Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, November 5, 1993 TAG: 9311050109
SECTION: SPORTS PAGE: B-9 EDITION: METRO
SOURCE: Associated Press
DATELINE: TAMPA, FLA. LENGTH: Medium
The century-old American Ship Building Co. filed for reorganization in U.S. Bankruptcy Court. Steinbrenner owns 11 percent of the company.
American Ship Building was damaged in August when the U.S. Navy canceled a $176 million contract to build two oil tankers. On Monday the Navy said it may cancel a $63 million contract for a submarine-hunting vessel, the company's only remaining contract.
Steinbrenner could not be reached for comment. It is unclear if the bankruptcy filing will have any effect on the New York Yankees, a partnership in which Steinbrenner and his family control 55 percent of the shares.
American Ship Building was down 3-16 in trading on the New York Stock Exchange and closed at 1/2.
Tom Denham, a spokesman for American Ship Building, said Steinbrenner's investment in the company is less than 2 percent of his net worth. Steinbrenner was not at the news conference called to announce the filing. Denham said he was in Tampa, but tied up with other business.
"George Steinbrenner and the company were dragged to this position as an absolute last resort," said Bob Banker, a lawyer for Steinbrenner.
The Navy said it was concerned over the company's finances and performance. Although Steinbrenner has often cited his acumen at running the company, baseball officials have said the company has borrowed heavily from the Yankees in recent years.
American Ship Building has contested the August termination of the oil-tanker contract. Navy Secretary John Dalton said last week he will not reverse the cancellations.
"It is becoming more and more evident through reports we are getting that the Navy has no use for these vessels and does not want these vessels," Steinbrenner said in a statement.
Company lawyers said the firm will try to get the contracts restored in bankruptcy court.
"Our goal is to come out of this bankruptcy with these ships," Banker said. "Our goal is to keep the yard running."
Steinbrenner's lawyers said he personally offered to put up $11 million of his own money to keep the oiler contracts and prevent 1,000 layoffs at the shipyard.
by CNB