Shipping lenders DVB Bank and Nord/LB have won a claim against shipowner Nikolaos Livanos to recover almost $12m in outstanding debt.
The case concerns a loan provided by DVB and Bremer Landesbank, which was later taken over by Nord/LB, to vessel-owning companies Vega Marine and Fortuneship, which are beneficially owned by Livanos.
The dispute arose after the borrowers failed 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.
This caused the outstanding balance of $11.7m to be due in full immediately, plus interest.
Judge Andrew Henshaw on Wednesday granted the claimants' request for a summary judgment on the basis that the sums claimed "are undoubtedly due" and therefore do not require a trial.
Henshaw judged in favour of both claimants' claims against Vega Marine and Fortuneship, which entitles them to recover $11.7m plus interest accrued since 2 March last year.
He also ruled that DVB Bank was entitled to recover the sum from Livanos, who was personal guarantor of the loan.
"In the present case, the defendants have no real prospect of success in defending the claimants' claims," Henshaw said in his written judgment, which was handed down on Wednesday.
"The claimants' claims are for debts due under written contracts of loan and guarantee whose authenticity and validity are unquestionable and have never been challenged by the defendants."
The defendants, which comprise Livanos, Vega Marine and Fortuneship, did not respond to the claim and were not represented in the London High Court dispute.
In light of this, Henshaw said he was satisfied that the claimants' legal team had drawn his attention to what possible defences might be available to the claims.
The claimants and their counsel Stephenson Harwood declined to comment when approached by TradeWinds.
Livanos did not respond when contacted for comment.
Back story
DVB and Bremer Landesbank lent $97m in total to Vega and Fortuneship in order to finance two capesize vessels — 169,000-dwt Captain Vangelis L (built 2009) and the 171,000-dwt Cape Kennedy (built 2001), which was renamed Kyla Fortune.
The first advance was for $29m, which was repaid in full in 2007 when the Captain Vangelis L was sold that year.
The dispute in London relates to the second advance for $68m, which had a nine-year tenor and matured in 2016.
The borrowers were able to repay most of the loan, but in 2012 the first of four supplementary agreements was signed with the banks 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 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 installments, for which Livanos also 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 claimed 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.
The banks then claimed the $11.7m is recoverable under Livanos' personal guarantee.
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.
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.
