• ITVI.USA
    16,014.360
    14.660
    0.1%
  • OTLT.USA
    2.799
    -0.006
    -0.2%
  • OTRI.USA
    22.430
    0.240
    1.1%
  • OTVI.USA
    15,995.600
    10.280
    0.1%
  • TSTOPVRPM.ATLPHL
    2.930
    -0.020
    -0.7%
  • TSTOPVRPM.CHIATL
    3.620
    0.010
    0.3%
  • TSTOPVRPM.DALLAX
    1.330
    -0.040
    -2.9%
  • TSTOPVRPM.LAXDAL
    3.570
    0.020
    0.6%
  • TSTOPVRPM.PHLCHI
    2.390
    0.070
    3%
  • TSTOPVRPM.LAXSEA
    4.130
    0.020
    0.5%
  • WAIT.USA
    127.000
    0.000
    0%
  • ITVI.USA
    16,014.360
    14.660
    0.1%
  • OTLT.USA
    2.799
    -0.006
    -0.2%
  • OTRI.USA
    22.430
    0.240
    1.1%
  • OTVI.USA
    15,995.600
    10.280
    0.1%
  • TSTOPVRPM.ATLPHL
    2.930
    -0.020
    -0.7%
  • TSTOPVRPM.CHIATL
    3.620
    0.010
    0.3%
  • TSTOPVRPM.DALLAX
    1.330
    -0.040
    -2.9%
  • TSTOPVRPM.LAXDAL
    3.570
    0.020
    0.6%
  • TSTOPVRPM.PHLCHI
    2.390
    0.070
    3%
  • TSTOPVRPM.LAXSEA
    4.130
    0.020
    0.5%
  • WAIT.USA
    127.000
    0.000
    0%
American ShipperIntermodalWarehouse

NEWS FLASH: Judge denies Ashley Furniture’s request to freeze payments it owes Hanjin

Hanjin opposed Ashley Furniture’s motion for a freeze on the amounts it owes the carrier, along with a reduction in the amounts owed, saying in a court filing that if the motion was granted, its ability to reorganize would have been severely jeopardized.

   Judge John K. Sherwood of the U.S. Bankruptcy Court in Newark, N.J. denied a request by Ashley Furniture Industries Thursday afternoon to allow the furniture company to place an “administrative freeze on amounts it owes Hanjin Shipping” and reduce the amounts owed to Hanjin in recognition that the South Korean carrier has unilaterally changed contract terms.
   The court also granted a motion by creditors that requested they be immediately informed when a ship chartered by Hanjin is taken off charter so they can arrest those ships and obtain a lien.
   Ashley wanted court authorization to deduct $986.41 per container from amounts owed to Hanjin for furniture deliveries and for the money to be placed into an escrow account, pending a final reconciliation of damages incurred by the company due to Hanjin’s breaches in connection with those deliveries.
   Hanjin has not been delivering cargo to Ashley’s warehouses or the warehouses of Ashley’s customers as contracted, the furniture company explained, but “unilaterally changed all waybills with Ashley to port-to-port.”
   Hanjin opposed the Ashley motion, saying in a court filing that if the motion was granted, its ability to reorganize would be severely jeopardized. “That is because accounts receivable are the lifeblood of Hanjin, and if Ashley is permitted to withhold payment (i.e., “setoff” its pre-petition debt against alleged post-petition damages), Hanjin runs the risk that other customers owing past due (i.e., pre-petition) accounts receivable will follow suit,” the carrier said. “With approximately $40 million still due and owing in accounts receivable, such a result would deprive Hanjin of key liquidity and may cause Hanjin to be in default of its financing with Korean Airlines. The court should not condone such a result.”
   In addition, Hanjin said Ashley’s request to amend a protocol for beneficial cargo owners (BCOs) so they can obtain their cargo by allowing the furniture company to withhold payment for post-petition ocean cargo is not, in reality, a request to amend the BCO protocol at all. “Rather, it is a transparent attempt by Ashley to have this court decide that Hanjin allegedly breached its contract with Ashley post-petition and that, as a result, Ashley has damages it has suffered and may continue to suffer,” Hanjin said.
   Hanjin argued the U.S. Bankruptcy Court “cannot make that determination, however. Rather, Ashley’s claim for alleged post-petition damages is a claim for the Korean court, not this court, to decide.”
   Judge Sherwood held that Ashley and other beneficial cargo owners will have to file those post-petition claims with a court in Korea. He said both sides must uphold their end of a BCO protocol worked out in the court, which says in the event ocean freight is paid in full, Hanjin must release their cargo.
   In another matter, Judge Sherwood granted a motion by attorneys for fuel suppliers, container and chassis lessors, and tug boat companies that Hanjin immediately disclose of plans or events to take vessels off charter.
   The carrier was accused of not complying with an order to promptly notify creditors when a ship went off charter in order to prevent arrest of the vessel by creditors seeking to secure their claims.
   Attorneys for creditors, including fuel suppliers Glencore and OceanConnect Marine, the container leasing company SeaCube, and chassis leasing company TRAC Intermodal, said that they were not told that one of the ships Hanjin was chartering, the Seaspan Efficiency, went off charter Oct. 15. They said they were not informed until Oct. 18, despite an order by Judge Sherwood that the foreign representative of the company, who is Hanjin’s CEO, “promptly inform Movants’ counsel by electronic mail specifying the vessel name and the date or event (and time, if applicable) on which such vessel is scheduled to go off charter.”
   The attorneys today asked the court to inform them within one hour when a decision is made that a Hanjin ship calling the U.S. is going off charter. Judge Sherwood granted a motion by attorney Stephen Simms for immediate disclosure of plans or events to take vessels off charter.
   However, this still might not help maritime lien holders because it takes a minimum of three hours to file an arrest order and get a U.S. Marshall out to arrest a ship, and by this time, it will likely have already left U.S. waters.
   Given this, Simms asked the judge to allow him to file conditional arrest orders for vessels that would only go into effect in the event a ship goes off charter in U.S. waters, but was denied because filing even those conditional arrest orders would violate the stay.
   Meanwhile, Judge Sherwood will hear a request by the chassis leasing company Flexi-Van Oct. 25 that he cancel all per diem chassis pool agreements that Hanjin has with Flexi-Van and require the carrier pay liability insurance premiums as a condition of maintaining bankruptcy protection in the U.S.

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