Hanjin Shipping Files Bankruptcy after Banks Withdrew Financial Support

by San Antonio Attorney

Hanjin Shipping Co., the giant shipping company based in South Korea, filed for bankruptcy protection on Aug.  31 in South Korea.

Hanjin stopped accepting new cargo and ports in the United States started fending off its ships after it declared bankruptcy.

The company reportedly filed the bankruptcy petition a day after the creditors, led by Korea Development Bank, withdrew financial backing that totaled to $896 million.  The fate of the shipping company will be determined by Seoul Central District Court.

Hanjin and many other shipping companies have been affected by a global dwindling of trade in the past few years.  The decline started after the companies, which expected that growth will continue, expanded by investing in terminals and ships.

The impact of Hanjin’s bankruptcy filing in South Korea was almost immediate.  For instance, some of its vessels that were supposed to disembark at the ports of Long Beach and Los Angeles, California, sailed off the coast on Aug.  31, their cargo—intended for retail shelves, warehouses and factories—left indefinitely.  Ambiguity about the company’s future brought up apprehensions that its vessels could be seized by creditors, causing congestion the sea ports.

The repercussions of Hanjin’s bankruptcy are likely to make waves worldwide.

Trading experts say that Hanjin’s problems could ruin the holiday season for people with goods on its ships at present.   The cargo owners could suffer financially as they search for space with other shipping companies.

Hanjin Shipping is the largest in South Korea and the seventh biggest cargo carriers that owns about 70 liner and tramper vessels all over the world moving more than 100 million tons of shipments every year.  Its vessels include 150 container ships and bulkers.

The company has headquarters in Asia, Europe, United States and South West and East Asia, about 5,000 international staffs, and container terminals in major ports worldwide.  All these made Hanjin a world-class shipping company.

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