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Shipyard Firm Bankrupt After Failed SF Deal

Tuesday, April 24, 2018

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A Washington state-based shipyard owner has filed for bankruptcy in the wake of its failed purchase of San Francisco’s Pier 70 shipyard, as the Port of San Francisco begins seeking a new operator for the now-shuttered facility.

Puglia Engineering Inc., which bought Pier 70 from BAE Systems and then shut the shipyard down last May, filed for Chapter 11 in Washington April 13, a move management told the Bellingham Herald stemmed from the San Francisco deal and not from operations at its existing shipyards, and should not affect those facilities.

Pier 70
Port of San Francisco

After the botched sale of San Francisco's Pier 70 shipyard from BAE Systems to Puglia Engineering, 230 workers lost their jobs and Puglia filed for bankruptcy.

Puglia owns the Fairhaven Shipyard, in Bellingham, Washington, as well as a smaller facility in Tacoma.

The Pier 70 Deal

Puglia entered into an agreement to purchase Pier 70, the largest shipyard on the West Coast, in early 2017 for $1. The sale came with the understanding that Puglia would take on $38 million in pension liability that came with the facility, as well as the cost of repairs. But after the sale took place, Puglia sued BAE, claiming that BAE represented the two drydocks as fully operational when in fact it would take $21 million in repairs to get them in working order. BAE sued Puglia in return.

About 230 workers were laid off after Puglia took the reins at Pier 70.


Since the shutdown of the shipyard last May, the Port of San Francisco has been maintaining the facility so that another lessee can take over in the future and resume operation. The Port reached a $4.9 million settlement with BAE Systems and is no longer part of the ongoing litigation between Puglia and BAE.

The Port is undertaking some improvements, including the demolition of two structurally deficient buildings, which is underway now, and dredging that’s set to be complete by year’s end.

The Port currently has a request for proposals out for the operation of the shipyard; a previous RFP, which included more facilities and would have involved more repair costs, was superseded by the new RFP, issued April 13. Proposals are due July 20.


Tagged categories: Business matters; Lawsuits; NA; North America; Program/Project Management; Shipyards

Comment from peter gibson, (4/24/2018, 6:35 PM)

They should have inspected the dry docks before the sale. Obvious to everybody,but them.Ridiculous story.

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