On 2 September 2016, Hanjin filed a petition under Chapter 15 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of New Jersey, seeking recognition of its Korean rehabilitation proceedings as a "foreign main proceeding." Hanjin also sought provisional and final relief to prevent creditors from taking enforcement actions against Hanjin's interests within the jurisdiction of the United States.
The Bankruptcy Court granted this request on an interim basis, through an interim provisional order dated 6 September 2016. After a further hearing on the scope of this interim relief, the Court issued an order granting provisional relief to Hanjin on 9 September 2016 (the Provisional Order). The Provisional Order grants significant protection to Hanjin-owned and leased assets, but also includes certain carve-outs.
The Provisional Order forbids arresting or attaching any vessel or other transportation equipment that is owned, operated by or chartered to Hanjin. Various parties asserting maritime liens against Hanjin-chartered vessels sought reconsideration of this aspect of the Provisional Order, and pursued an emergency appeal to the District Court. Both requests were denied. However, in denying reconsideration, the Bankruptcy Court stated that "once these vessels are no longer under charter by the Debtor, they will not be protected by the stay and the Maritime Lienholders would be able to enforce their [in rem] liens against such vessels in the United States." These maritime lien interests also appealed the District Court decision to the Court of Appeals for the Third Circuit, seeking to stay the Bankruptcy Court's prohibition of vessel arrest. That appeal remains pending, but the Court of Appeals has preliminarily indicated that it may lack jurisdiction to entertain the appeal.
In addition to the restraint against arrest or attachment of vessels, the Provisional Order broadly prohibits taking or continuing any act to create, perfect, or enforce a lien or other security interest in Hanjin assets, or any asset or property chartered, leased, managed or operated, but not owned, by Hanjin that is located in the territorial jurisdiction of the United States. However, the Provisional Order provides an exception that none of these provisions impairs the creation or continued existence of possessory liens over Hanjin assets, including but not limited to containers.
A further hearing on whether to grant final recognition of the Korean rehabilitation proceedings has not yet been scheduled.
Hanjin Shipping - Current Jurisdictional Status And Options - United States Of America
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