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Shipyard looks to rebound by April
FREELAND Nichols Brothers Boat Builders Inc. expects to rehire more than a 100 employees by mid-April in the face of a full work load of construction projects.
By the end of March, were going to be up to 100 folks. By the middle to end of April, well go up to 130 to 140, somewhere in there, Nichols CEO Len York said Thursday as the shipyard launched its latest project, extensive repairs to a custom fishing boat.
York, the new CEO for Nichols, was named to replace Matt Nichols, the shipyards former chief executive officer.
We are gradually bringing people back because we have a couple of projects that really kick off in the middle of March, York said. We just dont want to bring people back and not have work for them.
Nichols Brothers has contracted with Baydelta Maritime to build two more tugs, identical to the first two they built, York said.
York also attributes the work the yard is getting to its financial health.
We are absolutely in a strong financial position. We are moving ahead with all the projects that we have on the books, he said.
And were going after some fairly large and good projects that I cant really talk about because they are business that we expect to get but have not gotten yet, York added.
One of those projects includes a potential contract with Todd Pacific Shipyard to build new ferries for the state. Governor Chris Gregoire signed a bill earlier this week approving the construction of three new ferries for the Keystone-Port Townsend route.
All I can say about the Washington state ferry project is that yes, were talking to Todd Pacific Shipyard, which will be the prime contractor there, York said. The bid process hasnt even started on that yet. We have to get information from the state to start the bidding and we intend to participate in that.
York was named CEO of the embattled shipyard Tuesday evening.
Both Matt and Bryan Nichols have moved to new positions within the company, York said.
Bryan Nichols will be the vice president of sales and marketing. Matt Nichols is going to be a managing director of the company and really focused on sales more than anything, York said. They both will be jointly running the sales organization. They will not be involved with the operations but bringing in more contracts.
Both Nichols will also serve as observers on a newly-appointed seven-member board of directors, which includes three members from Treadstone Partners LLC., an investment company that funds financially-burdened businesses and helped buy the shipyard when it went into bankruptcy proceedings in November.
York will also serve on the board, along with Mitch Usibelli, a member of the family that was a primary purchaser in the shipyards sale.
The management changes at the Freeland shipyard follow the completion of the companys sale to Ice Floe. The sale was finalized in U.S. Bankruptcy Court Western District of Washington on Wednesday.
The sale removes another hurdle in the bankruptcy case for Nichols Brothers and clears the way for creditors to get their money, the companys bankruptcy attorney said.
But before that can happen, some assets still need to be sold.
The bankruptcy will be focusing on the assets left to sell, said attorney Marc Barreca.
One vessel, a tugboat, is about to be sold. Court orders are being presented to sell it. We still need to sell another tugboat under construction. Were in negotiations with the party (Minette Bay) it was under contract to be built for.
Barreca anticipated that the pay-out process could take up to a year.
Once we have what money we will have to distribute to creditors, we will propose a plan to distribute that money to creditors. That plan will also set forth a process resolving any issues about claims and allowing claims, he said.
I would say this process would take a year and this is because once you get rid of the assets and you just have litigation going on, or court procedures going on regarding establishing the claims, sometimes that process can take a while, he said.
While the Nichols case was typical for Barreca in many ways, there was a unique aspect to it for him as well, he said.
It has had some interesting legal issues in it such as dealing with the kinds of liens that state law provides for parties that supply boat builders is different in a boatyard case, he said. And there arent that many shipyard bankruptcies locally.
The new Nichols Brothers Boat Builders Inc. has continued to call back workers since the shipyards unexpected layoffs in early November. Company officials said they have 70 workers in place.
On Thursday afternoon, the shipyard closed East Shoreview Avenue for the launch of the fishing boat Carley Renee, which workers have been repairing in the yard since December.
Nichols Brothers shut down and laid off nearly 200 workers in early November. The company filed for bankruptcy less than two weeks later.
On Jan. 28, the bankruptcy court auctioned Nichols Brothers to Ice Floe for more than $9 million. The funds will be used to pay off most of the bankrupt companys creditors.
Treadstone officials saw a good investment in Nichols Brothers.
Michael Donohoe, an investment officer for Treadstone Capital Management LP., is the chairman of the board for Nichols Brothers.
Mark Barbeau of CRG Partners Group LLC. and I came up and visited the yard in late December, said Donohoe. We saw potential. We saw the history of what they had done and the potential of what they could do. We made an independent financial assessment and we viewed this as a good investment for our private investment firm.
Treadstone now owns a majority share in Ice Floe while Joseph Usibelli owns a minority share, Donohoe said.
Nichols Brothers is only one of the latest investments in a large portfolio of small home-town $100 million plus businesses, Donohoe said.
Since 1993, Treadstone has made well over 200 investments in companies and assets, he said. We believe we have a very strong track record.
For York, the workers are the most important asset to Ice Floe.
This company has a very talented group of people. That is why we bought this company, York said.
Not because of the used equipment that the company had. This is one of, if not the highest quality boat builder in the United States. And its going to get back on track. These employees are doing a great job, he said.
York also indicated that employees who participated in retirement plans prior to Ice Floes ownership would continue to be covered.
The morale here is higher than its been in a long, long time because there are no more financial problems, York said. People are feeling much more secure about where they are today than where they were. We certainly intend to be a very good corporate citizen of the South End of Whidbey Island.
We recognize there is a responsibility to this community associated with being the owner of Nichols Brothers, he said. And we plan to carry on the legacy and stewardship that Matt and Bryan Nichols made here. We really mean that.
Spencer Webster can be reached at 221-5300 or email@example.com.