Seoul Central District Court, or the Korean bankruptcy court handling rehabilitation proceedings of Hanjin Shipping Co., Ltd. (Hanjin Shipping) recently took several noteworthy measures. Pursuant to the Court's decision, the fate of Hanjin Shipping will not be unraveled until February next year. The upcoming dates and deadlines for extended time pursuant to the aforementioned decision are as follows:
- Extended deadline for the claim inspection period: December 5, 2016Remarks: It won't be until after the claim inspection period that whether the claims reported last month will be accepted or rejected will be determined.
- Extended deadline for submission of inspection report: December 12, 2016Remarks: The going concern value and the liquidation value to be stated on the inspection report will serve as adecisive factor in evaluating whether rehabilitation proceedings of Hanjin Shippingmay continue.
- Extended deadline for submission of draft of rehabilitation plan: February 3, 2017Remarks: Rehabilitation plan will be submitted if and only if the going concern value turns out of be greater than the liquidation value in the inspection report.
Some progress has been made in the rehabilitation proceedings as Hanjin Shipping's Asia-U.S. route assets have been taken over by Korea Line Corporation, a subsidiary of Samra Midas Group, on November 21, 2016 following appointment as preferred bidder on November 14, 2016. Korea Line Corporation had expressed intent to purchase Hanjin Shipping's 54% stake in Long Beach Terminal International LLC, but sale of the stake is subject to further discussions with Hanjin Shipping and Mediterranean Shipping Company S.A. with the remaining 46% stake in the target company. While the disposed assets constitute substantial portion of Hanjin Shipping's business assets, there still remain considerable assets (including the aforementioned 54% stake in Long Beach Terminal International LLC) to be disposed, and the media has made speculations that the Court's main intent behind the slowing of timeline of the rehabilitation proceedings is to secure additional time to sell remaining assets.
We will come back with more info to follow up as the rehabilitation proceedings progress if we deem it necessary to alert you.
Originally published in Insolvency Legal Update November 2016
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