Gulf Island Fabrication Resolves Lawsuit and Settles Obligations, Strengthening Financial Position
Gulf Island Fabrication, a leading steel fabricator and service provider to the industrial and energy sectors, has announced the resolution of a lawsuit with Hornbeck Offshore Services. The lawsuit was related to the construction of two multi-purpose supply vessels. Gulf Island’s subsidiary, Gulf Island Shipyards, has reached a settlement with Hornbeck, resulting in the dismissal of the lawsuit.
As part of the resolution, Gulf Island, Gulf Island Shipyards, Fidelity & Deposit Company of Maryland, and Zurich American Insurance Company have entered into a binding term sheet. This term sheet outlines the settlement of Gulf Island’s obligations under the performance bonds and any indemnity agreements related to the MPSV contracts. Gulf Island will make payments to Zurich totaling $20.0 million, plus interest, over a period of fifteen years, starting from December 31, 2024. In addition, Gulf Island and Gulf Island Shipyards will release possession of the MPSVs to Zurich.
Richard Heo, Gulf Island’s President and Chief Executive Officer, expressed his satisfaction with the resolution, stating that it is in the best interest of all stakeholders. Heo emphasized that the settlement eliminates ongoing legal and vessel holding costs, reduces uncertainty, and mitigates the risk of an adverse outcome from a potential jury trial. The agreement with Zurich for payments over fifteen years will also contribute to Gulf Island’s strong financial position and provide sufficient liquidity to pursue strategic objectives. Heo concluded by highlighting that the resolution allows the company to focus on profitable growth, following the completion of the wind-down of its shipyard operations.
Gulf Island is a leading fabricator of complex steel structures and modules, offering a range of specialty services to the industrial and energy sectors. Its customers include energy producers, refining and petrochemical companies, LNG operators, and EPC companies. The company is headquartered in The Woodlands, Texas, with primary operating facilities located in Houma, Louisiana.
With this resolution, Gulf Island Fabrication can move forward with renewed focus and financial stability, positioning itself for continued success in the industrial and energy sectors.