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Hanjin Shipping Company Bankruptcy Leaves Ships Stranded at Sea

Posted on in Corporate Bankruptcy

Hanjin Shipping Company Bankruptcy Leaves Ships Stranded at Sea

South Korean shipping giant Hanjin Shipping Co. filed for bankruptcy in August 2016. Since its filing, the company has run into many issues with ports around the world. Many refused Hanjin ships access to their docks, leaving ships and their cargo stuck in the ocean, waiting for further instruction. In many of these cases, the ports refused the ships' access because they feared Hanjin Shipping Co. would not pay them for the use of their properties.

Bankruptcy can leave workers at all levels of a company feeling like they are “in limbo.” This feeling can extend to all parties who do business with the bankrupt entity, such as its vendors, its partners, its customers, and its shareholders.

Bankruptcy Affects Everybody Involved with a Company

In Hanjin's case, the crews of the ships ordered to remain at sea are stuck. Many left their origin ports and followed their assigned tasks without realizing the company had filed for bankruptcy. In most cases, the crew of a ship ordered to refrain from docking must stay on board unless there is a medical emergency that requires them to disembark. Although the crews of Hanjin's chartered ships have food, personal items, and contact with parties on land, they are in essence, trapped on their ships for now. Some ships were seized by Hanjin's creditors and others were permitted to drop anchor near their intended port cities, waiting for further instruction.

There is hope for these crews, though. In September 2016, the chairman of Hanjin Group ordered that $36 million be transferred to Hanjin Shipping to cover the costs of unloading its ships. Although this is a start to resolving the present issues, it is far from the end of Hanjin's financial troubles. Regulators warned that it will take “considerable time” to secure all the funding necessary to unload Hanjin's stalled ships and resolve its financial obligations. The company's largest shareholder is Korean Air, which recently approved a plan to lend Hanjin 60 billion won in exchange for its share in Los Angeles' Long Beach Terminal as collateral. This shareholder in particular was cited as needing a considerable amount of time to get the money together to provide this loan, which still will not cover all of Hanjin's debt. When the company filed for bankruptcy, it was in debt approximately $5.4 billion.

Work with an Experienced Huntley Bankruptcy Lawyer

If you are a business owner considering filing for bankruptcy, first research all of your options. Bankruptcy is a tool, not a magic bullet that can resolve all of your financial problems. Speak with an experienced bankruptcy lawyer about your situation to explore your options and determine the most productive way to proceed with your case. To get started, contact our team of experienced bankruptcy lawyers at Newland & Newland, LLP today to schedule your initial consultation in our office. We serve clients in the North Chicago, Fox Lake, Zion, Winthrop Harbor, Waukegan areas from out our office located in the prestigious 180 North LaSalle street building in Chicago.

(image courtesy of Emily Beeson)

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