A conflict has emerged at shipowner Eletson between existing management and a new leadership team installed by a New York bankruptcy court.
Tanker owner Eletson Holdings (EHI) emerged from bankruptcy protection in New York this week, with a restructuring plan backstopped by a Canadian hedge fund and a new chief executive named as Adam Spears.
Today existing managers at tanker owner Eletson have hit back, claiming new executives installed after a US bankruptcy court restructuring have no validity.
The “incumbent officers” said in a statement sent to TradeWinds that any attempt by the “purported new equity owners” of EHI to appoint management or directors at the Liberian company was “premature and ineffective”.
This is due to a lack of recognition of their capacity and authority in the courts of Liberia and Greece, where the business is located, they claimed.
TradeWinds understands that EHI is the Liberian-registered parent, while the tanker fleet is run by the Greek operation.
This raises the possibility of new owners affiliated with Canadian hedge fund Murchinson controlling EHI, while the existing team runs the Greek company.
It is not clear how this would work in practice.
The Eletson officers noted that a Greek court had appointed a provisional board of directors with the authority to run the company, pending a hearing scheduled for February 2025, “at which time the management of the company will be addressed”.
Vasilis Hadjieleftheriadis, EHI president, said: “While we respect the US bankruptcy process, the recent decision is under appeal and we must also respect international law.
“In the meantime, we assure our various stakeholders that we continue to exercise our utmost diligence and care to ensure the smooth operation of the business.”
Vassilis Kertsikoff, chairman and chief executive of Eletson Gas, added: “The operation and control of Eletson Gas, a separate legal entity, is not affected.”
Officers at Eletson declined to comment further.
‘New leadership’
On Wednesday, EHI emerged from bankruptcy protection in New York with a restructuring plan backstopped by an affiliate of Murchinson.
The restructured company said it exited the Chapter 11 bankruptcy process with “new leadership, new financial resources and no debt”.
The announcement came more than 20 months after creditors pushed Eletson, an owner of MR product tankers, into a Chapter 7 liquidation case. A federal judge later converted it into a Chapter 11 reorganisation.
Eletson said one of those creditors, Murchinson-backed Pach Shemen, proposed and backstopped the reorganisation plan that allowed it to exit the US Bankruptcy Court for the Southern District of New York.
Murchinson is a Toronto hedge fund backed by Marc Bistricer that, in shipping, has been known to be a provider of rescue financing.
The plan garnered the support of the majority of Eletson’s creditors and was approved by the court in October.
Spears, a new name to many in shipping, was appointed the shipowner’s new chief executive.
“Today marks an important milestone for Eletson and its subsidiaries,” he said.
“After completing the Chapter 11 process, the company is now in a strengthened financial position and debt-free. We look forward to being able to focus on the next phase of Eletson’s evolution by enhancing operations and driving growth.”
The new Eletson comprises Spears and independent directors Leonard Hoskinson and Timothy Matthews.
Eletson was founded in 1966 by Vassilis G Hadjieleftheriadis, with his two sons and two sons-in-law.
