A US judge has torn up an order seizing $4.5m in cash from Overseas Shipholding Group (OSG) after the tanker company reached a deal to end a dispute with Norway’s AMSC.
District judge Katherine Polk Failla “conditionally discontinued” the lawsuit between the companies in a New York federal court.
Oslo-listed AMSC had filed the lawsuit against New York-listed OSG, a tanker company that focuses primarily on US-flag markets, after the two long-time partners came to loggerheads at the end of a charter of the 46,900-dwt Overseas Los Angeles (built 2007).
William Bennett, the Blank Rome lawyer representing AMSC in the dispute, wrote to the court to request cancellation of the order that seized OSG’s cash held in a Citibank account.
“We are pleased to report that the above-referenced matter was settled,” he wrote.
Details of the settlement were not revealed, and an OSG media contact did not immediately respond to a request for more information.
The Overseas Los Angeles was one of three vessels that OSG handed back at the end of bareboat charters, out of a total of 10 product tankers that it had contracted from AMSC. Florida-based OSG operated the vessels in the Jones Act market, which requires US-built, American-controlled vessels to carry cargo between US ports.
In the dispute, AMSC alleged that OSG breached a contract, in part, by failing to pay a fee due at the end of the bareboat contract.
OSG’s Holland & Knight lawyers fired back with claims that actions by AMSC during the process to redeliver the Overseas Los Angeles violated the bareboat charter of the vessel, which has been renamed Seakay Star under its new bareboat charter with Philadelphia’s Keystone Shipping.
The judge gave the two companies 30 days to file papers formally dismissing the case.
Failla unfroze OSG cash on the day the company announced that it would deploy a further $10m to buy up its own stock, doubling the size of its share repurchase programme.
“In representing OSG’s stockholders, OSG’s board of directors continuously evaluates opportunities for the use of our available cash,” said chief executive Samuel Norton.
“The board has taken into account a variety of factors in reaching its determination to increase the stock repurchase programme which is underway.”
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