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Waving goodbye to the FastShip

Plowing across the Atlantic in just three days, FastShip Inc. was supposed to revive Philadelphia industry and shipping.

FastShip chief Roland K. Bullard 2d with a model of one of his company's proposed cargo vessels.
FastShip chief Roland K. Bullard 2d with a model of one of his company's proposed cargo vessels.Read more

Plowing across the Atlantic in just three days, FastShip Inc. was supposed to revive Philadelphia industry and shipping.

Then-U.S. Sens.Rick Santorum and Arlen Specter, in their moderate-Republican days, got a $40 million pledge from the federal Treasury. Former State Sen. Vincent J. Fumo (D., Phila.), in his pre-penitentiary days, got the Delaware River Port Authority to promise $75 million.

A lot of the best-connected people in Philadelphia - the Dorrances (with their Campbell Soup money), the Wood-du Ponts (Wawa, DuPont), the Haases (Rohm & Haas), and dozens more - bought shares in hopes of profits. Lawyers (Blank Rome L.P.) and lobbyists such as ex-U.S. Rep. Bud Shuster (R., Pa.) primed the pump.

Too bad FastShip Inc. was so much more successful at raising money than at executing its plan to build terminals and ships that would carry freight from South Philly to the English Channel in just three days.

The company's bankruptcy filing in Wilmington last week listed one final hope that those investors will ever see their money: a patent lawsuit. Against the U.S. Navy.

"It's a creative use of Chapter 11 to preserve our creditors and fund the litigation," FastShip chief Roland K. Bullard 2d told me.

FastShip and its backers spent most of 20 years trying to raise $2 billion for four transatlantic ships and port cargo systems that would be so fast and cheap "the resulting service would be comparable to airfreight at half the cost," the company said in its bankruptcy filing.

In the mid-1990s, FastShip raised its first $10 million - $7 million from the Delaware River Port Authority, the rest from members of the Holt family, who operate port terminals on the river. From 1998-2008, according to the bankruptcy filing, FastShip "came close to raising the necessary capital to launch the business plan on three occasions." That included the federal pledge to finance a special Philadelphia cargo terminal - never built - and the Port Authority financing, only a slice of which was delivered, according to spokesman Tim Ireland.

Despite the pledges, FastShip was never able "to close on the required financing because of political and market setbacks" capped by "deal fatigue and the collapse of the global economy" in the 2008 credit crisis, according to the bankruptcy filing.

Bullard's last hope is the prospective lawsuit. According to the filings, some of the Navy's new littoral combat ships, such as the Freedom, built by Lockheed Martin (an early FastShip supporter) in a Wisconsin shipyard, use a design that infringes on patents controlled by a FastShip affiliate. By reorganizing the company, Bullard hopes to raise money from new investors to sue the Navy and pay FastShip's most outstanding debts.

FastShip owes $9 million to unsecured creditors, including $4.5 million to Blank Rome and a predecessor firm, Dyer Ellis & Joseph of Washington, as well as $765,000 to Citizens Bank owner Royal Bank of Scotland and $654,000 to Shuster's lobbying firm, Strategic Advisors Ltd., among others.

Total investments, by class, in descending order of likely repayment:

• $30 million to lenders secured by FastShip's "intellectual property," including $3.5 million to the Delaware River Port Authority, and others who were not named in the initial legal filings.

• $7 million to DRPA, as a preferred-equity investor.

• An unreported total, to more than 100 common shareholders from across the United States, Europe, and Britain.

Germantown rising

Citibank hopes to expand its "lending center" at developer Pat Burns' Chelten Plaza Shopping Center, which opens Tuesday, into a full-service bank branch "by the end of the year, if all goes well," says Don Haskin, the long-ago Germantown High School grad (and ex-Daily News reporter) who heads Citi's local "community development" office.

Citi will concentrate on home loans, including a low-interest, low-down-payment program partly guaranteed by the city Redevelopment Authority. Didn't cheap mortgages help cause our current housing mess? These will go to people with good credit (if little cash), "not subprime" borrowers, Haskin says.

Contact Joseph N. DiStefano at 215-854-5194,, or follow @PhillyJoeD on Twitter.