Bank questions ISH deal terms for MPP sale
Capital One's lawyers say sale to Oslo Bulk is not adequate to protect its claim against International Shipholding.
Capital One has filed an objection to terms of International Shipholding (ISH)'s plan to sell a multipurposeship to Oslo Bulk, the vessel's bareboat charterer.
The US bank's lawyers claim the deal to sell the 13,000-dwt Oslo Wave (built 2000) does not provide sufficient protection of its claims against the Alabama shipowner, which is undergoing a Chapter 11 restructuring in a US Bankruptcy Court in New York.
But the the attorneys at law firm McGlinchey Stafford say negotiations with ISH are ongoing and the bank is optimistic they will result in an agreement between the bank and the diversified shipowner.
Mortgage holder
Capital One holds a mortgage on the MPP and has claims totalling $5.92m against Erik Johnsen-led ISH.
As TradeWinds reported last week, ISH is asking a US judge to approve the sale of the Oslo Wave to Norway's Oslo Bulk for $3.3m. The company's lawyers are also asking to formally tear up the bareboat charter contract for the ship.
"[The] debtors seek to sell the Oslo Wave for a price that does not appear to adequately protect Capital One’s interests in the Oslo Wave, the bareboat charter, its related contracts and their collective proceeds," wrote McGlinchey Stafford.
Below market?
Among Capital One's complaints, ISH failed to explain the discrepancy between the sale price and the ship's appraised value of $4.4m to $4.6m, the lawyers argue.
And they contend that the terms do not ensure that the bank will immediately receive the sale proceeds.
But ISH financial advisor Blackhill Partners told the court Friday that marketing efforts for the Oslo Wave before the company filed for bankruptcy protection did not result in offers that were adequate. Efforts to sell the vessel after the Chapter 11 filing received even less interest.
"Although the Oslo Wave was marketed both individually and as part of all proposals with respect to the sale of the various business segments of the debtors, no offers were received for the purchase of the Oslo Wave other than the buyer's proposal," said Blackhill managing director Laurence Gurley.
