South Korean Shipbuilder STX Files Chapter 15 Bankruptcy in the United States

by San Antonio Attorney

A bankruptcy judge in South Korea has ordered STX Offshore and Building Co., Ltd.  to sell its shipyard along with its lucrative cruise ship business in France, according to reports.

STX Offshore & Shipbuilding Co. sought for bankruptcy protection in the U.S.  as part of its reorganization in Korea, according to reports.

United States Bankruptcy Judge Jeff Bohm approved a temporary automatic stay preventing STX’s creditors from taking any assets of the company located within the country in accordance to the U.S.  bankruptcy code.

STX, the fourth biggest shipyard in Korea, filed for court receivership in May.  The shipbuilder’s administrator, Yoon Keun Jang, stated in a court filing that some creditors were trying to outwit the proceedings in Korea through repossession of the company’s assets in the United States.  Jang said without the automatic stay, the company would sustain irreversible damage.

In the meantime, the judge of the bankruptcy case in Korea has reportedly told STX to sell its shipyard and cruise ship company STX France.

According to reports, Seoul Central District Court spokesman Choi Ung-young said interested buyers can file their first round of bids for STX France and STX Offshore – either separately or together – by submitting a letter of interest to the court.  The deadline of submission is on Nov.  4.

Ung-young also said bondholder and creditors are going to vote on STX’s rehabilitation scheme at an assembly that has been put on hold until Nov. 11.  If not approved, STX Offshore is expected to be liquidated.

The other major Korean shipbuilders, Samsung Heavy Industries Co., Daewoo Shipbuilding & Marine Engineering Co. and Hyundai Heavy Industries Co., are undertaking financial restructuring.  The corporations are trying to reduce costs due to declining demand and tougher competition from Chinese shipyards.

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