Genco Shipping among Top 10 Bankruptcies of 2014

Peter Georgiopoulos’s Genco Shipping & Trading Ltd., an operator of dry-bulk cargo ships, steamed into the No. 3 berth on the Top 10 List for 2014 when it filed for chapter 11 protection on April 21, 2014, in the Southern District of New York with nearly $3 billion in assets and $1.5 billion in debt.

According to Jones Day composition of the Top 10 List of public bankruptcy filings for 2014 weakness in charter rates made it difficult for the company to pay its creditors.

 The shipping industry has suffered from a glut of vessels after buying too many before the 2008 global recession, driving down rates and saddling companies like Genco with too much debt. Genco emerged from bankruptcy on July 9, 2014, after the court confirmed a prepackaged chapter 11 plan that slashed the dry-bulk shipper’s debt load by $1.2 billion. 

Under the plan, lenders swapped $1.06 billion in debt for 81.1 percent of the equity in the reorganized company.

The New York-based company, with 1,518 employees is engaged in the worldwide ocean transportation of dry-bulk cargoes, including iron ore, coal, grain, and steel products, with a fleet of 53 vessels.  

The company said in a statement today that it will cut about $1.2 billion in debt through a bankruptcy process that won’t hinder shipments or affect operations.

The shipping industry had suffered from a glut of vessels after buying too many before the 2008 global recession, driving down rates and saddling companies with debt.