Hawaii Superferry has asked to abandon its two high-speed catamarans to creditors because of the significant cost of maintaining the vessels as the company moves through bankruptcy.

Superferry has told the U.S. Bankruptcy Court in Delaware that it cannot find financing to maintain operations while searching for charter opportunities. The company has no current source of revenue yet has to cover the cost of insurance, maintenance, security, storage and a skeleton crew for the catamarans at an Alabama shipyard owned by J.F. Lehman & Co., the project's main private investor.

The federal Maritime Administration, which guaranteed construction loans for the catamarans; Austal USA, the Alabama shipbuilder that built the vessels; and the state of Hawaii, which provided harbor improvements, are secured creditors with mortgage rights.

The Maritime Administration, which holds first priority on the mortgages and is owed $135.7 million, would likely take possession of the catamarans for charter if the bankruptcy court approves Superferry's request. Austal USA, which holds the second mortgage, announced last week that it is writing off the $22.9 million it is owed for construction loans.

A hearing on Superferry's request is set for July 1.

The state of Hawaii, meanwhile, has asked the bankruptcy court to move the proceedings from Delaware to Hawaii. An attorney for the state argues that a change of venue is necessary to protect the state's strong interest in the project — $40 million worth of harbor improvements — and for the justice and convenience of many local creditors.

Superferry is a Hawaii company but its parent, HSF Holding Inc., is a Delaware corporation.

"At their essence, these debtors (Superferry) are nothing more than the product of a public-private partnership to develop and operate a transit system solely within Hawaii," the state's attorney wrote. "Just as one would expect a regional transit authority to file its bankruptcy case in its own region, the same is expected of these cases."

The state's attorney cited the six-hour time difference and the 4,900 miles that separate Hawaii from Delaware. Nearly two-thirds of the Superferry's 30 largest unsecured creditors are also in Hawaii, the attorney argued, and have an interest in participating in the case.

STATE'S CASE

A significant issue in the bankruptcy case is Superferry's contention that it does not have to make payments toward the harbor improvements because an operating agreement with the state is void. The state Department of Transportation maintains that the operating agreement is still in effect.

The harbor improvements, which were financed by state bonds, are mostly vehicle ramps and barges designed specifically for the project. If Superferry does not pay the $40 million, then the state and other harbor users such as Matson Navigation Co. and Young Brothers would likely have to retire the debt over time.

Hawaiian Telcom Communications, the state's largest telephone company, initially filed for bankruptcy in Delaware last December but asked for and received a change of venue to Hawaii because of local concerns.

SHIPS DRAINING CASH

Superferry ceased operations in Hawaii in March after the state Supreme Court ruled that a state law that allowed Superferry to operate during an environmental review was unconstitutional special legislation written solely for the company. The court had ruled in August 2007 that the Lingle administration was in error when it exempted the project from environmental review.

Superferry filed for bankruptcy protection in May.

In its motion to abandon the two catamarans, the Alakai and the Huakai, Superferry argues that the vessels are now a burden. "It is unclear if there is any equity in the vessels given current market conditions and the debtors do not have sufficient liquidity at this time to maintain the vessels while waiting for market conditions to improve," attorneys for Superferry said.

A source close to Superferry said the two catamarans remain in excellent condition. The objective, the source said, is to charter the vessels for commercial or military use. If the company's request is approved, however, it would be up to the bankruptcy court, and likely the Maritime Administration, to determine the future of the catamarans.