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In an Order issued December 19, 2011 by the Bankruptcy Court for the Southern District of Texas in the Omega Navigation Enterprises, Inc. (Omega) chapter 11 cases, Judge Karen Brown has denied motions to dismiss or convert Omega’s chapter 11 cases or for relief from stay filed by Omega’s Senior Lenders and supported by Omega’s Junior Lenders and Unsecured Creditors’ Committee. In the view of Lloyd’s List, a leading industry publication:
Omega Navigation Enterprises has scored a landmark victory in its Chapter 11 battle against senior lender HSH Nordbank in Houston, setting an extraordinary precedent for other foreign shipping companies seeking refuge from unpaid banks through the US bankruptcy courts.
The full article from Lloyd’s List can be found HERE.
As noted in two recent postings on this blog, Bracewell is serving as chapter 11 debtors’ counsel to Omega and another global shipping company, Marco Polo Seatrade BV. The two postings can be found HERE and HERE. Because of our involvement in Omega, as well as the potential for an appeal, Bracewell expresses no view as to the merits of the Court’s decision. Instead, we simply note that, as discussed in the foregoing two links, the Bankruptcy Court for the Southern District of New York also denied similar motions in the Marco Polo chapter 11 cases. Taken together, and if Omega is upheld on appeal (the Marco Polo appeal period has already expired), both Omega and Marco Polo reaffirm the availability of chapter 11 as an option for reorganizing primarily foreign global shipping businesses. We will also provide a second update once the Court issues its full opinion in support of the Order.
P.S. On the same day, the Court also issued an Order to show cause as to whether the Senior Lenders and its counsel, the Junior Lenders and the Creditors’ Committee should be sanctioned for certain conduct in connection with the litigation. Our separate blog entry on the Court’s Order to show cause can be found HERE.
© 2012 Bracewell & Giuliani LLPAbout the Author
