COSCO Shanghai Shipyard has been allowed to sell a converted Eastwind Maritime bulker to recover an unpaid $10.5m bill owed to Cosco.
COSCO Shanghai Shipyard has been allowed to sell a converted Eastwind Maritime bulker that was sold to Sammy Ofer"s Draften in June, but which is physically at the yard, to recover an unpaid $10.5m bill owed to Cosco.
According to documents in the US Bankruptcy Court in New York, Cosco anticipates that sale proceeds of the ship, the EW Harting, will be substantially less than the amount due to it.
Judge Allan Gropper has lifted the automatic stay in force against Cosco under Eastwind"s Chapter 7 bankruptcy filing in June, so that the yard can re-start Chinese legal proceedings that were suspended following the bankruptcy.
The 1991-built, 29,999 dwt EW Harting, renamed EW Rhone, is one of the four single-hulled tankers converted to bulkers at the yard, under a 2008 contract with Eastwind.
Nordea Bank repossessed and sold 13 Eastwind ships, including the EW Harting, to Draften a day before the bankruptcy. Eastwind included the 13 in its assets when it filed for bankruptcy, but subsequent legal action allowed Draften to retain title over them.
Cosco, which already had invoked a contractor"s lien on the ship, asked the judge two weeks ago to allow it to hold on to the ship even though Eastwind has no equity in it, because of the company"s contractual obligation.
According to the New York order, the path is now clear for the ship to be sold by the Chinese maritime court.
The EW Harting auction would continue the disposal of Eastwind ships in various jurisdictions around the world by other creditors who reached similar agreement with Salvatore LaMonica, the trustee appointed to oversee Eastwind"s liquidation.
One comparable deal was the $5.3m auction sale of the 1985-built, 29,462 Yarmouth in New Orleans two weeks ago.