SEOUL Central District Court, the one handling Hanjin Shipping's receivership, has said a rehabilitation plan is "realistically impossible" if top priority debt such as backlogged charter fees exceed KRW1 trillion (US$896 million), reports South Korea's Yonhap newswire.
Hanjin rehabilitation 'realistically impossible', says Seoul Central District Court SEOUL Central District Court, the one handling Hanjin Shipping's receivership, has said a rehabilitation plan is "realistically impossible" if top priority debt such as backlogged charter fees exceed KRW1 trillion (US$896 million), reports South Korea's Yonhap newswire. Top priority debt means claims for public interests, which are paid first to creditors and include cargo owners' damages and unpaid charter fees, Yonhap reported citing the Seoul Central District Court. Hanjin Shipping, the world's seventh-largest container carrier, filed for receivership late last month in a South Korean court and must submit a rehabilitation plan in December. With debt of about KRW6 trillion at the end of June and the South Korean government's unwillingness to mount a rescue, expectations are low that Hanjin Shipping will be able to survive, Reuters reports. Backlogged charter fees that occurred after Hanjin Shipping's court receivership have topped KRW40 billion, while cargo owners' claims for damages are expected to begin in earnest after three to four weeks have passed from original delivery schedules, the report said. Hanjin has begun returning chartered ships to their owners and is trying to secure enough funds to help unload an estimated $14 billion in cargo initially trapped on its ships around the world. The company had a total of 141 vessels, including 97 containerships as of early September. Out of the 97 containerships, 60 were chartered and 37 owned by Hanjin. Dozens of ships remained anchored off ports while Hanjin tries to secure funds to unload them and to arrange court protection from creditors seizing them for unpaid bills. Some face other challenges to unload their cargos as thousands of containers pile up, creating havoc ahead of the crucial holiday shopping season.
