Maritime - Business Restructuring & Bankruptcy

To the Rescue


The recent downturn in the fortunes of some segments of the shipping industry has seen many maritime businesses using Chapter 11 or Chapter 15 of the U.S. Bankruptcy Code.  Most recent and notable is the Chapter 11 filing by Overseas Shipholding Group, Inc., but there are many others and likely more to come.  Based on the experience of the lawyers in our Admiralty and Maritime Practice and Business Restructuring and Insolvency Practice, we have formed a Maritime Bankruptcy Team with the proven ability to assist at every stage of a maritime insolvency.

Introduction

Blank Rome is an Am Law 100 firm with 13 offices and over 600 attorneys throughout the United States and in Shanghai who represent businesses and organizations ranging from Fortune 500 companies to start-up entities around the globe.  Our business restructuring, bankruptcy, and maritime practice groups are nationally recognized providers of legal counsel:

  • U.S. News World Report – Best Lawyers© 2013 awarded Blank Rome’s Admiralty and Maritime Practice a ranking of first place nationally.
  • Chambers USA praises Blank Rome “for the depth and quality of its business restructuring and bankruptcy practice, which is renowned on a national scale.”
  • The Deal.com has ranked Blank Rome as being among the top bankruptcy law firms and individually ranked several of the attorneys in our bankruptcy practice.

Blank Rome’s Maritime Bankruptcy Team has an unmatched capability to provide one-stop shopping for advice in respect of financial restructurings and bankruptcies in the maritime industry to creditors, debtors and other stakeholders.

Nature of the Problem

Financial restructurings and bankruptcies in the maritime industry often raise unique issues with respect to what is often the principal collateral at issue—the debtor’s vessels and earnings. 

In this respect, maritime Chapter 11 bankruptcies are unlike land-based bankruptcies.  The pre-petition arrest or seizure of the debtor’s vessels and post-petition disposal of debtor’s vessels whether by bankruptcy Section 363 sale or judicial sale by an admiralty court sitting in rem are key issues often involving multiple jurisdictions.  The maritime lien creditors’ rights under applicable law and an understanding of the relevant admiralty law principles in a conflict of law examination are essential considerations for all parties.  Such issues require knowledge of the interplay of bankruptcy and maritime law.  It is a rare U.S. maritime case that does not have specialist maritime counsel acting alongside the bankruptcy counsel.  And in some jurisdictions, such as Delaware (where we have an office), local counsel is also mandatory.

In addition, the use of cash collateral is often involved in a Chapter 11 case.  If debtor-in-possession or exit financing is being arranged, lenders will want to receive preferred mortgages on the vessels and to include the appropriate loan covenants for a ship financing.  Prospective lenders and purchasers will insist on due diligence on the debtor’s vessel operations to confirm that there are no undisclosed liabilities.  Review of the underlying mortgage documents is a necessity.  These are often governed by the law of the Marshall Islands or Liberia on which we frequently advise.

Chapter 15 of the U.S. Bankruptcy Code is another powerful tool that can be used to successfully resolve cross border insolvencies and foster cooperation between foreign and domestic courts dealing with international bankruptcy actions.  Members of our Maritime Bankruptcy Team have represented foreign representatives and creditors in numerous Chapter 15 maritime cases.

With Blank Rome there is no need to hire separate counsel to address maritime issues.  We have acted in numerous maritime bankruptcies (see “Representative Maritime Matters” and “Recent Bankruptcy Matters” starting on page 5).  We also routinely advise borrowers and lenders in ship finance transactions, including mortgage-backed and lease finance transactions.  We provide specialized advice to our maritime clients in every facet of the business.

Blank Rome Maritime

Blank Rome’s notable combinations with the maritime practices of Dyer Ellis & Joseph in 2003, Healy & Baillie LLP in 2006, and Bell, Ryniker & Letourneau, P.C. in 2013 gave the Firm a solid foundation as the largest maritime practice in the United States.  As noted above, Blank Rome is consistently listed as the leading maritime law firm in the United States by Chambers USA and by the Chambers Global edition of The World’s Leading Lawyers and International Who’s Who.

Our lawyers play a major role in many of the industry’s leading conferences and often write for, and are quoted in, leading maritime publications.  Our pool of talent encompasses a wide variety of backgrounds and experience.  Our attorneys include former U.S. Navy and Coast Guard officers, including flag officers: representatives and senior staff from Congressional committees; and high level officials of government agencies, including the U.S. Maritime Administration, U.S. Customs and Border Protection, U.S. Securities and Exchange Commission, National Oceanic and Atmospheric Administration, and others.

We regularly handle complex, multi-jurisdictional, and international maritime and admiralty matters.  Many of our maritime attorneys are fluent or conversant in languages other than English, including Cantonese, French, German, Hebrew, Hungarian, Hindi, Mandarin, Norwegian, Shanghaiese, and Spanish.  Members of the team are admitted to practice in Australia, Canada, England, Greece, New Zealand, as well as the United States.  We have developed a trusted network of corresponding attorneys throughout the world to assist our clients with various matters, including vessel arrests.

Blank Rome LLP’s Shanghai Representative Office, USA offers maritime services and is well positioned to assist clients in China and throughout Asia and Oceania.  We offer a broad range of advice to clients doing business or investing in China.

Business Restructuring & Bankruptcy

Blank Rome’s business restructuring and bankruptcy practice group’s 14 partners and 14 associates comprise the core membership of this group, which is based in our New York, Philadelphia, Los Angeles, and Wilmington, Delaware offices.

We have represented debtors, creditors, creditors’ committees, and other stakeholders in many nationwide bankruptcies and insolvencies, reorganizations, restructurings, and workout matters throughout the U.S.

We advise financially distressed companies in a variety of industries and assist them in evaluating their options, including Chapter 11 reorganization and out-of-court restructuring.

Blank Rome represents creditors with secured positions at various levels to protect and preserve their positions and maximize their recovery in Chapter 11 proceedings and out-of-court restructurings.  Our attorneys also represent potential purchasers interested in purchasing assets from Chapter 11 and Chapter 7 debtors.

We routinely assist companies defending against preference, fraudulent transfer, and in other bankruptcy litigations.  We also defend companies in the assertion of claims both in and out of bankruptcy court.

A Balanced Approach

We address financial and insolvency issues with lawyers experienced in litigation and as deal makers.  Our bankruptcy litigators and transactional lawyers regularly negotiate, structure, and document complex maritime financing transactions.  We understand the issues from both sides of the table.

Distressed business environments can provide good opportunities for strategic transactions.  We maximize successful outcomes for our clients by taking a pragmatic approach, combining practical experience and creative strategies that address the nuances of each representation.  We discreetly guide clients by providing risk assessment, and counsel them on alternatives, structure and completion of transactions, and litigation where appropriate.

Our general representation of borrowers, lenders, issuers, underwriters, servicers, bondholders, trustees, and other parties involved in private, public and project financing, lending, leasing and securitization transactions, coupled with our significant litigation capabilities, allow us to offer our clients a highly sophisticated set of legal solutions.
 



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