On September 9, 2016, the Bankruptcy Court held a continued hearing regarding certain provisional relief requested by Hanjin Shipping Co. Ltd. in connection with the company’s application for protection under Chapter 15 of the United States Bankruptcy Code. As was previously reported, Hanjin is undergoing rehabilitation proceedings in South Korea and has filed for recognition of those proceedings in numerous jurisdictions, including the U.K., Japan, and the Chapter 15 proceedings in the U.S.
At the hearing, the Bankruptcy Court heard arguments from a number of Hanjin creditors concerned with getting Hanjin ships to port and cargo on ships, at terminals or in yards delivered and Hanjin’s ability to pay for these services. According to Hanjin’s counsel, the South Korean court has authorized Hanjin to pay for the discharge of cargo on at least four vessels; although other vessels still remain at sea without funding. In hopes of facilitating the free flow of goods, after the hearing, the Bankruptcy Court entered a provisional order that further enforces the automatic stay and prohibits vessel arrests at U.S. ports until final recognition is granted. The provisional order also established a protocol for the release of goods to beneficial cargo owners under certain circumstances. The court has yet to set a date for the final recognition hearing.
Seward & Kissel is continuing to monitor all developments. Various issues have yet to be resolved, and creditors will likely be required to carefully consider all options in dealing with Hanjin’s rehabilitation. As such, we would encourage affected creditors to seek guidance in the near term to best protect their position and maximize their recoveries. Seward & Kissel is available to assist you in your Hanjin-related inquiries. Please contact Lawrence Rutkowski at 212-574-1206 or rutkowski@sewkis.com; Bruce Paulsen at 212-574-1533 or paulsen@sewkis.com; John Ashmead at 212-574-1366 or ashmead@sewkis.com; Mike Timpone at 212-574-1342 or timpone@sewkis.com; or Robert Gayda at 212-574-1490 or gayda@sewkis.com.
