Maritime Transactions, Bankruptcies and Workouts and Maritime Port Development
Full Scope of Transactional Work
As transportation industry transactions become more varied and complex, maritime attorneys who fully understand your industry - and the related technical, finance, tax, environmental and other implications involved - are necessary.
Holland & Knight Vessel Finance attorneys have handled a variety of matters for clients, including:
Recent Highlights
Corporate Acquisition Financing
A recent example of one of our maritime financing transactions is the structuring and documentation of a $1.4 billion senior secured credit facility. Holland & Knight represented Nordea Bank Finland Plc, London branch, as administrative agent, and a group of eight financial institutions as initial lenders, including Nordea, DVB Bank, Deutsche Bank, GECC and HSH Nordbank as lead arrangers. The borrower was Excel Maritime Carriers Ltd., a NYSE-listed Liberian corporation.
Proceeds of the loan were used to finance the acquisition by Excel of NASDAQ-listed Quintana Maritime Limited, a Marshall Islands corporation. The combined entity, with executive offices in Greece, is one of the largest international bulk ship owners. Thirty-eight vessels were part of the collateral package. In addition to New York law, which was the governing law of the loan and most of the security documents, the transaction involved the laws of the Marshall Islands, Liberia, Panama, Cyprus, the Bahamas, Malta and England – and extensive coordination.
Holland & Knight began work in December 2007 to negotiate a fully-underwritten bank financing commitment by year-end, allowing Excel to become the successful bidder for Quintana. With the underwritten commitment in place, Excel was able to execute the acquisition agreement with Quintana, and the transaction closed in the second quarter of 2008.
Oil Trading
We advised a financial institution respecting U.S. federal and state laws relating to oil trading, ownership, transportation by pipeline, marine, road and rail, and storage issues, including U.S. commodities trading regulatory and contractual issues and a complete environmental review.
Risk Assessment
We have advised major financial clients of the full scope of risks involved in the investment in maritime assets either directly or through corporate acquisitions or investments. These analyses have required, inter alia, consideration of risks to the investor from the time of vessel construction through operation to its scrapping decades later. Such projects require the sophisticated consideration of a number of legal and non-legal disciplines all of which our attorneys have lead and coordinated, always taking into account the unique aspect of our clients' businesses, whether in the context of corporate structure or concern for the "headline" impact.
U.S. and International Reach
Your legal advisors must be seasoned in guiding the finance and operation of vessels under the U.S. flag, as well as the flags of other maritime jurisdictions. Highly experienced Holland & Knight partners practicing in finance are located on all U.S. coasts – East, Gulf and West – as well as in Mexico City, to assist you in maritime transaction matters.
Additionally, our Washington, D.C., lawyers have been active in representing client interests in connection with Coast Guard, Homeland Security and Maritime Administration regulations and legislation. Our Mexico City attorneys have provided extensive advice on ship mortgages and other vessel financing structures relating to Mexican flag vessels.
Other areas of experience include:
- structuring transactions to accommodate U.S. and foreign tax laws and negotiating lease-related tax indemnity agreements
- structuring investments and transactions to comply with the U.S. Jones Act
- providing guidance as special Liberian, Marshall Islands and Vanuatu counsel in transactions and issuing legal opinions with respect to the corporate and shipping laws of those nations
- working with underwriters and issuers to raise funds through the public debt and equity capital markets
- working with private equity funds as investors and lenders
- working with U.S. government programs, including the Title XI, Capital Construction Funds, VISA and other programs
- handling matters of lender/lessor liability, both in the context of restructurings and OPA-90
Representative Matters
Corporate Maritime Transactions
- counsel to the lenders in the $1.4 billion loan to Excel Maritime Carriers Ltd. in connection with Excel's acquisition of Quintana Maritime Ltd.
- special maritime counsel to K-Sea Transportation Partners L.P. (NYSE: KSP) in its IPO and follow-on equity offerings
- special maritime counsel to U.S. Shipping Partners L.P. (NYSE: USS) in its IPO
- special maritime counsel to Canadian National Railway in connection with its acquisition of Great Lakes Transportation
- special maritime counsel to CSX Corp./SeaLand in connection with CSX's original 1999 transaction and 2005 modifications respecting the sale by CSX of its international container shipping business (SeaLand)
- special maritime counsel to CSX Corp. in connection with the sale of CSX Lines LLC (renamed Horizon Lines LLC) to the Carlyle Group
- counsel to Carnival Cruise Lines in connection with its unsecured credit line
- special global maritime counsel to Mobil in the Exxon Mobil merger resulting in ExxonMobil
- special maritime and aviation counsel to Citicorp/Citibank in the Citicorp/Travelers merger resulting in Citigroup
- special maritime counsel to the acquiror of a scrap metals business involving the sale and leaseback of U.S. Jones Act assets
- counsel to an international bank providing acquisition financing to a strategic investor bidding in the spin-off by a public utility of its marine transportation and terminal business
- counsel for the lead bank in a secured syndicated loan transaction providing the "going private" financing for a U.S. public company
- advising non-U.S. entities in connection with the purchase and sale of shares of stock exchange listed U.S. Jones Act shipowners
- counsel to a non-U.S. investment fund in connection with its investment in a U.S. Jones Act shipowner
- advising a major international shipping company in a prospective hostile tender of the shares of a U.S.-listed international shipping company
- advising a major international financial institution as underwriter of a high-yield debt offering for a foreign-based international shipping company
- advising an international shipowner on the defeasance of its secured public bond.
- counsel to a U.S.-based equity fund in connection with setting up a shipping joint venture with a non-U.S.-based shipowner/operator
- counsel to a non-U.S.-based shipowner in connection with establishing a joint venture with U.S.-based shipowner respecting a ro-ro vessel transferred to U.S. flag
- advising a U.S. financial institution of risks and structural mitigation respecting joint ventures and corporate investments in shipowners/operators
- advising a bidder respecting purchase of a high-end leisure cruise entity including U.S. Jones Act advice
- advising a potential purchaser of a U.S. tourist excursion shipowner including U.S. Jones Act advice
- advising an international shipowner in connection with its ownership structure to reflect the passing of the business to the second generation
- counsel to an AMEX-listed Liberian shipowner respecting Liberian corporate issues
Maritime Port Development, Financing and Privatization Transactions
- advising clients on contracting, development, construction financing and leasing for several cruise terminals
- representing a cruise line in financing the major cruise ship repair and drydock facility in Grand Bahama in 2002, the largest in the Western Hemisphere
- representing multiple clients on marine terminal acquisitions and sales, including one in New York City, one involving a cement terminal in South Carolina, and several in Latin America
- representing a party in connection with the financing for a port privatization development in Cape Verde
- representing the World Bank in developing its port privatization "toolkit" set of documents in 2001
- advising UPS on ocean transportation operational matters
- advising clients on security issues and compliance with C-TPAT and related security compliance matters
- representing clients in cruise port and terminal facilities development or acquisitions including Scandinavian World Cruises/SeaEscape terminals in New York City, Port Canaveral and Miami, and cruise line and ferry terminals in New Jersey, Texas, California, Alaska and Tianjin, China
Loan and Lease Financings
Loans
- counsel to K-Sea Transportation Partners L.P. in connection with its general revolving credit agreement and numerous specific tug and barge financings and construction contracts
- counsel to a U.S. bank in connection with the financing of the construction of a U.S. Jones Act tank barge
- maritime counsel to the lenders in connection with the main loan facility of a U.S. Jones Act container shipowner
- counsel to a U.S.-based hedge fund in connection with the financing of deepwater drilling rigs
- counsel to the lenders in connection with a proposed loan to a newly-created joint venture U.S. Jones Act shipowner, the proceeds of which were to be used to acquire certain U.S. Jones Act assets
- counsel to a U.S. financial institution in connection with a proposed LNG tanker financing
- maritime counsel to the lenders in connection with loans to a hedge fund, the proceeds of which were used to acquire a cruise company
- Marshall Islands counsel to ExxonMobil in the restructuring of financings involving six Marshall Islands flag tankers
- counsel to Citibank (lead bank) in secured financing and bond issues in the offshore industry (Pride, TODCO, McDermott)
- counsel to the lenders in connection with the financing of U.S. Jones Act barges used for electrical power generation in New York City
- representing Nordea (lead bank) in secured financings in the refrigerated cargo industry (Chiquita; Del Monte) and in connection with various LNG and tanker financings
- representing financial institutions or other lenders in connection with numerous loans secured by ship mortgages and related security on U.S., Canadian, Liberian, Marshall Islands and Vanuatu flag vessels
- advising an international bank in connection with Marshall Islands corporate matters and swaps transactions
- special maritime counsel to a U.S. investment bank as lender in connection with the financing of a U.S. Jones Act shipowner
- counsel for the lender in connection with a $30 million financing of a U.S. yacht construction project
- counsel for an oil company as bareboat charterer in connection with the sale of non-U.S. flag vessels by the shipowner
Leases
- counsel to lessors and lessees in connection with financing transactions under U.S. vessel lease financing laws and regulations
- counsel to the equity investors (U.S. financing companies) in lease financing of a Panamanian flag FPSO bareboat chartered to Petrobras and used in Brazilian waters
- counsel to the non-U.S. Jones Act time charterer in the financing and chartering of U.S. Jones Act tug-boats with specialized fire fighting equipment
Bowater Entities, Title XI and Capital Construction Funds
- special maritime counsel to Bowater entities on vessel financing purchase-sale transactions, chartering and utilization activities
- counsel to borrower, K-Sea Transportation Partners and its predecessors, respecting $40 million Title XI double-hulled barge financing, as extensively amended and restated in connection with the borrower's IPO on the NYSE
- counsel to borrower in the proposed Title XI financing of four vessels built in the U.S. that were to be owned by a Greek shipowner
- counsel on a $25 million shipyard modernization Title XI guaranteed loan for the NASSCO shipyard
- counsel to a Brazilian owner through a Bahamian company of U.S.-built (registered in Panama) large offshore vessels for the Brazilian offshore oil industry financed through Title XI
- special maritime counsel to U.S. and foreign entities in the proposed Title XI financing of support vessels for the U.S. and foreign offshore oil industries
- counsel to various U.S. shipowners in connection with establishing and maintaining capital construction funds (CCFs), a U.S. tax deferral product respecting income arising from certain U.S. vessel operations and used to modify or construct vessels in U.S. shipyards
Mexico City Office Experience
- counsel to the lenders (international banks) in a number of Mexican flag tanker financings in which TMM subsidiaries were the borrowers structured through a Mexican guarantee trust
- counsel to the various lenders (international banks) in three separate Mexican flag supply vessel financings that were structured as synthetic leases and that used a Mexican guarantee trust
- counsel to the lenders (international banks and financial institutions) in several Mexican flag offshore vessel financings in which TMM subsidiaries were the borrowers structured through a Mexican guarantee trust
- counsel to the lenders (U.S. financing companies) in the financing of a Panamanian flag rig bareboat chartered to a Mexican entity and used in Mexican waters; Mexican withholding taxes and enforcement of the "hell and high water" charter in Mexico were issues
- counsel to a Danish ship owner in two finance lease agreements covering vessels with a Mexican lessee
Maritime Bankruptcies and Workouts
- counsel to a secured lender that credit bid its interests for 18 vessels of debtors and in litigation respecting over 20 third-party maritime liens; representation included successful litigation against maritime lien holders' challenges to bankruptcy court's jurisdiction over their maritime claims and successful litigation invoking the bankruptcy court's jurisdiction to interpret and enforce its own sale order; Universal Oil v. Allfirst Bank (In re Millenium Seacarriers, Inc.), 419 F.3d 83 (2d Cir. 2005);In re Millenium Seacarriers, Inc., 458 F.3d 92 (2d Cir. 2006).
- intervention on behalf of lenders in several U.S. proceedings involving arrest of vessels leading either to the release of the vessel or judicial sale; following judicial sales, litigating maritime lien priority issues; for example, in re: MANATEE, litigating with 28 claimants, most of whom asserted priority over the mortgage.
- appearances for secured and unsecured creditors in Chapter 11 cases of a cruise line (SeaEscape), a marine offshore support company (Torch Offshore) and a marine ship repair/ship construction company (Halter-Calcasieu)
- counsel to one venturer in a bankruptcy proceeding in the Southern District of New York involving the joint venture
- counsel for the shipowner in a bankruptcy dispute involving charters of vessels located in Mexican waters
- counsel to marine lenders in negotiating a cooperation agreement with various agencies of DHS and the U.S. Attorneys' Office Lender in which the lenders obtained prompt possession of their collateral following seizure by the government for suspected alien smuggling
- in the 1990s, counsel to lenders in connection with the worldwide workouts of the Eddie Shipping Company, Sanko, Wah Kwan and Prometheus Shipping Company involving mortgage enforcement proceedings in 16 jurisdictions including the U.S.
- representing lenders in connection with the worldwide workouts of the Tidal Marine, Colocotronis and Karavias fleets including mortgage enforcement proceedings in the U.S. and 20 overseas jurisdictions
- representing lenders in the workouts of TBS Shipping International and Mandate Shipping Company
Other Relevant Experience
- representing 32 shipping entities, including cruise lines, bulk carriers and other shipowners, in successfully securing four separate funds totalling more than $2 million arising from crude oil overcharges in the 1970s and 1980s
- representing a U.S.-based aggregates corporation in connection with the construction contract for a self-unloading bulk carrier in Brazil
- advising a German entity respecting corporate structures to mitigate oil pollution risks
- advising a U.S. financial lessor respecting U.S. state law oil pollution issues
- advising a German bank respecting Liberian tax law issues and negotiating an official Liberian governmental opinion interpreting several Liberian tax statutes
- representing a non-U.S. shipowner in connection with certain vessel transfers to the Singapore flag
- representing Enserch Corp. as lessee in a lease financing of a deepwater floating oil and natural gas system in Garden Banks Reserve; concession rights and MARAD registration were involved
- representing a Norwegian bank as agent in connection with U.S. issues arising out of a secured €1.1 billion loan to a fish farming and processing business
- extensive experience in negotiating vessel construction contracts internationally and in the U.S.
- representing owners in numerous construction contracts relating to high-end yachts built in U.S. and non-U.S. jurisdictions, financing such construction, advising the owners on yacht registration and use, and other issues