Companies
Zachry Gains Court Approval for New Plan to Exit Ch. 11 by March 31
Construction cost dispute between former lead contractor Zachry Holdings Inc. and owners of Golden Pass LNG export terminal in Texas prompted the company's bankruptcy filing last year.
Photo: Golden Pass LNG
San Antonio-based contractor Zachry Holdings Inc. said Jan. 24 it has received approval of the U.S. bankruptcy court in Texas to seek key creditor support for the firm and 20 subsidiaries to exit Chapter 11 status by March 31, according to a new court filing.
The company's bankruptcy filing last May stemmed from a major cost dispute with owners of the Golden Pass LNG export terminal construction project near Port Arthur, Texas, of which it was lead contractor under a fixed-price contract. Efforts to renegotiate terms were unsuccessful, and a Zachry unit left the project last summer as part of the bankruptcy.
Former partners Chiyoda International Corp. and McDermott International have been executing project completion since then, with estimated cost now at $11.6 billion. About 1,700 claims totaling over $23 billion have been submitted in the bankruptcy, with a number of claims still in dispute, according to the filing.
“We are pleased to have filed the revised plan with full support from our senior lenders and the official committee of general unsecured creditors,” Zachry said in a statement. The creditor voting deadline is Feb. 20 and a court hearing on the plan is set for Feb. 26..
Zachry also agreed last year to pay $7 million to settle a class-action lawsuit by former employees who claimed the firm failed to follow federal law in its layoffs while exiting the project.
Golden Pass owners ExxonMobil and QatarEnergy last year requested federal approval to extend the project’s completion to 2029, but they expect first gas production by the end of 2025.
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