A US judge issued an order granting protection to Hanjin Shipping vessels from arrest but four creditors have already asked him to reconsider his inclusion of chartered ships in the shield.
US Bankruptcy Judge John Sherwood, who is overseeing proceedings in a federal court in New Jersey, ruled earlier today that Hanjin’s ships are protected from arrests in the US because they can assert their claims in the ship operator’s South Korean proceedings.
But lawyers for commodities trader Glencore, bunkers supplier OceanConnect Marine, McCallister Towing & Transportation and Moran Towing say the decision is contrary to both US and South Korean law because it covers asset seizure cases against Hanjin’s chartered vessels.
Not Hanjin’s ships
“First, none of the vessels involved belong to Hanjin. There accordingly is no lien here – or security interest – against Hanjin property,” the Simms Showers and Wasserman, Jurista & Stoltz attorneys for the four claimants wrote in an emergency motion Friday.
“Fundamentally, no Korea law has been presented – nor does any exist – which would extend security interest claimants against property which is not property of the debtor any lien recognised in the Korean insolvency proceedings.”
The lawyers claim that the ruling improperly extends protections to owners of Hanjin-chartered ships in cases where they have maritime liens against the vessels.
Freezing suits
As TradeWinds reported earlier this week, Sherwood put a freeze on litigation Tuesday in a provisional order recognising Hanjin’s South Korean bankruptcy. But he ordered the company’s ships to stay in US waters while he figured out what to do with such maritime lien claims.
Today, he cemented the protection of Hanjin ships from arrest in those lien cases.
The decision came after Cole Schotz attorney Ilana Volkov, the South Korean shipping giant’s US restructuring lawyer, argued that the power of maritime creditors with liens against ships to chase vessels, charterers and owners simultaneously in US courts should not deny Hanjin the protections of bankruptcy law.
Chartered and owned alike?
Hanjin should be shielded from arrest of both owned and chartered vessels, she argued.
“It is crucial to the success of Hanjin’s global rehabilitation efforts that Hanjin and its property in the US receive continued protection of the automatic stay,” Volkov wrote of the hold on litigation, including arrests cases.
“While none of the objectors dispute this proposition – many actually support the requested provisional relief – they each advance parochial interests that, if obliged, would actually end run the stay order entered by the Korean court.”
