Samsun Logix Corporation, South Korea’s seventh largest shipping line, has applied to the Korean court to enter into rehabilitation proceedings.
The submission was filled for the commencement of rehabilitation proceedings with Seoul Central District Court on 3 Jul 2015, marine insurer the West of England informed.
This is the second time that Samsun Logix has applied for rehabilitation, following the first submission shortly after the global financial crash, in March 2009.
The court is expected to decide on the approval of the request in two weeks.
Before that takes place, the Korean court is expected to shortly issue an interim preservation order which prohibits Samsun from disposing of its assets, making payments for existing debts or borrowing money without court approval. This means that Samsun cannot pay future hire without court approval.
Further, the court will also issue a comprehensive stay order on judicial proceedings against Samsun protecting the company’s assets in Korea from creditors’ potential claims. Under the order, seizure of Samsun’s assets in a foreign country will be also prohibited in countries that recognize the order of the Korean court.
“It’s not certain whether Korean court renders the decision for the commencement of rehabilitation proceedings against Samsun since it’s their 2nd time for them to resort to court protection, however, as long as it is turned out that Samsun’s going concern value exceeds the liquidation value, the court would render the decision to commence it.
If this is the case, we expect that the deadline for creditors to file a rehabilitation claim is estimated to be in the middle of this August and current creditors should also report their claim in case their claim is not listed correctly in Samsun’s creditors list,” lawyers Kwon & Moon said in a notification.
The bulker owner has seven dry bulk carriers in its fleet, three capesizes, two panamaxes and two handy bulkers.
Samsun is the second Korean bulker owner to file for bankruptcy protection this year following Daebo International Shipping Co. Ltd. which filed an application for rehabilitation proceedings on 11 February 2015.