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Sobelmar gets US court protection

25 Mar 2015 15:22 GMT

'Business as usual' for Sobelmar as US court issues an order preventing the arrest of its vessels.



Sobelmar Antwerp has announced that, in connection with its Chapter 11 proceedings in Hartford, Connecticut, the court has granted all of the interim relief that Sobelmar requested. This includes for the M/V Brasschaat, the M/V Vyritsa, the M/V Kovdor and the M/V Zarachensk:

- The right to continue to operate and pay all voyage and operating expenses in the ordinary course

- The right to continue to pay employees and crew in the ordinary course

- The right to continue all cash management procedures in the ordinary course

- The right to continue to maintain all insurance in the ordinary course

In a statement, an unnamed spokesperson for Sobelmar is quoted as saying: "It is business as usual for our vendors, customers and charter parties. We have been authorised to continue to pay all of our operating expenses in the ordinary course of business and to honor all of our existing and new charter commitments without risk of business interruption or vessel arrest. We thank our many industry friends for their continuing business with us as we move forward towards a speedy emergence from Chapter 11 as an even stronger business for many years to come."

The company also provided the following list of answers to "frequently answered questions":

Why did Sobelmar file for Chapter 11?

Despite our success over the past several years in implementing our business plan and our continued servicing of our vessel debt service, we were unable to reach an agreement concerning our future debt repayments. We believe that the Chapter 11 process will help facilitate a restructuring, which is designed to continue Sobelmar as a strong, profitable shipping business. We are already working closely with our vessel lender and are confident that the process will be successful and we will emerge as an even stronger, more competitive company.

Can charter customers be confident to continue chartering Sobelmar's vessels and that there will be no delays or complications with respect to the shipping and delivery of their cargo?

Absolutely. Our Chapter 11 restructuring is the result of our debt repayment schedule, not any defaults or difficulties with respect to vessel charters or the timely of vessel cargoes. Our vessel operations remain 'business as usual' and we look forward to continuing our excellent relationships with our charter parties and our cargo customers.

How are charter customers protected from potential vessel arrests and other possible interruptions in service?

You are protected in two critical ways. First, Chapter 11 serves as an 'automatic stay' of any creditor enforcement actions, meaning the US Court has issued an order with worldwide effect that prevents persons from arresting our vessels or disrupting our services. Second, because the US Court has authorised us to continue to pay our suppliers, vendors, port charges and other operating expenses in the ordinary course of business, and because we are also authorised to continue to maintain all necessary insurance coverage and class and other certifications, there is no basis for any person to seek to arrest our vessels or disrupt our services even if they were not prevented from doing so by Chapter 11.

Will suppliers continue to be paid for goods and services provided after the Chapter 11 filing?

Absolutely. US law gives administrative priority to payments for goods and services received after the Chapter 11 filing and Sobelmar is both fully able to and completely committed to paying its suppliers and other operating expenses in the ordinary course of business.

What about unpaid supplier invoices for goods and services provided before Sobelmar filed for Chapter 11 reorganisation?

Sobelmar greatly values our excellent relationships with our vendors and charter parties and with the full cooperation of our lender, Sobelmar has already obtained approval from the US Court to pay our pre-Chapter 11 invoices in the ordinary course of business on ordinary credit terms.

Does Sobelmar have enough cash to stay in business?

Absolutely. We already have a consensual agreement in place with our lender that has received approval from the US Court to continue in the ordinary course to pay employees and crew, to maintain all insurance and to continue to operate and pay all operating expenses – all without the need to borrow any new funds.

So what does Sobelmar intend to accomplish through its Chapter 11 filing?

Sobelmar has been in business for more than 20 years and, through our Chapter 11 filing, we intend to continue to remain in business as an even stronger, more competitive industry participant. We thank all of our charter customers, vendors, suppliers, employees and crew for their support and look forward to continuing our relationships with them for many years to come.

Sobelmar's principal legal advisor for the restructuring process and Chapter 11 proceedings is Bracewell & Giuliani LLP, with the Hamburg-based Falkenberg Law Office continuing to provide normal course corporate and maritime legal services. Sobelmar's financial advisor is Odinbrook Global Advisors LLC.




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