NEW ORLEANS (CN) – Torch Inc. claims national financial firms Bridge Associates LLC and Raymond James and Associates have reduced its $90 million ownership interest in Torch Offshore to nothing.
Torch says it hired Bridge Associates and Raymond James to raise capital and restructure Torch Offshore’s debt. According to the federal lawsuit, weak “market conditions in the oil and gas industry depressed market prices for Torch Offshore Inc.’s services and adversely impacted the company’s gross margins.”
But rather than work in Torch’s best interest, to give it an “opportunity to return to financial profitability with a strong chance of fully honoring all its commitments to creditors,” Bridge Associates LLC and Raymond James and Associates “placed themselves in a position to earn millions of dollars in fees,” the lawsuit states.
Torch says it made a written agreement with a third party that would bring in substantial revenue. But soon after the agreement was made, representatives from Bridge Associates and Raymond James held a private meeting with the third party and made false assertions that Torch would no longer consider chartering its vessel and would only consider a bankruptcy administered sale, the complaint states. The goal of the defendants’ private meeting, Torch says, was to increase the fees they would earn from a bankruptcy.
Torch says that when it got the news that the third party was unwilling to buy the vessel, Torch Offshore’s “board of directors believed they had no recourse but to file for protection under bankruptcy laws.”
Despite the bankruptcy, the third party did not buy the vessel and it was sold along with the rest of Torch Offshore’s assets in a fire sale, the complaint states. As a result, Torch’s $90 million interest in Torch Offshore was reduced to zero.
The suit seeks repayment of then-current earnings, divestiture of the ownership interest in Torch Offshore as a result of the bankruptcy proceedings, loss of stock earnings and loss of investment value.
Torch Inc. is represented by James Bolner Jr. with Berrigan, Litchfield, Schonekas.