Keybank National Association is pursuing TransAtlantic Lines Holdings for $7.8m owed for the past three years.
In November 2015, First Niagra, which merged into Keybank a year earlier, extended a $5m term loan and a $4m line of credit to the American diversified shipowner.
As security for the loans, First Niagara was given first preferred ship mortgages on a multipurpose ship, a singledecker, a non-propelled barge and a tugboat, according to court documents filed in US District Court for the District of Connecticut.
The respective vessels are the TransAtlantic and the Geysir (both 5,100-dwt, built 1997), the 5,500-dwt Guantanamo Bay Express (built 1983) and the Spence (built 1974), which sunk in 2015.
First Niagra was also given a security interest and lien on the borrowers' personal property and assigned certain contracts related to operation of its business and the vessel.
In December 2016, Keybank and TransAtlantic entered into an omnibus loan that moved the loan's maturity date a year later to November 2017.
In late summer 2017, it came to Keybank's attention that TransAtlantic's business operations were in distress, evidenced by failure to pay their crews and repay loans.
The US Coast Guard (USCG) seized the Transatlantic in California and the Geysir in Florida for unpaid crew wages and vessel deficiencies, and creditors filed liens against both ships with the USCG.
From late 2017 through early 2018, Florida state court liquidated the Geysir and the Guantanamo Bay Express, while California state court sold the Transatlantic, giving Keybank proceeds of almost $1.5m.
Emails to lawyers on both sides were not immediately returned.
