Korea’s dry bulk shipping company Daebo International Shipping Co. has secured Chapter 15 bankruptcy protection from a U.S. Bankruptcy Court in Manhattan.
A bankruptcy Judge Michael E. Wiles signed off on the shipping company’s request following a hearing on Friday, the Wall Street Journal writes.
Under the rehabilitation proceedings in Korea, similar to the Chapter 11 proceedings in the United States, a company is allowed to ultimately survive and continue operation in a restructured form.
The decision to resort to protection in the US has been triggered by attempts of Houston-based stevedoring company Richardson Stevedoring & Logistic Services Inc to seize Daebo’s Daebo Trader vessel.
The vessel was detained in the middle of February in New Orleans after Richardson Stevedoring took its claims for unpaid services worth USD 1.6 million to court.
Daebo has requested for the seizure order to be lifted in order to deliver its cargo of soybeans to its owner and avoid further losses, claiming that its vessels should be protected under bankruptcy code.
The Judge Wiles approved Daebo a special bond issue worth USD 3.85 million to pay any successful creditor claims and allow the Daebo Trader to deliver its cargo, WSJ reported.
The company is facing over USD 1 million in additional claims from at least three other creditor lawsuits.
World Maritime News Staff