Hanjin Shipping Files Chapter 15 Bankruptcy in the United States

by San Antonio Attorney

Hanjin Shipping Co. has filed for Chapter 15 bankruptcy in the United States seeking protection for its ships from being taken by creditors.

The South Korean shipping filed the petition on Sept. 2.  Chapter 15 bankruptcy sorts out international bankruptcy matters.  The case was filed in Newark, New Jersey bankruptcy court after the company declared bankruptcy South Korea.

Hanjin’s filed for rehabilitation in South Korea.  It is comparable to Chapter 11 bankruptcy in the United States.  The company is seeking protection from seizure of vessels by creditors and terminal operators who refused to handle cargoes, causing container ships carrying consumer goods to be stranded.

Hanjin is one of the biggest container carriers in the world, operating around 60 shipping lines globally, with 140 bulk or bulk vessels, as stated in court papers.  According to reports, it is the ninth biggest container carrier, shipping more than 100 million tons of freights every year.

Its collapse would be the biggest failure in the history of container shipping sector, overshadowing all past bankruptcies of other carriers.  After Hanjin’s bankruptcy filing, ports have refused to handle its shipment resulting to 45 ships being stranded at sea, the company said.

The bankruptcy case filed in the United States was carried out by Tai-Soo Suk, the foreign representative of Hanjin.  If acknowledged by the United States court, the case will stop creditors in the country from seizing any of Hanjin’s assets or commencing any legal actions throughout its foreign bankruptcy duration.

In Chapter 15 bankruptcy, companies can seek protection for their assets from creditors as they work to find buyers for their holdings or to reorganize in their country of origin.  It is often the recourse of shipping lines, whose vessels are at risk of being taken by creditors in seaports world-wide.

The initial hearing of Hanjin’s bankruptcy case is on Sept. 6.

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