Fast ferry engine builder wants to move lawsuit to federal bankruptcy court

The state’s lawsuit against builders of the fast ferries took another unexpected turn on Wednesday.

The German-builder of the ferry’s engines submitted a last-minute motion to remove the entire case to federal bankruptcy court. That would effectively take the entire lawsuit, at least temporarily, out of the hands of state Superior Court Judge Philip Pallenberg.

The Alaska Marine Highway System believes that the engines for the fast ferries Fairweather and Chenega are defective. But the vessel’s builders, Derecktor Shipyard of Connecticut, filed for bankruptcy protection in January. For now, they are not a defendant in the state’s lawsuit. But the case can still proceed against the German company that built the ferries’ engines, MTU Friedrichshafen, and the U.S. company that has done maintenance, MTU Detroit Diesel.

Attorneys for the state and ferry system were not happy about the surprise filing. Judge Pallenberg even considered that such a motion by a non-debtor could constitute a willful violation of the automatic stay in the state case.

Wednesday afternoon’s hearing was originally planned to compel engine builder MTU to produce witnesses for planned depositions for an upcoming trial. State attorneys believe that MTU is purposely hindering the pre-trial process by releasing witnesses or making them unavailable. MTU says that’s not the case.

All the parties hope to review the law before the hearing is continued on Thursday morning. Meanwhile, Judge Pallenberg warned MTU to “release witnesses (from depositions) at its own peril.”

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