Shipping financiers DVB Bank and Norddeutsche Landesbank (Nord/LB) are suing Greek shipowner Nikolaos Livanos for almost $12m they claim is owed in outstanding debt.
The defendants, which comprise Livanos and his companies Vega Marine Ltd and Fortuneship Ltd, have not responded to the claim and did not appear at a London High Court hearing on Friday.
Judge Nigel Henshaw granted permission for the application hearing to proceed in the defendants' absence. The session was held by phone and was attended by TradeWinds.
The two shipping banks are seeking $11.75m, following the borrowers' failure to make a $187,500 repayment under a supplementary agreement, which was signed after the shipping companies defaulted on a loan that matured in 2016.
DVB and Bremer Landesbank lent $97m in total to Vega and Fortuneship, both of which are beneficially owned by Livanos, in order to finance the capesize vessels Captain Vangelis L (built 2009) and the Cape Kennedy, which was renamed Kyla Fortune (built 2001).
Bremer Landesbank's outstanding debt and its title to sue was transferred to Nord/LB in August 2017, when it was taken over the German bank.
The first advance was for $29m, which was repaid in full in 2007 when the Captain Vangelis L was sold that year.
Dispute arises
The dispute in London relates to the second advance for $68m, which had a nine-year tenor and matured in 2016, the claimaints' barrister outlined during the hearing.
However, in 2012 the banks and borrowers signed the first of four supplementary agreements to make provisions for cash collateral and loan-to-value obligations.
A sum of $16.25m was still outstanding when the loan matured in 2016, the court heard.
The parties signed a final agreement, under which the Kyla Fortune was sold for $4.5m to pay down the debt and a personal guarantee was provided by Livanos.
The lenders then agreed to write off the remaining debt in exchange for $3m from the borrowers, payable in 16 instalments, for which Livanos provided a personal guarantee.
But the borrowers missed the first instalment of $187,500, which had been due on 31 January 2019, and did not rectify the situation within the 30-day grace period, the claimants' barrister told the court.
The claimants argue that this constituted an event of default, according to the terms of the supplementary agreement, which caused the entire balance of the debt to be due immediately, plus interest.
That means the sum of $11.75m is recoverable under Livanos' personal guarantee, the claimants told the court.
The banks have asked the court to grant two summary judgments in their favour: one against Vega and Fortuneship, and another for DVB against Livanos under the personal guarantee.
Henshaw said he would enter a written judgment shortly.
Livanos is the second cousin once removed of shipowner Peter Livanos and is best known for heading up Athens-based management company Kyla Shipping & Trading.
Both cousins are engaged in a legal dispute in London over historic forward freight agreements that date back to 2007, as TradeWinds has reported.
DVB Bank and Nord/LB are both known to be winding up their portfolio of shipping loans and ceasing lending to the sector.
TradeWinds approached Livanos, as well as DVB and its counsel for comment, but did not receive responses before publication.
