Bankruptcy Trumps Admiralty

Monday, August 15, 2005
The U.S. Court of Appeals for the Second Circuit ruled that a bankruptcy court may extinguish maritime liens on vessels where the lienors are before the court, even though the ships are not within the jurisdiction of the court. A shipowner filed for reorganization under Chapter 11 of the Bankruptcy Code. Defendant financial institutions, which held preferred ship mortgages, succeeded in getting the court to convert the action into an involuntary bankruptcy under Chapter 7. Plaintiff lienors filed maritime lien claims and contended that the bankruptcy court lacked authority to extinguish liens on ships that were not within the jurisdiction of the court. The bankruptcy court offered plaintiffs the opportunity to withdraw from the proceeding. After plaintiffs elected to remain, the court ruled that the priority of the preferred ship mortgages was superior to that of the various lien claims. Plaintiffs appealed. The appellate court held that the congressional grant of subject matter jurisdiction to district (and bankruptcy) courts to adjudicate in bankruptcy all property, wherever located, extends to ships that have not been arrested within the court’s jurisdiction and, in the circumstances, the bankruptcy court had equitable jurisdiction to extinguish the lienors’ maritime claims. In re Millenium Seacarriers, Inc., No. 04-0631 (2nd Cir., HK Law).
Maritime Reporter June 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Legal

K&L Gates Welcomes Martinko

The Washington D.C., office of global law firm K&L Gates LLP has welcomed Stephen Martinko as a government affairs counselor in the public policy and law practice.

ST Marine Launches First LMV for RSN

Singapore Technologies Marine Ltd (ST Marine), the marine arm of Singapore Technologies Engineering Ltd (ST Engineering), held the Launching ceremony for the first

Antwerp Joins “One Belt, One Road” Taskforce

“One Belt, One Road” is a Chinese development strategy launched at the end of 2013 that focuses on connectivity and cooperation among countries primarily in Eurasia.

Finance

Navis N4 TOS Open in Liverpool Terminal

Peel Ports, owners and operators of the Port of Liverpool, has achieved a major milestone in its multi-million investment program to transform the port into Europe’s

AkzoNobel’s Carbon Credits Methodology Wins Award

AkzoNobel’s landmark carbon credits methodology for the shipping industry has won the Best Offsetting Project award in the 2015 Voluntary Carbon Market Rankings.

FSL Trust Inks Tanker Contracts

FSL Trust Management Pte. Ltd., as trustee-manager of First Ship Lease Trust announced new time charter agreements for FSL Shanghai, FSL Hamburg and FSL Singapore.

 
 
Maritime Contracts Maritime Security Offshore Oil Pipelines Pod Propulsion Ship Electronics Ship Repair Ship Simulators Sonar Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1817 sec (6 req/sec)