• City National Bank: approximately $18,022,087
• ARBA (Truist): approximately $11,445,066
• JJ Astor: approximately $10,800,000
• Kompass Kapital Funding: approximately $9,907,373
• MC Bank: approximately $9,706,275
• South Lafourche Bank: approximately $7,579,796
• Atlantic Union: approximately $7,154,331
• Banc of America: approximately $6,279,192
• Citizens Bank: approximately $2,820,233
• State Bank: approximately $2,395,659
• ELGA: approximately $2,162,053
• Post Road (Encina): approximately $880,581

Non-Debtor Affiliate Mortgage Obligations

The Company's real property is held by two Non-Debtor Affiliates and is subject to mortgage obligations with Bank Plus:

• CMR, which owns the Company's drydock and shipyards: approximately $8,560,560 outstanding.
• Tala Real Estate, L.L.C. ("TRE"), which owns the office building containing Company headquarters and a warehouse facility: approximately $3,010,376 outstanding.

Merchant Cash Advance Agreements

To address short-term cash liquidity stress, the Crosby Debtors entered into a number of merchant cash advance ("MCA") agreements with various MCA Parties. The MCA Parties assert either ownership of certain of the Debtors' receivables and/or have filed UCC-1s purporting to perfect a security interest in those receivables. Any liens held by the MCA Parties in the Crosby Debtors' receivables and inventory are inferior to the first-priority lien securing the Hancock Whitney Facility, and any asserted ownership of receivables is likewise subject to that lien.

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Events Leading to Bankruptcy

Industry and Operational Headwinds

A combination of external and internal forces converged to weaken the Company's financial condition. Crosby Tugs, like other marine transportation firms, was adversely affected by the general contraction of offshore energy operations in the Gulf of America. Several of Crosby Tugs' customers underwent their own restructurings, with consequences cascading to Crosby Tugs' operations and collections. Concurrently, Crosby Dredging's operations slowed due to cuts to coastal restoration and dredging projects in Louisiana. These pressures were compounded by volatile fuel costs.

Debt Structure Deterioration

The Crosby Debtors also contended with a complex and burdensome debt structure. A collateral valuation triggered a technical default on the PNC Vessel Facility, which in turn triggered default interest rates. Further, the Crosby Debtors' assumption of the Hancock Whitney Facility — undertaken to facilitate the formation of Luhr Crosby — and the subsequent exchange of valuable accounts receivable for the Demand Notes simultaneously increased the Crosby Debtors' debt load while reducing their capacity to service that debt.

Merchant Cash Advance Spiral and Emergency Liquidity Crisis

Faced with a mounting liquidity shortfall, the Crosby Debtors turned to MCA firms for short-term cash flow support. While the MCA Funding provided immediate access to cash, its cost — sometimes nearing 100% interest — was not sustainable and substantially worsened the Crosby Debtors' liquidity problem, creating a destructive feedback loop in which deteriorating liquidity drove ever-greater reliance on increasingly costly MCA Funding.

• Prior to February 24, 2026, certain MCA Parties made daily draws from the Tugs Receipts Account and Dredge Receipts Accounts. Prior to the CRO's retention in late February 2026, the MCA Parties had, in aggregate, collected the full amount of MCA Funding advanced to the Crosby Debtors plus more than $20 million in additional cash. At that time, weekly ACH payments initiated by the MCA Parties were approaching $900,000 per week.
• To conserve cash and preserve the Debtors as going concerns, the Debtors withdrew the MCA Parties' ability to draft on the Debtors' accounts. In response, certain MCA Parties sent confusing letters to the Debtors' customers demanding direct payment of receivables, dispatched representatives to the Debtors' physical offices to collect debts in-person, contacted and made demands on the Company's customers, vendors, and lenders, and solicited on behalf of affiliated law firms and debt work-out companies.
• These actions caused the Debtors' customers to withhold payment of receivables — receivables that are subject to the priming lien of Hancock Whitney and without which the Debtors cannot continue to operate or pursue the Marketing Processes — precipitating an emergency liquidity crisis that necessitated the Chapter 11 filing.
• In coordination with Hancock Whitney, the Debtors directed customers to remit receivable payments into a segregated Hancock Whitney account, from which Hancock Whitney provided the Crosby Debtors access to fund critical operational expenses, including payroll, as the Debtors prepared to file.

Prepetition Restructuring Efforts

In late 2025, the Company retained Raymond James to explore a sale of the Company's 49.9% interest in Luhr Crosby (the "Luhr Crosby Process"). On February 1, 2026, the Company also engaged Raymond James to advise on a comprehensive recapitalization effort (the "Recapitalization Process," and together with the Luhr Crosby Process, the "Marketing Processes"). As part of the Recapitalization Process, Raymond James built a virtual data room, completed initial outreach, distributed teasers and confidential information memoranda, obtained executed NDAs from investors, completed initial diligence rounds, and began accepting non-binding term sheets.

• In total, Raymond James contacted approximately 123 prospective parties — including 73 lenders, 31 equity investors, and 19 strategic buyers — along with an additional 80 prospective buyers in connection with the Luhr Crosby Process. Of the 123 parties contacted, 60 signed NDAs and received access to the virtual data room.
  • Of those 60 parties, only three submitted non-binding indications of interest — all three for DIP financing. No party submitted an indication of interest to provide incremental liquidity on an out-of-court basis. Various lenders, including Hancock Whitney, indicated they were only comfortable providing financing in a Chapter 11 debtor-in-possession context.
• SCP was engaged to provide restructuring advisory services in late February 2026, with Lawrence Perkins of SCP formally retained as CRO effective February 28, 2026. While the Debtors and their advisors made progress toward a comprehensive out-of-court restructuring, it became clear that the Debtors needed to prepare for a contingency Chapter 11 filing to avoid a full-scale liquidation — an outcome the CRO characterized as disastrous for employees, secured and unsecured creditors, and the Company's other stakeholders.

Chapter 11 Filing and DIP Financing

On March 23, 2026 (the "Petition Date"), each of the Debtors commenced a voluntary Chapter 11 case in the U.S. Bankruptcy Court for the Eastern District of Louisiana. The Debtors intend to complete the Marketing Processes through the Chapter 11 Cases and believe they have a clear path to Chapter 11 exit.

• As of the Petition Date, the Debtors secured a commitment for a $60 million senior secured superpriority DIP financing facility (the "DIP Facility") provided by JMB Capital Partners Lending, LLC ("JMB"), comprising $30 million in new money and $30 million to roll up and refinance the Hancock Whitney Facility.
  • On an interim basis, up to $40 million is available, comprising approximately $10 million in new-money loans and an approximately $30 million roll-up of the Hancock Whitney Facility. On a final basis, at least an additional $20 million in new-money loans is available.
  • As part of the DIP Facility, JMB purchased Hancock Whitney's position and stepped into the role of prepetition lender under the Hancock Whitney Facility on March 20, 2026.
  • The DIP Facility is designed to provide a liquidity cushion for operations and fund professional fees as the Debtors complete the Marketing Processes.