Bankruptcy Keeps Lykes Afloat
The Lykes Bros. Steamship Company traces its roots to the Civil War, when Dr. Howell T. Lykes collected and delivered cattle to confederate soldiers in Florida. In 1900, the seven sons of Dr. Lykes started a shipping business to ship cattle to Cuba.
Over time, the company grew—becoming the largest carrier in the world by the end of World War II—with container ships working the trade lanes of the United States, Northern Europe, the United Kingdom, the Mediterranean, Mexico, and Africa. The company was a major military carrier for the United States during World War II, the Korean War, the Vietnam War, and the Gulf War.
Reorganization
In 1995, Lykes Bros. Steamship Company filed for bankruptcy law protection under chapter 11 of the United States Bankruptcy Code, which allows a company to continue operating while it works out a plan to repay creditors.
“At the time of the bankruptcy filing, Lykes had ships at sea and in ports throughout the world. No such shipping company had ever been able to successfully continue worldwide operations under the protections of a bankruptcy court.”
—Harley Riedel, lead lawyer, Lykes' bankruptcy case
Lykes Bros. Steamship Company ships
To meet this challenge, Lykes requested and obtained from Bankruptcy Judge Alexander L. Paskay a worldwide injunction prohibiting any interference with its vessels. Judge Paskay also ruled that four large, modern container ships, which were technically owned by a third party, could continue to be used for North Atlantic trade. Without these vessels and the judge’s injunction, Lykes could not have maintained its operations and successfully reorganized.
The operations of the Lykes Bros. Steamship Company continued during the bankruptcy case. Seventeen months after the chapter 11 filing, the company had reorganized, selling the business to CP Ships. Reorganization resulted in CP Ships maintaining offices in Tampa and continuing to employ hundreds of people here and many more around the world.