The U.S. District Bankruptcy Court in Newark, N.J. will hear from companies today that said Hanjin is not “promptly” informing creditors when ships go off charter.
Hanjin Shipping is being accused of not complying with an order by a federal judge 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.
That is one of the issues that is expected to be discussed at a hearing today at the U.S. District Bankruptcy Court in Newark, N.J.
Attorneys for creditors – including fuel suppliers Glencore and OceanConnect Marine, the container leasing company SeaCube, and chassis leasing company TRAC Intermodal – said they were not told that one of the ships Hanjin was chartering, the Seaspan Efficiency, went off charter from Oct. 15 to Oct. 18, despite an order by Judge John K. Sherwood that said the foreign representative of Hanjin Shipping, which is the company’s chief executive officer, “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 creditors are asking Sherwood to clarify its orders saying “‘Promptly’ can’t possibly mean 3 days.”
In their court submission, the attorneys said the Seaspan Efficiency arrived in New York at around 7 p.m. on Friday, Oct. 14, “sped to Maher Terminals” in Elizabeth, N.J., unloaded its cargo, then sailed from New York harbor several hours later, a little after midnight in the early morning hours of Oct. 15.
The attorneys said that despite their repeated requests, the “foreign administrator” of Hanjin, refused to provide information about whether the ship was going off charter and that Hanjin Shipping’s bankruptcy attorney even accused OceanConnect’s Attorney Stephen Simms of harassing them about the Seaspan Efficiency.
Simms says he was not notified that the ship went off hire until Oct. 18 and that the ship is now apparently on its way to be scrapped in India or Bangladesh, leaving OceanConnect “without any recourse to enforce its maritime lien in rem in the amount of at least $837,338.76, despite having to incur significant attorneys’ fees in order to attempt to enforce its maritime lien rights.”
The attorneys are now asking 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.
Meanwhile Sherwood is also being asked by the container chassis leasing company Flexi-Van that he cancel all per diem chassis pool agreements the carrier has with Flexi-Van and require it to pay liability insurance premiums as a condition of maintaining bankruptcy protection in the U.S.
Flexi-Van said it had multiple chassis pool agreements with Hanjin and the carrier owed it $3 million before it filed for bankruptcy. Those agreements required Hanjin to provide liability insurance, which Hanjin obtained from TT Club. On Oct. 10, TT Club terminated Hanjin’s insurance for failure to pay premiums, and Flexi-Van said Hanjin’s insurance will be cancelled retroactively to April 1, 2016.
Flexi-Van says Hanjin has breached its per diem pool-user agreements by not paying the insurance premiums, that Hanjin has utilized thousands of its chassis for deliveries, that thousands remain in the field, and that those chassis “will not be adequately insured against liability for personal injury or property damages.”
Phil Connors, executive vice president at Flexi-Van, said his company was making the request as a practical and “prudent” step. He did not know of any accidents involving Flexi-Van equipment, but noted it was “not out of the realm of possibility,” as an equipment provider might not find out its equipment was involved in an accident until a year after the fact, sometimes just as the statute of limitations expires.
While the number of Hanjin containers on Flexi-Van chassis has dropped significantly in many parts of the country – at the Chicago Ohio Chassis Pool, Flexi-Van only had 35 chassis with Hanjin containers on them yesterday compared to 720 on Sept. 12 – there are still large numbers of Hanjin containers on chassis in Southern California.
Connors said there are 6,848 chassis from all three of the chassis providers in the Los Angeles-Long Beach area “pool of pools” – Flexi-Van, TRAC Intermodal and Direct ChassisLink Inc. (DCLI) – that have Hanjin containers on them. That’s a significant share of the 72,500 chassis in the “pool of pools.”
Noel Hacegaba, managing director and chief commercial officer at the Port of Long Beach, said plans for two sites in the “Inland Empire” area about 50 miles from the ports of Los Angeles and Long Beach to accept Hanjin-leased containers “fell through two weeks ago.”
However, Hacegaba said Pier T in Long Beach, which is operated by Total Terminals International (TTI), a company mostly owned by Hanin, began accepting empty Hanjin-owned containers Oct. 12 and continues to accept empty Hanjin leased containers that have a booking number. “This, in combination with the chassis providers fixing bad order chassis at a faster clip and injecting additional chassis into the pool of pools, has helped to bring some relief to the chassis supply in Southern California,” he said.
Companies accuse Hanjin of not complying with court order
