Major U.S. military vendor files unexpected Chapter 11 bankruptcy

Times of war generally benefit military contractors.

"Global arms revenues rose sharply in 2024, as demand was boosted by the wars in Ukraine and Gaza, global and regional geopolitical tensions, and ever-higher military expenditure. For the first time since 2018, all five of the largest arms companies increased their arms revenues," according to data from the Stockholm International Peace Research Institute (SIPRI).

With numerous conflicts around the world, many companies that sell to various militaries have done well.

"Last year global arms revenues reached the highest level ever recorded by SIPRI as producers capitalized on high demand," said Lorenzo Scarazzato, Researcher with the SIPRI Military Expenditure and Arms Production Programme. "Although companies have been building their production capacity, they still face a range of challenges that could affect costs and delivery schedules."

Not every military vendor has done well, however, as Swiftships, LLC, a Louisiana-based shipbuilding company that designs and constructs military and commercial vessels, filed for Chapter 11 protection on Mar. 18 in the U.S. Bankruptcy Court for the Western District of Louisiana.

Swiftships files Chapter 11 bankruptcy

Swiftships serves the U.S. military, which has been steadily increasing its military spending, according to SIPRI data.

"Military spending by the USA rose by 5.7% to reach $997 billion, which was 66% of total NATO spending and 37% of world military spending in 2024. A significant portion of the US budget for 2024 was dedicated to modernizing military capabilities and the US nuclear arsenal in order to maintain a strategic advantage over Russia and China," SIPRI shared.

Despite that, or perhaps because of the nature of the specific spending, Swiftships ran into financial stress and filed for Chapter 11 bankruptcy protection.

Swiftships Chapter 11 bankruptcy quick facts:

• Debtor: Swiftships, LLC (Morgan City, Louisiana-based shipbuilder), according to Bondoro.
• Chapter 11 filing date: March 18, 2026, as reported by Bankruptcy Observer.
• Court: U.S. Bankruptcy Court for the Western District of Louisiana, according to Bankruptcy Observer.
  Case number: 26-50237
  Filing type: Voluntary Chapter 11 (reorganization)
  Assets and liabilities: Both estimated at $10 million to $50 million, according to Bondoro.
• Business description: Designs and builds military and commercial vessels, according to Bondoro.

Swiftships lost a key contract

In 2024, the United States Navy ended a key $18 million contract with Swiftships.

"The U.S. Navy has ordered the builder of its Landing Craft Utility 1700 program to stop work and moved to terminate the contract, following years of challenges and disagreements on the program, the shipbuilder Swiftships told Defense News.

The LCU was a significant source of revenue for Swiftships.

"Swiftships won the LCU competition in March 2018, with the Navy awarding a contract for $18 million for the detailed design and the construction of the first craft. The yard also received follow-on contracts, one in 2019 worth $26.7 million for the next two craft, and another in 2020 worth $50.1 million for four more," Defense News added.

The company sued the U.S. Navy in March, 2024, according to documents filed on Justia.

Swiftships "said the Navy ended the deal in bad faith and sued seeking $150 million," Law360 reported.

The company "accused the U.S. Navy of doing everything it could to thwart the company's success on a craft-building deal," according to the legal website.

Swiftships’ contract called for options to build as many as 32 — the total number of craft needed to replace the Navy’s Vietnam-era LCU inventory.

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