By Jhoo Dong-chan
The nation’s largest shipping company Hanjin Shipping has filed for bankruptcy protection in the United States to protect its assets from being seized by creditors.
According to the Wall Street Journal, Monday (KST), the ailing shipping line filed for protection Friday under Chapter 15, the section of the U.S. bankruptcy code that deals with international insolvency matters, in the U.S. Bankruptcy Court of Newark, New Jersey, days after the company announced its court receivership in Korea, Wednesday.
The application for bankruptcy protection in the U.S. was submitted under incumbent CEO Seok Tae-soo, a similar measure to the court receivership that the ailing shipping line submitted in Korea.
“If recognized by the U.S. court, the Chapter 15 filing will block creditors in the U.S. from seizing the company’s assets or launching other legal action while its foreign bankruptcy proceedings are under way,” Wall Street Journal reported.
“Hanjin’s bankruptcy case is being handled by the law firm Cole Schotz P.C. U.S. Judge John K. Sherwood has been assigned the case. An initial hearing is set for Tuesday afternoon in Newark.”
According to a government task force, Monday, 79 vessels ― 61 containers and 18 bulk ships ― among 128 operated by Hanjin Shipping have halted operations at home and abroad.
Hanjin Shipping container ships have reportedly been denied entry to Busan port, the nation’s No. 1 port, since the court receivership was filed last week. Its shipping clients are, in the meantime, struggling to find alternatives for their shipments.
A Hanjin Shipping official also said last week that one of its container ships, Hanjin Roma, was seized at a port in Singapore shortly after creditors announced they would stop supporting Hanjin Shipping. German ship owner and operator Rickmers, which chartered ships to the beleaguered shipper, filed for the provisional seizure of the 5,308-TEU vessel.
Another container ship, Hanjin Mexico, has also halted its shipping operation as the ship owner, PIL, refused to allow it to sail due to overdue charter fees from the shipping line.