U.S. Shipping Corp, formerly known as U.S. Shipping Partners L.P., announced it has emerged from Chapter 11 bankruptcy protection pursuant to the Third Plan of Reorganization approved by the U.S. Bankruptcy Court for the Southern District of New York on October 1, 2009.
"We are very pleased to be out of Chapter 11," said Joseph Gehegan, President and Chief Executive Officer. "We accomplished the goals we set out at the beginning of this process: maintain business as usual through the reorganization, reduce our debt and emerge in an expedited manner with a sustainable capital structure."
Under the plan as implemented, $100m of second lien debt was extinguished in exchange for 45% of the equity of U.S. Shipping Corp and the principal amount of the first lien debt was reduced to $300m at an improved rate of interest. The holders of the first lien debt received 45% of the equity of the company, and 10% of the equity has been set aside for management. The existing and outstanding common units, subordinated units and general partnership interests of the U.S. Shipping Partners L.P. were cancelled and receive no recovery.
As announced previously, in conjunction with its emergence from Chapter 11, U.S. Shipping Corp appointed Joseph Gehegan as President and Chief Executive Officer, Al Bergeron as Vice President -- Chief Financial Officer and Jeffrey Miller as Vice President -- Chartering. Pursuant to the Plan, a new Board of Directors was appointed.