March 25 - As reported in our last Friday Flyer, Fort Lauderdale, Florida, US headquartered Yacht Path, and three associated companies, has voluntarily initiated proceedings under Chapter 11 of the US Bankruptcy Code.
"The decision to file for Chapter 11 was not easy, nor was it entered into lightly. It, unfortunately, was necessary due to an adverse ruling in a lawsuit that eventually resulted in a writ of garnishment being placed on Yacht Path's bank accounts, restricting our access to the funds necessary to pay the company's bills," explained Yacht Path president, Dennis Cummings.
He went on: "Subsequently, certain parties, through their legal counsel, threatened to initiate lawsuits and/or an involuntary bankruptcy against Yacht Path. Without access to capital, and with the threat of an involuntary bankruptcy hanging over us, we had no choice but to seek protection under Chapter 11."
Yacht Path is seeking relief from the bankruptcy court that will allow it to continue to provide services to its customers, including any currently booked services.
The three related companies that have also filed for Chapter 11 include Unity Shipping Lines, Unity Marine and Yacht Path Palm Beach. Unity Shipping transports heavy marine equipment and cargo.
Robert D McIntosh of McIntosh Schwartz P.L.- a Florida headquartered attorney at law - commented: "I have also received a copy of a State garnishment in Palm Beach County against Yacht Path's bank account with the Bank of America. The garnishment was based upon a New York judgement that was unpaid."
With the freezing of Yacht Transport's operating account it became unable to honour its contracts.
Cummings stressed that the company was not going out of business: "This course of action will enable us to make significant improvements to Yacht Path's operations. We aim to be a more streamlined, efficient and focused company upon emerging from this process."