By Mark Edward Nero
Roughly half of Hanjin Shipping’s container vessels have been blocked from ports since the South Korean firm filed for bankruptcy protection last week, according to a report by news agency Reuters.
The number of vessels stranded just offshore includes three near the Los Angeles-Long Beach port complex, while one was stranded near the Port of Prince Rupert in British Columbia.
Hanjin, the world’s seventh largest container carrier, filed a receivership application with the Seoul, South Korea Central District Court on Aug. 31 seeking court receivership after losing the support of financial institutions that had been providing it credit.
The company also stopped accepting new shipments in the wake of the filing, including at the Port of Long Beach’s Total Terminals Intl., in which Hanjin owns a majority stake.
In a statement, the Long Beach Board of Harbor Commissioners said the port was engaged in “round-the-clock monitoring” of the situation.
A South Korean receivership in many ways parallels US receivership and bankruptcy procedures, according to receivership law specialist Richard Ormond.
“Because many of Hanjin’s customers are located in the United States, i.e. businesses that manufacture overseas and import their goods here, there will be a need for a parallel US based legal proceeding,” Ormond explained. “Otherwise their goods and the Hanjin assets will be subject to the proceeding in South Korea—possibly denying US located creditors their due process.”
A judge in California has already ordered the arrest of the containership Hanjin Montevideo in Long Beach over unpaid fuel bills totaling $488,750 owed to World Fuel Services, according to Reuters.
Lawyers acting for two other firms applied to a court in California on Aug. 31 to have Hanjin's assets in the US, including cash and property totaling more than $3 million, seized to pay outstanding rental payments on two Hanjin ships.