Court confirms Marco Polo Seatrade Chapter 11 protection and frees vessel

The New York Court supervising the reorganisation of Marco Polo Seatrade and its group affiliates has rejected the motions filed by the Royal Bank of Scotland and Credit Agricole seeking to dismiss the group's US Chapter 11 filings. Both lenders had asserted that Marco Polo Seatrade was not eligible for Chapter 11 protection and had indeed initiated its Chapter 11 case in bad faith. The court rejected all of the lenders' arguments.

Antonio Zacchello, MD of Marco Polo Seatrade, says, "We are delighted that the court has confirmed that we acted in accordance with the law and in good faith in starting our Chapter 11 proceedings. We now look forward to developing the Chapter 11 reorganisation plan, preferably on a consensual basis with our lenders and creditors that will enable us to emerge from Chapter 11 as a strong and healthy competitor in the global shipping market."

Marco Polo Seatrade has reached an agreement with Credit Agricole to release the 115,000 dwt aframax tanker Montiron from arrest and return it to operations. Credit Agricole’s arrest of the Montiron on July 21, 2011 was one of the precipitating factors for Marco Polo's Chapter 11 filing. Marco Polo Seatrade is confident that it can resume its day-to-day activity in the pool within the next few days. This consensually resolves the litigation begun by Marco Polo against Credit Agricole relating to the release.

The return to operations of the Montiron is the latest in a string of consensual agreements reached by Marco Polo Seatrade with its lenders in its Chapter 11 proceedings. This includes Marco Polo's continued use of its lenders' cash collateral and its ability to obtain additional ‘debtor in possession’ financing from the Royal Bank of Scotland.

Marco Polo Seatrade will now continue to focus its efforts on emerging from Chapter 11 within a short period time and to provide a safe and reliable service to its clients.

Marco Polo Seatrade opts for Chapter 11 protection

Netherlands-based Marco Polo Seatrade BV, a company managed by Seaarland Shipping Management BV, has filed a voluntary petition for Chapter 11 reorganisation in the Southern District of New York in the United States.

The company believes that the Chapter 11 filing will help it complete a restructuring process designed to restore the company to long-term financial health. To help facilitate this restructuring, associated companies Seaarland Shipping Management BV, Magellano Marine CV and Cargoship Maritime BV have also begun co-ordinated Chapter 11 proceedings. Vessel operations and management services provided by the companies will meanwhile continue in the ordinary course of business.

As a result of the Chapter 11 filings, all creditor actions throughout the world, including any attempts to enforce claims against the companies' vessels, are automatically enjoined from proceeding while the companies reorganise their businesses.

The Chapter 11 filings are part of a long-term restructuring initiated in 2010 when the companies were hit by a sudden and dramatic drop in the shipping markets. During the past 12 months, enormous progress has been made as part of a commercially driven restructuring process but, notwithstanding important goals being reached, certain companies’ senior lenders unilaterally reversed their support for these restructuring efforts and started enforcement actions. The companies were therefore compelled to initiate Chapter 11 proceedings to halt those actions and to ensure the uninterrupted operation of vessels and services to their customers.

The companies are disappointed in the lenders’ unexplained reversal of support but remain positive in their belief that the steps taken will be of benefit to all their creditors, including the senior lenders.

The companies want to assure their customers and suppliers that Marco Polo Seatrade and associated entities will continue to operate in the ordinary course of business during the Chapter 11 proceedings and that other affiliated entities such as Seaarland (Singapore), Seaarland (Hamburg), Seaarland (Mumbai), Global Tanker, SynerGas and Motia have not filed for Chapter 11 protection and will continue in the ordinary course of business

The Chapter 11 filings include the following vessels: Montiron, Diana, Laura, Beth, Louise, Meg.

Seaarland’s principal legal adviser for the restructuring process and Chapter 11 proceedings is Bracewell and Giuliani LLP.

Further information about the Chapter 11 filing will be available shortly at www.seaarland.nl