U.S. Bankruptcy Judge John Sherwood approved a motion by Hanjin Shipping who sought to extend to the United States the protection from creditors which it has also done in home country South Korea. That’s created a freakish situation on the high seas for 85 Hanjin ships that have been effectively marooned offshore as ports in the U.S., Asia and Europe have turned the company’s ships away.
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Hanjin Shipping entered court receivership on September 1, after its creditors halted financial support to the debt-ridden shipper.
“Merchandise is in limbo at the moment and retailers are working hard to make sure it ends up on store shelves in time for the holidays”. One of the ships, the Hanjin Boston, is scheduled to head into the port on Friday afternoon for re-fueling. Media reports have said some ships, which can have crews as large as 25 on board, were running low on food, water and other supplies amid uncertainty over how long staff would need to wait for legal resolution. Hanjin Scarlet had been anchored near the Port of Prince Rupert in northern British Columbia for almost a week. Some cargo owners have managed to unload their cargo from Hanjin ships and are looking for alternative ways to transport them, Busan Port Authority said.
Bankruptcy protection in America is similar to Korea’s court receivership. There should be measures to secure the safety of sailors, he said, adding they don’t know how long they should wait at sea.
Hanjin’s vessels are holding $24.4 million in television parts meant for factories in Mexico, along with $13.5 million in refrigerators, washing machines, microwave ovens and dishwashers, Jung Tae Ahn, the senior vice president of the company’s Visual Display Business division, said in court documents. According to Drewry Maritime Research, the global shipping industry is set to lose about $5 billion this year.
But lawyers for Hanjin on Friday said a South Korean bankruptcy court approved the release of $10 million in funding to unload four Hanjin Shipping Co. chartered ships that have been sitting off USA waters, including at least two off the coast of Southern California, lawyers for Hanjin said.
The U.S. Bankruptcy Court in Newark, New Jersey has authorized temporary protection for Hanjin, just four days after the shipping giant filed its application.
Its bankruptcy would be by far the largest in the history of container shipping, which is suffering its worst downturn in six decades because of slumping global trade and a slowdown in China.
Hyundai Merchant, which is itself in the midst of a creditor-led restructuring program and counts state-owned Korea Development Bank as its biggest shareholder, has 63 container ships and 57 bulk carriers in its fleet.
“I will do everything in my power to resolve the trading crisis”.
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Longer-term questions such as what happens to the vessels once they have been unloaded and to the empty containers remain unanswered.
