End of the line as SeaFrance goes into 'total liquidation'

French cross-channel ferry service SeaFrance is bankrupt and will be “definitively liquidated”, a Paris court ruled on Monday despite a last minute offer by rival Eurotunnel to save the ailing firm.

The Tribunal de Commerce said that the proposed deal by a worker’s cooperative to take over the company, known in France as a SCOP, was “not viable”.

The decision affects some 880 workers directly employed by the firm, and a further 200 indirectly relying on SeaFrance for a living.

In pronouncing the firm’s liquidation, the court also turned down a request by the SCOP for more time to negotiate a package with the government and the firm’s parent company, national rail operator SNCF.

“There is not one single viable takeover offer and SeaFrance cannot continue its activity,” a judge told reporters. “The tribunal is hereby ending the period of support for SeaFrance.”

The court decision follows a late offer by SeaFrance competitor Eurotunnel to invest in the firm’s vessels, so that they could be rented to the SCOP to keep the business going.

There was no official response by the SCOP to Eurotunnel’s offer ahead of the court ruling, but the worker’s cooperative has been notorious for failing to accept any deals by outside investors to save the company, which had been in temporary liquidation since November 2011.

Ignominious collapse

The last days of SeaFrance have been far from glorious, with accusations that a branch of the CFDT union had effectively taken over the management of the firm and was running a “mafia-style” operation.

Among other allegations, the CFDT is reported to have hired unqualified members of a local football team, used intimidation against rival unions and the local press and been involved in a multimillion-euro scam involving duty-free alcohol and cigarettes.

The CFDT headquarters in Paris last week “disavowed” the relevant union branch, Maritime-Nord,  which in turn accused the union and the government of running a smear campaign to undermine the SCOP bid.

They also claimed that an eleventh-hour decision by French President Nicolas Sarkozy to support the SCOP was a cynical ploy to look like a workers’ champion ahead of this year’s presidential and parliamentary elections.

A loss of 240 million euros

There had been numerous attempts to save the company since ailing SeaFrance was put into receivership and shed 700 jobs in November 2010, having made a loss of 240 million euros.

In 2011, a SeaFrance management bid, backed by a 160-million-euro loan from the SNCF, was blocked by the European Commission on competition grounds.

And in November the CFDT rejected an offer by French shipping firm Louis Dreyfus Armateurs and Danish ferry company DFDS because the proposed bid meant slashing hundreds of jobs.

Instead, the SeaFrance CFDT touted their SCOP deal as the only way to save the company that was acceptable to the employees.

Under the plan the company’s workers would have financed a re-launch using their redundancy packages, boosted by an “exceptional” payment of some 60,000 euros each from the SNCF.

‘The dice were loaded’

The scheme had the support of the local authorities in Calais, as well as the backing of President Nicolas Sarkozy, who said on Monday January 2 that he was behind the bid.

Speaking outside the court on Monday, Didier Capelle, president of the CFDT Maritime Nord, accused the government of duplicity and of wanting to see SeaFrance declared bankrupt from the very beginning.

“We believe the dice were loaded from the start,” he told reporters. “We can legitimately ask if SeaFrance has been liquidated solely to benefit whichever shipping company can buy the company’s vessels.”

The government said that it would announce “solutions” by Tuesday that would look at ways of keeping SeaFrance ferries operating and keep the firm’s employees from destitution.

The SNCF has previously said that it would guarantee employment to any SeaFrance worker who was willing to relocate.