We refer to our previous Industry News update dated 14 December 2016, relating to Hanjin Shipping. Since that update, the Seoul Central District Court has given notice (on 2 February 2017) of its decision to discontinue the rehabilitation proceedings of Hanjin Shipping. The reason given by the Court is that Hanjin Shipping’s liquidated value is greater than its value as a going concern.

The Court’s decision to discontinue the rehabilitation proceedings will become final should no objection be filed by an interested party within 14 days of the date of the decision. If no objection is made within that period, then the rehabilitation proceedings will be formally discontinued as of 17 February 2017. However, if any objection is filed during the objection period then the effective date of discontinuation will be postponed pending the Court’s review of whether or not the rehabilitation proceedings should be discontinued.

It is anticipated that once the discontinuation of the rehabilitation proceeding become effective, the Court may declare bankruptcy (converting the rehabilitation proceeding to a bankruptcy proceeding). If this happens, the Court will appoint a trustee to dispose of Hanjin Shipping’s remaining assets and distribute the proceeds from the sale of those assets to Hanjin Shipping’s creditors.

Potential Conversion of Rehabilitation Proceeding to Bankruptcy Proceeding

If the Court does convert the rehabilitation proceeding to a bankruptcy proceeding, creditors who have filed their claims in the rehabilitation proceeding will not need to file their claims again as such claims will be deemed as bankruptcy claims filed under the bankruptcy proceeding. However, Members should note as follows:

If claims have been filed in a foreign currency, then a confirmatory action in respect of such claims will have to be filed again in the bankruptcy proceeding (as confirmatory actions involving such claims in the rehabilitation proceeding will not automatically be deemed as confirmatory actions in the bankruptcy proceedings).

If claims are not included in the list of claims accepted by the receiver in the rehabilitation proceeding, then they may be denied by the trustee and the creditor will need to file a confirmatory action again.

Common benefit claims will be treated as estate claims in the bankruptcy proceedings, which have priority over other claims.

Separate Bankruptcy Proceeding

In the event that the Court does not convert the rehabilitation proceeding into a bankruptcy proceeding, Hanjin Shipping’s creditors could still seek to have it declared bankrupt. In that case, all creditors would need to file their claims again in order to participate in any distribution from the bankruptcy estate.

In summary, the current position of the rehabilitation proceedings remains rather fluid and we therefore recommend that Members discuss any claims they may have with their usual FD&D case-handler.

14 December 2016

We refer to our previous Industry News update dated 16 November 2016, relating to Hanjin Shipping. Since that update, the court-appointed Receiver of Hanjin Shipping has on 5 December 2016 published his decision on affirming/rejecting the various general rehabilitation claims filed in the rehabilitation proceedings.

For Members whose filed claims have been accepted/affirmed in whole, there is no immediate need to take any further steps in the rehabilitation proceedings. If a rehabilitation plan is approved for implementation later in the proceedings, the admitted claim will be included in the rehabilitation plan and considered for payment/compensation pursuant to the terms of the plan.

Members should note that for those general rehabilitation creditors whose filed claims have been partially / wholly rejected by the Receiver, the deadline for filing of Confirmatory Proceedings is 5 January 2017. As a matter of Korean law, if Members do not commence the Confirmatory Proceedings, their claims will be confirmed in accordance with what is stated in the Table of Admission / Rejection and Members’ right to purse the rejected portion will be lost.

In the meantime, an interim meeting for interested parties in relation to the Hanjin rehabilitation was held on 9 December 2016, and we have received reports from various Korean lawyers on the same. At the meeting, Hanjin’s Court-appointed Receiver provided an update on the state of the rehabilitation process. Samil PwC, the inspectors appointed in the rehabilitation proceedings, also gave a presentation and their report was due to be submitted to the Korean Court on 12 December 2016.

Samil PwC’s report concluded that there were significant difficulties in order to revive Hanjin’s liner business and their approach has been to sell off the company’s major assets to avoid further depreciation in the value of the assets. In light of Samil PWC’s report, there is a likelihood that the rehabilitation proceedings may be converted into a liquidation proceeding by the Korean Court.

The next step in the rehabilitation proceedings is the First Meeting of Interested Parties, which is currently scheduled for 13 January 2017.

The current position on the fate of the rehabilitation proceedings is, therefore, quite fluid, and we recommend that Members discuss any claims they may have with their usual FD&D case-handler.

16 November 2016

We refer to our previous Industry News update dated 12 September 2016, relating to Hanjin Shipping.

The receiver in the Korean rehabilitation proceedings applied for a change to the schedule, which the Bankrutpcy Court has granted. Members should note that the schedule of key dates has been revised as below:

26 October to 5 December 2016 (previously 26 October to 15 November 2016)

Review of creditors’ claims report by the receiver

14:00 hours on13 January 2017 (previously 14:00 hours on 9 December 2016)

First meeting of interested parties

3 February 2017 (previously 23 December 2016)

Deadline for submission of draft rehabilitation plan

Whether the claims filed have been accepted or rejected by the receiver is, therefore, anticipated to be known by 5 December 2016.

Members should now be aware that the final absolute deadline for any supplementary filing will be 3 February 2017 (when the second meeting of the interested parties is anticipated to be held).

We have also been advised that the US Bankruptcy Court in New Jersey has set a hearing for 22 November 2016 to decide whether it should grant a final order for the recognition of the Korean bankruptcy court’s Rehabilitation order

12 September 2016

We refer to our previous Industry News update dated 2 September 2016, relating to Hanjin Shipping.

Today, 12 September 2016, the Seoul Central District Court has revised the timetable for steps to be taken in the rehabilitation proceedings, as follows:

10 October 2016

Deadline for the receiver to submit the list of recognised claims (secured and unsecured) to the Seoul Central District Court.

25 October 2016

Deadline for any creditor or shareholder to file secured claims, unsecured claims and shares (to be submitted to the Court along with supporting evidence).

25 October to 15 November 2016

Period for the review of the creditors’ filed claims by the receiver / other creditors – any objections to those claims to be filed by 15 November.

Of particular note for Members at this stage, is the fact that the deadline for reporting their claims to the Seoul Central District Court has been extended from 4 October to 25 October 2016.

Members who require assistance with filing their claims against Hanjin Shipping should contact the Club’s FD&D department for assistance.

2 September 2016

As many Members will already be aware, rehabilitation proceedings of Hanjin Shipping Co. Ltd. were commenced on 1 September 2016 by the Seoul Central District Court. Mr Tae-Soo Seok, CEO of Hanjin, has been appointed as the receiver.

Of particular note for Members at this stage are the following key dates:

19 September 2016

Deadline for the receiver to submit the list of recognised claims (secured and unsecured) to the Seoul Central District Court.

20 September to 4 October 2016

Period for any creditor or shareholder to report secured claims, unsecured claims and shares (to be submitted along with supporting evidence).

5 October to 18 October 2016

Period for the review of the creditors’ filed claims by the receiver / other creditors.

We would particularly draw to Members’ attention the deadline of 4 October 2016 for reporting claims to the Seoul Central District Court (together with supporting evidence).

We refer to our previous Industry News update dated 12 September 2016, relating to Hanjin Shipping.

The receiver in the Korean rehabilitation proceedings applied for a change to the schedule, which the Bankrutpcy Court has granted. Members should note that the schedule of key dates has been revised as below:

26 October to 5 December 2016 (previously 26 October to 15 November 2016)

Review of creditors’ claims report by the receiver

14:00 hours on 13 January 2017 (previously 14:00 hours on 9 December 2016)

First meeting of interested parties

3 February 2017 (previously 23 December 2016)

Deadline for submission of draft rehabilitation plan

Whether the claims filed have been accepted or rejected by the receiver is, therefore, anticipated to be known by 5 December 2016.

Members should now be aware that the final absolute deadline for any supplementary filing will be 3 February 2017 (when the second meeting of the interested parties is anticipated to be held).

We have also been advised that the US Bankruptcy Court in New Jersey has set a hearing for 22 November 2016 to decide whether it should grant a final order for the recognition of the Korean bankruptcy court’s Rehabilitation order.

Source: North of England P&I Club