Commitments and Contingencies

3 Months Ended

Mar. 31, 2021

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

9. COMMITMENTS AND CONTINGENCIES

As of March 31, 2021, the Company’s unfunded capital commitments were $10.1 million for one PSV and miscellaneous vessel equipment. Of the amount of unfunded capital commitments, $9.2 million is payable during the remainder of 2021 and $0.9 million is payable during 2022. The Company has indefinitely deferred an additional $9.5 million of orders with respect to one FSV that the Company had previously reported in unfunded capital commitments. 

In December 2015, the Brazilian Federal Revenue Office issued a tax-deficiency notice to Seabulk Offshore do Brasil Ltda, an indirect wholly-owned subsidiary of SEACOR Marine (“Seabulk Offshore do Brasil”), with respect to certain profit participation contributions (also known as “PIS”) and social security financing contributions (also known as “COFINS”) requirements alleged to be due from Seabulk Offshore do Brasil (“Deficiency Notice”) in respect of the period of January 2011 until December 2012. In January 2016, the Company administratively appealed the Deficiency Notice on the basis that, among other arguments, (i) such contributions were not applicable in the circumstances of a 70%/30% cost allocation structure, and (ii) the tax inspector had incorrectly determined that values received from outside of Brazil could not be classified as expense refunds. The initial appeal was dismissed by the Brazilian Federal Revenue Office and the Company appealed such dismissal and is currently awaiting an administrative trial. Recently, a local Brazilian law was enacted that supports the Company’s position that such contribution requirements are not applicable, but it is uncertain whether such law will be taken into consideration with respect to administrative proceedings commenced prior to the enactment of the law. Accordingly, the success of Seabulk Offshore do Brasil in the administrative proceedings cannot be assured and the matter may need to be addressed through judicial court proceedings. The potential levy arising from the Deficiency Notice is R$18.35 million based on a historical potential levy of R$12.87 million (USD $3.2 million and USD $2.2 million, respectively, based on the exchange rate as of March 31, 2021). 

As of March 31, 2021, SEACOR Holdings has guaranteed $4.8 million on behalf of the Company for performance obligations under sale-leaseback arrangements. Pursuant to a Distribution Agreement entered time with SEACOR Holdings at the time of the Spin-Off, SEACOR Holdings charges the Company a fee of 0.5% per annum on outstanding guaranteed amounts which declines as the obligations are settled by the Company.

On April 13, 2021, the SEACOR Power, a liftboat owned by a subsidiary of the Company with nineteen individuals on board, capsized off the coast of Port Fourchon, Louisiana. The incident resulted in the death of several crew members, including the captain of the vessel, and several crew members remain missing. The accident also resulted in the constructive total loss of the SEACOR Power. The Company is responsible for the salvage operations related to the vessel and must coordinate with the U.S. Coast Guard in connection with the removal of the vessel, including the safe removal of fuel and oil, from the water.

The capsizing of the SEACOR Power has garnered significant attention from the media as well as local, state and federal politicians. The National Transportation Safety Board (“NTSB”) and the U.S. Coast Guard are currently investigating the incident to determine the cause of the accident and the Company is fully cooperating with the investigation in all respects and continues to gather information about the incident. It is expected that the joint NTSB and U.S. Coast Guard investigation will take a significant period of time to complete, possibly as long as two years or longer. Several civil lawsuits have also been filed against the Company and other third parties by the family members of deceased crew members employed by the Company or by the third parties.  There is significant uncertainty in the amount and timing of costs and potential liabilities relating to the accident involving the SEACOR Power, the impact the incident will have on the Company’s reputation and the resulting possible impact on the Company’s business.

In the normal course of its business, the Company becomes involved in various other litigation matters including, among others, claims by third parties for alleged property damages and personal injuries. Management has used estimates in determining the Company’s potential exposure to these matters and has recorded reserves in its financial statements related thereto where appropriate. It is possible that a change in the Company’s estimates of that exposure could occur, but the Company does not expect such changes in estimated costs would have a material effect on the Company’s consolidated financial position, results of operations or cash flows.