Many US creditors of Hanjin Shipping are opposing plans to sell Hanjin’s 54% stake in Total Terminals International (TTI), which runs the biggest container terminal in Long Beach, California. The putative buyer is an MSC subsidiary, which already owns 46% of the relevant terminal.
The sale has been approved by a court in Seoul, but it also needs approval in the US Bankruptcy Court in Newark, New Jersey. Some US creditors claim that their rights are being affected by the sale and in papers filed last week urged Judge John Sherwood to either reject or heavily modify the proposed sale.
Geneva-based container operator Mediterranean Shipping Co (MSC) has offered $78m for the terminal. Hanjin said this was the highest and best offer, following a competitive bidding process. A hearing on the sale is scheduled for today, January 12th.
Companies owed money from leasing tens of thousands of containers to Hanjin before it filed for bankruptcy said there were “many questions unanswered with respect to the sales process” and that it was unclear whether the proceeds would be used to repay them for the significant financial losses they have suffered. Lawyers for the container lessors claim that Hanjin is continuing to use those containers but had not paid rent or any other charges.
Other creditors cited what they said were major holes in Hanjin’s argument that the proposed $78m deal was the best offer available. They want the judge to hold any proceeds from the sale in escrow in the US and to use the money to repay US creditors. Lawyers for the creditors are also seeking to compel Hanjin to reveal more information about how the sale process was conducted.
In December Judge Sherwood ordered the company to disclose a significant amount of new information about its US assets, including their estimated value and location. He also called for a separate report on all funds recently transferred from the US to South Korea.
Last week Hanjin estimated the value of its US assets, including the Long Beach terminal operator and property it owns in New Jersey and Georgia, at about $130m. The report also disclosed that about $82m in accounts receivable has been transferred out of the US since the company sought bankruptcy protection at the end of last August.