An expensive ongoing litigation has forced rig service provider Bergen Group Hanøytangen to declare bankruptcy in Norway.
The petition is being filed with the Nordhordland Tingrett county court in Bergen today, parent company Bergen Group said in an exchange filing.
“The company has over time experienced a strained liquidity situation due to the ongoing dispute over the final settlement of the rig project Borgland Dolphin, completed in Q1 2015,” the statement said.
“The board of directors of the company, together with its external and internal advisors, has made substantial efforts with the aim of reaching a stand-still agreement with the company’s creditors, pending the final settlement from the Borgland Dolphin project.”
However, some of the Bergen subsidiary’s creditors oppose the stand-still agreement, making it unlikely Bergen Group Hanøytangen will settle out of court with the parties or file for debt settlement proceedings, according to the filing.
On August 28, Bergen Group submitted an arbitrary subpoena against Borgland Dolphin to claim unpaid fees from the rig project. According to Bergen Group’s second-quarter financial report 2015, the subsidiary did not receive final payment for the semi-submersible drilling rig’s extended stay at its Askøy yard, near Bergen, between October 2014 and the end of February 2015.
Bergen Group Hanøytangen has filed a claim for NOK 190m ($22.9m) in compensation for the extension of the rig project and the work conducted, which comprised upgrades and a five-year class renewal survey for the drilling rig.
The arbitration court will not process the dispute until the second quarter 2016, Bergen Group said.