Gulf Island Fabrication, a prominent steel fabricator, saw a surge in its shares by 13% to $3.70 following the resolution of a lawsuit involving its subsidiary and Hornbeck Offshore Services. The lawsuit was centered around the construction of two multi-purpose supply vessels.
The court dismissed the lawsuit after both parties involved reached a mutual agreement for resolution. Gulf Island Shipyards, the subsidiary of Gulf Island Fabrication, successfully settled the lawsuit with Hornbeck.
In a significant development, Gulf Island, together with its subsidiary Fidelity & Deposit Co. of Maryland and Zurich American Insurance, the issuer of performance bonds for the multi-purpose supply vessel contracts, entered into a binding term sheet to settle the obligations under the performance bonds and any related indemnity agreements. To fulfill these obligations, Gulf Island will pay Zurich $20 million, along with interest, through 15 equal installments starting from Dec. 31, 2024.
Richard Heo, the Chief Executive of Gulf Island, expressed his satisfaction with the resolution and emphasized that it will allow the company to devote its full attention to business growth without any distractions.
By Denny Jacob