The recent depression in the maritime shipping industry served as the catalyst for many shipping companies to restructure. During the past few years, a number of foreign-based shipping companies have sought protection from creditors in U.S. Bankruptcy Courts—with varying degrees of success.Debtor-friendly U.S. reorganization laws and the extraterritorial application of U.S. court orders have been cited as reasons these companies seek protection in the U.S. Both are necessary for an industry in which the primary assets are constantly moving from one jurisdiction to another and creditors span the globe.1 Had these companies filed their cases in jurisdictions outside the U.S., they could have been forced to liquidate, as dictated by law in many other countries.Although several foreign-based shipping companies with virtually no U.S. assets have recently filed for Chapter 11, Bankruptcy Courts have been reluctant to dismiss these cases for lack of jurisdiction. This willingness to entertain such cases has created an inviting refuge for foreign shipping companies whose assets, operations and employees lie outside the U.S.While Bankruptcy Courts have provided these companies with a safe harbor initially, restructuring efforts by these debtors have had mixed results. Those that were unable to negotiate prearranged restructuring agreements with their lenders have typically… Read full this story
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International Shipping Companies Successfully Navigate Chapter 11 with Prenegotiated Plans of Reorganization have 292 words, post on www.natlawreview.com at June 26, 2014. This is cached page on Law Breaking News. If you want remove this page, please contact us.