Cash-strapped Hanjin Shipping Co. has been given provisional court protection in the U.S. to unload cargo at some ports without worrying about its ships being seized by its creditors.
Hanjin Shipping, currently under receivership in South Korea, sought court protection in the U.S. as four of its ships have been stranded off the coast of the U.S. out of fear they would be seized by creditors, said a report from Yonhap News on Saturday.
U.S. Bankruptcy Judge John K. Sherwood on Friday (U.S. time) granted Hanjin Shipping protection under Chapter 15 of the Bankruptcy Code.
Hanjin Shipping has also been reportedly granted court protection in Great Britain.
The Journal of Commerce in a September 7 report said that a British court has granted Hanjin Shipping’s request for bankruptcy protection it received in South Korea to be recognized in the United Kingdom, allowing Hanjin ships to call in the country without fear of arrest.
Some 90 of Hanjin’s 128 ships have been stranded at sea as they were blocked from entering ports in the United States, China, Canada and many other nations, as lashing service firms and port workers refused to work for the shipper out of concerns that they would not be paid.
Also, some of its ships have been seized by its creditors, further complicating the problem. Hanjin Shipping is seeking stay orders to prevent its ships from being seized by creditors in over 40 countries.
Financial help from Korean Air
Meanwhile, the board of directors of Korean Air Lines Co., Hanjin Shipping’s biggest shareholder, approved a proposed KRW60 billion in assistance for its affiliate earlier in the day on the condition that the loan be extended in exchange for collateral.
Earlier this week, the Hanjin Group, the parent company of South Korea’s leading container shipping line, pledged to provide some KRW100 billion, including KRW40 billion of group chairman Cho Yang-ho’s personal assets, to the shipper, in a bid to help ease the cargo crisis triggered by the shipper’s receivership.
Creditors of Hanjin Shipping, led by the state-run Korea Development Bank, said earlier it would not extend fresh financial aid to the ailing shipper, calling on the shipper to provide collateral for any funding.
Photo: Jean-Philippe Boulet
