A second bulker controlled by George and Stathis Gourdomichalis has been seized as a Danish charterer pursues an eight-figure arbitration award stemming from a four-year-old abandoned ship case.
Freshly unsealed court papers show the 30,778-dwt Fearless (built 2001) was arrested in Houston after Pacific Gulf Shipping Co filed a lawsuit in February against a slew of companies connected to the Gourdomichalis brothers.
It is the second such court action by the charterer. As TradeWinds reported, the first seized the 52,500-dwt Vigorous (built 2005) in Portland, Oregon, in December.
"[The] Vigorous is only estimated to have a value of approximately $9.72m and, therefore, does not fully secure [Pacific Gulf's] claim for damages of nearly $24m," the unsealed court papers read.
Globe-spanning legal fight
Houston is the latest stop in a legal saga that has spanned the globe and started in late 2014. Then, the now-scrapped 73,500-dwt Adamastos (built 1995) was found to have more than 40 deficiencies by Brazilian authorities while taking on a load of soybeans set for Japan and Singapore.
Port state officials ordered the ship held, but the next day the Adamastos — chartered to Pacific Gulf, then subchartered twice — broke free of its moorings and ran aground.
The ship was declared abandoned in January 2015 and there were complaints of a lack of food from the crew.
Claims were filed up the charter chain, eventually hitting Pacific Gulf with a multimillion-dollar bill.
At arbitration in London, Pacific Gulf won the right to collect $19.2m from Adamastos Shipping & Trading, the ship's registration company.
Pacific Gulf then worked to seize the Gourdomichalis-connected Vigorous, first in South Africa, where it was denied, then in Portland, where it succeeded.
The Vigorous is now sailing again after Vigorous Shipping & Trading, another registration company, posted a $9.5m bond.
Much of Pacific Gulf's Houston lawsuit covers the same ground as its earlier Portland suit. It alleges Blue Wall Shipping & Trading, Phoenix Shipping & Trading and the ship registration companies involved are dominated by the Gourdomichalis brothers and that Pacific Gulf should be able to collect from them what they were awarded from Adamastos.
But the new lawsuit, filed after discovery in the Portland case, also reveals details of the companies' arrangements and the state of the Adamastos before its abandonment.
Phoenix, the complaint alleges, is majority owned by the brothers through two other companies, Thalassa and Alastor. The 12.5% the brothers do not own is held by George Gourdomichalis' son, through a company called Golden Hind.
The lawsuit claims the Adamastos’ mortgage was a “complex financing scheme” that meant the brothers would pay very little yet still take control of the ship.
The defendants believe that the veil piercing allegations are baseless and intend to fight them vigorously
Blue Wall attorney Bruce Paulsen
And when they did in December 2012, the lawsuit states they never made a single quarterly payment before abandoning it. Further, it says in March 2014, before the ship was chartered to Pacific Gulf, its registration company had just $6,453 in its account.
The other shareholders in Blue Wall — which according to the company's corporate disclosure includes BlackRock with a 16.6% position — are just financiers that hold mortgages on its ships, the lawsuit says.
The complaint also alleges communication with Blue Wall is routed through Phoenix.
“The defendants believe that the veil piercing allegations are baseless and intend to fight them vigorously," Blue Wall attorney Bruce Paulsen of Seward Kissel said.
As it stands, the Fearless is anchored in the Gulf of Mexico off Galveston.
The ship was nearly freed in mid-March, court documents show, after attorneys for the Gourdomichalises argued that one of the companies down the charter chain had not yet held Pacific Gulf liable.
That same day, Pacific Gulf filed an emergency motion for reconsideration. The judge reversed his original decision.
Last Friday, the court heard arguments on a second motion to reconsider, this time from the Fearless' registration company.
According to VesselsValue, the Fearless is worth $5.3m.