Hanjin Shipping files for US bankruptcy protection
Hanjin Newport in the southern port city of Busan / Yonhap
By Ko Dong-hwan
Hanjin Shipping has filed for bankruptcy in the United States to prevent creditors from seizing its vessels.
The move came five days after the world’s seventh-biggest shipper filed for court receivership in its home country, South Korea, as creditors decided to end financial support for the cash-strapped company.
According to reports, Hanjin filed for court protection under chapter 15 on Friday in Newark, New Jersey.
The company’s decision comes under U.S. Chapter 15 ― Bankruptcy Basics, which “provides effective mechanisms for dealing with insolvency cases involving debtors, assets, claimants, and other parties of interest involving more than one country,” according to U.S. Courts.
Whether the U.S. court accepts the request does not affect the company’s court receivership process in Korea. The public hearing on U.S. court receivership will be held on Monday evening (local time).
Meanwhile, the Korean government said Monday it would extend financial support for Hanjin contractors, a move to alleviate globe-spanning fallout from the shipper’s collapse.
The government plans to use funds from the newly allocated supplementary budgets to help those firms, especially small and medium-sized ones in relatively good financial health but troubled by the Hanjin crisis, according to Financial Services Commission (FSS) chairman Yim Jong-yong.
Hanjin has 457 contractors here. Their combined outstanding receivables are $57 million.