Maritime Bankruptcies, Foreclosures and Workouts

For more than a century, Holland & Knight has assisted clients in navigating the periodic economic down-cycles that influence the U.S. and international maritime industry. With a thorough working knowledge of maritime bankruptcies and worldwide mortgage foreclosures and workouts, our Maritime Team is at the forefront of changes in the law that impact our maritime clients.

Our team of lawyers is skilled in all the facets of restructuring required to help you safely navigate the complex intersection of maritime and bankruptcy law. We have vast experience in bankruptcy procedure; ship finance and corporate law; maritime litigation, including defense of maritime lien claims; charter party disputes and international tax.

Members of our Maritime Bankruptcy Team represent maritime borrowers and lenders in troubled situations on a daily basis.

Chapter 11 

Left in prior down-cycles with no effective court-supervised reorganization regime, the broad jurisdiction of the U.S. Bankruptcy Court and the authority granted in the U.S. Bankruptcy Code to affect a balance sheet restructuring without management losing control of the process has attracted a steady stream of non-U.S. companies to the invoke the provisions of Chapter 11. Ship owners and creditors of ship owners have come to appreciate the advantages of Chapter 11, including:

• Unified forum for resolution of all disputes
• Protection against piecemeal adjudication of supplier, counterparty, cargo, vendor and other suits against vessels operating internationally, thus avoiding the "death by a thousand cuts" in many different courts worldwide
• Continuing operations and retaining the corporate franchise, branding and business relations
• Potential for significant savings with respect to legal and consultant expenses, as well as management time by avoiding multijurisdictional litigation
• A sophisticated, experienced, predictable and efficient legal system
• Enforcement of orders through severe contempt fines

Our team was – and remains – on the forefront of Chapter 11's use by international shipping companies. Our extensive experience in guiding clients through Chapters 11 and 7 proceedings include:

• Excel Maritime: counsel to the agent and senior lenders in the balance sheet restructuring of a dry bulk shipping company with an over forty vessel fleet; Chapter 11, SDNY
• TMT Group: counsel to a purchaser of two RORO vessels and another purchaser of six bulkers; Chapter 11, SD Tex.
• Primorsk Shipping: counsel to backup bidder for nine tankers; Chapter 11, SDNY
• Trico Marine: counsel to convertible note and equity holder; Chapter 11, Del.
• OW Bunker: counsel to over thirty creditors of fuel provider; Chapter 11, Conn.
• Derecktor Shipyard: counsel to vessel purchaser and lien holder in the reorganization of a shipyard; Chapter 11, Conn.
• Eastwind: representing creditor interests; Chapter 7 SDNY
• Oceantrade/Bulk America: represented equity interests and liquidating trustee; 10-15 ships; Chapter 11 SDNY
• Navigator Gas: five ships; high yield bonds; Chapter 11 SDNY
• Millennium SeaCarriers: Cargill/Wayland (now Wayzata)/Oppenheimer – secured bondholders; 19 ships; high yield bonds; Chapter 11 SDNY
• Amer Reefer Company Ltd.: Mandate Shipping Company Ltd. (owners); four ships; high yield bonds; Chapter 11 SDNY

Chapter 15

Chapter 15 is the U.S. codification of the UNCITRAL Model Law on Insolvency. Enacted in 2005, it is designed to provide a clear and procedurally simple method for obtaining recognition of foreign insolvency proceedings, a stay of actions against or that affect the foreign debtor and its assets in the U.S. and a mechanism for transferring control of a non-U.S. debtor's U.S. assets to the debtor's foreign bankruptcy proceedings. Chapter 15 also permits the foreign debtor to use U.S. procedures to take discovery and pursue litigation in the U.S. under certain circumstances.

Members of our team have been involved in the following Chapter 15 U.S. proceedings that are ancillary to primary insolvency proceedings overseas:

• Fairfield Sentry Limited: represented the liquidator; main insolvency proceedings in the British Virgin Islands
• Farenco Shipping Co. Ltd.: representing the liquidator; main insolvency proceedings in the British Virgin Islands
• Korea Line Corporation: representing the receivers; main insolvency proceedings in the Republic of Korea
• Transfield ER Cape Limited: representing the liquidator; main insolvency proceedings in the British Virgin Islands
• Armada (Singapore) Pte. Ltd.: represented the receivers; main insolvency proceedings in Singapore
• The International Banking Corporation: represented the administrator; main insolvency proceedings in Bahrain
• Britannia Bulkers A/S: represented the Danish trustee for the debtor; main insolvency proceedings in Denmark

Additional Maritime Experience

Members of our team have extensive experience representing the interests of maritime lenders and creditors around the globe. The following are a few matters handled by our team:

• Global instructing counsel for enforcement proceedings in workouts and foreclosures in more than 40 jurisdictions worldwide
• Intervention on behalf of lenders in a number of 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 marine offshore support company (Torch Offshore) and a marine ship repair/ship construction company (Halter-Calcasieu)
• Counsel to marine lenders in negotiating a cooperation agreement with various agencies of U.S. Department of Homeland Security 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