EEW American Offshore Structures - Chapter 11 Case Summary

Business Description

On April 8, 2026 (the "Petition Date"), EEW American Offshore Structures Inc. ("AOS") and EEW AOS Paulsboro Urban Renewal, LLC ("URE," together with AOS, the "Debtors"), each filed voluntary petitions for relief under Chapter 11. Headquartered in Paulsboro, New Jersey, the Debtors are the U.S. operating entities of the EEW Group (collectively, "EEW" or the "Company"), a leading global manufacturer of longitudinally welded steel pipes with a corporate history dating back to 1936.

• Headquartered in Germany, the EEW Group operates six steel pipe production facilities worldwide, supplying pipes used across a wide array of applications, primarily for the offshore wind, oil, gas, and chemical industries, as well as for mechanical engineering.
• Having adapted to the renewable energy boom at the start of the 21st century, the EEW Group established itself as a pioneer in the production of pipes for offshore wind foundations and viewed the U.S. offshore wind market as one of its most important future markets for continued growth.

AOS was positioned to serve as the primary manufacturer and distributor of monopiles for the U.S. offshore wind market, with a particular focus on windfarms expected to be built on the New Jersey coast. Monopiles are the steel foundations that support offshore wind turbines and can reach up to 400 feet in length.

Both AOS and URE maintain their principal address at 100 Offshore Drive, Paulsboro, New Jersey 08066. The principal assets of both Debtors are located in New Jersey.

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Corporate History

Intent on extending its global footprint into the United States, the EEW Group identified New Jersey—then experiencing a political movement to build offshore windfarms—as the ideal entry point for its U.S. expansion. In October 2019, the EEW Group established AOS as a Delaware corporation to capitalize on the emerging domestic offshore wind sector.

New Jersey Offshore Wind Momentum

• In June 2019, the New Jersey Board of Public Utilities selected Denmark-based offshore wind developer Ørsted for an offshore wind farm project known as "Ocean Wind 1."
• Reinforcing the State's commitment to sustainable and renewable energy production, New Jersey Governor Phil Murphy announced a $250 million investment in December 2020 to develop a new monopile manufacturing facility at the Paulsboro Marine Terminal (the "PMT").

Key Customer Agreements

• In April 2021, Ørsted and the Debtors announced they had signed a Project Labor Agreement under which the Debtors would produce the monopiles for Ocean Wind 1.
• In 2022, the Debtors entered into an agreement with Atlantic Shores Offshore Wind Project 1, LLC ("Atlantic Shores") to construct the monopiles for Atlantic Shores' offshore wind project ("Atlantic Shores Project 1"). At the time, Atlantic Shores Project 1 represented the largest single project awarded in New Jersey and the third largest offshore wind project in the United States.

Organizational Structure

AOS, a Delaware corporation organized in October 2019, is a wholly-owned subsidiary of non-debtor German holding company EEW AOS Holding GmbH ("AOS Holding"), which serves as the sole shareholder of AOS.

• URE: Organized as a Delaware limited liability company in July 2023, URE is a subsidiary of AOS, with AOS serving as its sole member. On October 26, 2023, a separate New Jersey limited liability company of the same name merged with URE, with URE surviving as the remaining entity.
• Ultimate Parent Ownership: The ultimate beneficial owners of AOS Holding also own non-debtor German entity DiScho Vermögensverwaltung GmbH & Co. KG ("DiScho"), which serves as the parent to non-debtor German entities EEW Offshore Wind Holding GmbH & Co. KG and EEW Pipe Solutions Holding GmbH & Co. KG (collectively with AOS, URE, and related non-debtor affiliates, the "EEW Group").

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Operations Overview

To support the manufacturing, storage, and transportation of monopiles for the U.S. offshore wind market, the Debtors—with the support of third parties—secured a portion of the Paulsboro Marine Terminal, which provided direct access to the deepwater port infrastructure required for the shipping of monopiles to offshore windfarm locations. Development of the PMT site, however, was ultimately never completed.

Community and Workforce Commitments

The Debtors' planned operations at the PMT were expected to generate meaningful employment and community engagement benefits throughout the surrounding region.

• Phase I of the development was projected to create more than 200 local jobs, with cumulative Phase II employment expected to exceed 500 jobs.
• The Debtors were committed to building community partnerships, including:
  • Establishing partnerships with government stakeholders and regional educational institutions to develop curriculum and training programs designed to empower and grow the clean energy workforce.
  • Engaging the regional community and workforce through public information sessions and outreach efforts focused on teaching about career opportunities in offshore wind manufacturing.

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Prepetition Obligations

As of the Petition Date, the Debtors reported approximately $9.7 million in total outstanding funded secured debt obligations and an estimated $12 million in unsecured indebtedness. The Company's prepetition capital structure is summarized below:

Secured Promissory Note

• On March 20, 2026, the Debtors and DiScho entered into a Secured Promissory Note and Security Agreement with a total principal balance of up to $2.6 million, maturing December 31, 2026.
  • The facility was structured as a bridge loan, intended to provide the Debtors with the liquidity necessary to satisfy current operating expenses and prepare for the Chapter 11 Cases.
  • As of the Petition Date, approximately $900,857.01 remained outstanding under the Prepetition Secured Note.

Intercompany Term Loans

• The Debtors and the Prepetition Secured Lender are party to a series of Intercompany Term Loan Agreements, each maturing December 31, 2026, with an aggregate outstanding balance of approximately $8.8 million as of the Petition Date. The individual facilities include:
  • February 26, 2026 Loan: ~$230,882.19
  • December 10, 2025 Loan: ~$2,041,600.10
  • September 22, 2025 Loan: ~$1,770,394.01
  • July 1, 2025 Loan: ~$2,686,255.66
  • June 20, 2025 Loan: ~$835,723.98
  • March 19, 2025 Loan: ~$1,210,160.83
• The obligations under the Prepetition Debt Documents are denominated in Euros and were converted to U.S. Dollars using the Euro/U.S. Dollar exchange rate as of April 1, 2026, with balances reflected as of March 31, 2026.
• Upon entry of the Interim Order, $3.25 million of the prepetition obligations will be deemed rolled up as a cashless advance under the DIP Credit Agreement. Upon entry of the Final Order, all remaining prepetition obligations will similarly be rolled up as a cashless advance under the DIP facility.

Unsecured Indebtedness

• As of the Petition Date, the Debtors estimate approximately $12 million in outstanding unsecured indebtedness, incurred in the ordinary course of business and owed to taxing authorities, landlord, utility providers, and service providers, among others.

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Events Leading to Bankruptcy

Macroeconomic Headwinds and Collapse of the U.S. Offshore Wind Pipeline

• The Debtors’ business model—predicated on manufacturing, storing, and shipping monopiles for the U.S. offshore wind industry—was upended by a precipitous reversal of the political and economic tailwinds that had previously underpinned substantial public and private investment in Atlantic coast windfarm development:
  • On October 31, 2023, Ørsted announced that, following a decision by its Board of Directors, it would cease development on Ocean Wind 1, citing, in part, high inflation, rising interest rates, and supply chain constraints.
  • In early 2025, the EPA pulled back Atlantic Shores' fully executed air permit, thereby impeding Atlantic Shores' regulatory approvals.
• With the cancellation of the windfarm projects that had originally motivated the Debtors and others to invest in the Paulsboro Marine Terminal (the “PMT”), there was no longer a near-term need for monopile production in New Jersey. In approximately October 2024, the Debtors paused their immediate plans to manufacture and provide monopiles for the Atlantic coast.

The Sublease and Phased Development of the Premises

• On January 1, 2021, AOS entered into a sublease (the “Sublease”) with Paulsboro Waterfront Development, LLC (“PWD”) covering approximately 85 acres of the PMT (the “Premises”)—a deep-water port facility on the Delaware River capable of accommodating a wide range of vessel sizes and providing access to both domestic and international shipping lanes. Inclusive of renewal options, more than 40 years remain on the Sublease term.
  • On July 21, 2023, AOS assigned all of its right, title, interest, liabilities, and obligations under the Sublease to URE pursuant to an Assignment and Assumption of Sublease.
• In April 2021, AOS, the Gloucester County Improvement Authority, the South Jersey Port Corporation, and Ocean Wind LLC executed a Joint Site Development Agreement to develop the Premises in two phases:
  • Phase I: Commenced in 2021 and completed in 2023, Phase I entailed approximately $110 million in capital infrastructure investment—financed by EEW and Ørsted as part of their local content commitment—including a welding building, painting facilities, material handling systems, essential roll-on/roll-off wharf infrastructure, and associated equipment.
  • Phase II: Commenced in early 2023 but was never completed as a result of economic and political disruptions beyond the Debtors’ control. Had Phase II been finished, the Premises would have hosted the first fully integrated monopile manufacturing plant in the United States—capable of producing 100 monopiles annually and materially reducing U.S. reliance on imported European monopiles.
• Notwithstanding the disruption in monopile demand, the Debtors have complied with all express and implied terms of the Sublease while they explore strategic alternatives and a suitable sub-tenant.

Prepetition Marketing Process

• Once the disruption to monopile production became apparent, the Debtors pivoted to identifying alternative, profitable uses for the Premises consistent with the Sublease—leveraging the site’s unique suitability for heavy industrial operations, direct vessel access to the Atlantic Ocean via two dedicated deep-water heavy-load wharves, and on-site materials available for the immediate construction of two state- and locally-approved buildings.
• To execute this strategy, the Debtors retained Hilco Corporate Finance, LLC (“Hilco”) to market the Premises and facilitate a sublease or other arrangement permitting a third party to take control of the site:
  • Hilco targeted parties offering a strategic fit for the Debtors’ assets and leveraged its geopolitical group to engage the Office of Strategic Capital within the Department of Defense to present the Premises as a strategic opportunity.
  • Throughout 2025, the prepetition marketing process reached 237 prospective buyers, generated multiple executed non-disclosure agreements, and remains ongoing.

The Sublease Litigation

• On October 7, 2025, PWD commenced state court proceedings against URE in the New Jersey Superior Court (the “Sublease Litigation”), seeking an order compelling URE to vacate the Premises and return possession to PWD based on alleged events of default under the Sublease:
  • The alleged defaults consist entirely of non-monetary covenant defaults—URE has never missed a rent payment or other monetary obligation. URE did elect to withhold the most recent quarterly rent due April 1, 2026, which remains subject to a ten-day cure period under the Sublease and is now stayed by the petition filings.
  • PWD contends that the sole permissible use of the Premises is the production and distribution of monopiles. The Debtors dispute this reading, noting that the Sublease more broadly permits the manufacture of iron and steel products and authorizes other uses with PWD’s advance written approval, which approval cannot be unreasonably withheld, conditioned, or denied.
• The Debtors had alerted PWD as early as January 2025 that they were marketing the Sublease in search of alternative uses that would require PWD’s approval. Rather than engaging constructively, PWD has—in the Debtors’ view—manufactured alleged events of default, disrupted the marketing efforts, interfered with potentially interested parties, and attempted to abridge the Debtors’ contractual rights.
• URE has asserted counterclaims against PWD for breach of contract, declaratory judgment, breach of the covenant of good faith and fair dealing, and tortious interference (collectively, the “Counterclaims”), alleging damages of not less than $50 million stemming from PWD’s interference with the Debtors’ monetization negotiations. Contemporaneously with the petition filings, URE filed a Notice of Removal bringing the Sublease Litigation before the Bankruptcy Court; the litigation remains in the early stages of discovery.

Collapse of the Prospective Owner Transaction

• On December 30, 2025, AOS informed PWD that it had entered into an agreement (the “Acquisition Agreement”) with a third party (the “Prospective Owner”) to acquire AOS’s membership interest in URE and assume operations of the Premises:
  • The Prospective Owner is a well-established U.S.-based maritime construction company and a subsidiary of a global parent corporation, both with long track records of success in the maritime industry. The Prospective Owner is primarily focused on high-tech naval defenses for the United States Navy, already maintains a major U.S. operational base, and has plans to invest an additional $5 billion to expand regionally and grow production capacity.
  • Under the Acquisition Agreement, the Prospective Owner was expected to revitalize the terminal, drive cargo volumes, create jobs on the Premises and throughout the region, and preserve PILOT payments for the Borough of Paulsboro—an outcome the Debtors viewed as universally beneficial to all stakeholders, including PWD.
• Due to the ongoing Sublease Litigation and PWD’s alleged interference with the Acquisition Agreement, the Prospective Owner walked away from the transaction on March 3, 2026. Following that development, the Debtors and Hilco restarted the marketing process for the Sublease and began preparations to continue those efforts under the protections of Chapter 11.

Liquidity Position and DIP Facility

• With no reserve funds, no expectation of meaningful near-term receipts, and insufficient cash-on-hand to fund operations as a going concern, postpetition financing became a necessity for the Debtors to preserve estate value and pursue a value-maximizing sale transaction:
  • Following approximately two weeks of arm’s-length, good-faith negotiations with the proposed DIP Lender, the Debtors—assisted by the CRO—developed a 13-week operating budget reflecting minimum requirements of at least $6.5 million to file the Chapter 11 Cases, establish a bid and sale process, and file and confirm a Plan. To safeguard the integrity of those negotiations, DiScho designated Heiko Grebe and Christian Berghoff with authority to negotiate the DIP terms on its behalf.
  • The proposed DIP Facility constitutes below-market financing—reflected, among other things, in lower-than-customary interest rates and the absence of borrowing fees—and was determined to be the best and only postpetition financing alternative available to the Debtors given their acute liquidity need, cash and time constraints, and the circumstances of these Chapter 11 Cases.
  • The DIP Facility, together with continued use of Cash Collateral, will provide the liquidity necessary to stabilize operations, fund the administration of these Chapter 11 Cases, maintain stakeholder relationships, and permit the continued prosecution of the Counterclaims in tandem with the ongoing marketing and sale process for the Sublease. Absent the DIP Facility, the Debtors would face significant value-destructive consequences.