Server: Netscape-FastTrack/2.01 Date: Wed, 31 Dec 1997 20:43:25 GMT Accept-ranges: bytes Last-modified: Mon, 12 May 1997 19:49:52 GMT Content-length: 44408 Content-type: text/html
July 1995
Vol. 6, No. 2
Back to the Annual Table
of Contents
Contents
Basics of Bankruptcy
by Jeremy J.O. Harwood
Bankruptcy has a long, if undistinguished, history. The term is derived from the Italian phrase "banca rotta" meaning "broken bench", the ultimate symbol of a trader's failure in the Italian city-states. American bankruptcy law, however, draws heavily on its English roots. The concept of "fraudulent transfers", for example, can be found in the Star Chamber. See Twyne's Case, 3 Coke 806 (1601). Pickwick, of course, languished in Debtors' prison (as did Dickens' father). Bankruptcy has changed considerably since then.
Indeed, the wheel has now turned full circle with the filing for Chapter 11 protection by the Japanese owner of Rockefeller Center in New York in May 1995. The stigma of bankruptcy has, along with the substitution of the neutral term "debtor" for "bankrupt", vanished. The threat of bankruptcy, under American law, is an appropriate defensive strategy to be considered by any business or individual facing intractable creditors. Limitation of space permits only an introduction to the basic principles in this edition of Mainbrace. A closer examination of specific issues will follow in a future edition. These include "voidable preferences"; fraudulent transfers; equitable subordination; and creditors' rights in pursuing claims against a debtor and any hidden assets of the debtor.
THE BANKRUPTCY CODE
The Bankruptcy Act of 1978, known as the Bankruptcy Code ("Code") governs all cases commenced between October 1, 1979 and October 21, 1994. The Bankruptcy Reform Act of 1994, effective for the most part to cases filed on or after October 22, 1994 has made some important amendments to the Code. These are noted below. The body of the Code is, however, contained in the 1978 Act. An important jurisdictional amendment establishing the jurisdiction of the Bankruptcy Courts as a unit of the District Courts was introduced, however, by the Bankruptcy Amendments and Federal Judgeship Act of 1984 after the Supreme Court found the Bankruptcy Court's jurisdiction unconstitutional under the 1978 Act.
REORGANIZATION AND LIQUIDATION
The principal chapter in the Code is Chapter 11 "Reorganization". The purpose of Chapter 11 is to allow the Debtor to propose a plan of reorganization, while under the bankruptcy court's protection, by virtue of an automatic stay, from the onslaught of creditors. Alternatively, the Debtor may abandon his business entirely to his creditors by filing a Chapter 7 "Liquidation" petition. A trustee is then appointed to dispose of the assets of the estate and distribute the proceeds to creditors in accordance with the terms of the Code. A case may also be converted from Chapter 11 to Chapter 7, and vice-versa. More recently, the courts have accepted "liquidating" plans of reorganization in Chapter 11 cases as a better means of maximizing sale value rather than a Chapter 7 trustee's "fire sale".
WHO MAY BE A DEBTOR
The Code provides that a "person" who resides, has a domicile or a place of business or property in the United States may be a debtor. A "person" is defined in the Code as including an "individual, partnership and corporation." A foreign corporation may qualify to be a debtor in the United States, subject to the above, irrespective of its principal place of business.
THE PETITION
A bankruptcy case is initiated by filing a "petition for relief" together with various schedules. The principal information required in a petition is a list of creditors. A list of equity security holders is also required, in addition to a separate list of the twenty largest unsecured creditors. In due course the Bankruptcy Court will set a "bar date" for creditors to file proofs of claim. Filing a proof of claim provides the Bankruptcy Court jurisdiction over the filing creditor. The Debtor or a Trustee may thereby obtain jurisdiction to prosecute a preference or other adversary proceeding to recoup pre-petition transfers or for breach of the stay against a foreign creditor where lack of jurisdiction may have provided an impregnable defense. Careful consideration should be given to filing a proof of claim in such circumstances.
ANCILLARY PETITIONS
Ancillary bankruptcy petitions under Section 304, such as filed by the UK administrators of Robert Maxwell's group of U.S. companies, permit a foreign trustee or "representative" to marshall assets for distribution to creditors in the foreign bankruptcy. In deciding whether to grant an ancillary petition, the Code requires the Bankruptcy Court to look at several factors. One of the most important factors is a showing that there be no "prejudice or inconvenience" to "claim holders in the United States". In line with the principles of comity with the other nations' insolvency laws, also a listed factor, distribution to creditors in the foreign bankruptcy is not required to exactly reflect the Code's list of priorities among creditors. Healy & Baillie has filed such "mini-bankruptcy cases" as adjuncts to a main bankruptcy pending abroad to (1) garnish payments by third-parties, (2) marshall U.S.-based assets, and (3) obtain discovery of such assets. Section 304 is, in our experience, a highly effective proceeding.
THE AUTOMATIC STAY
The Automatic Stay (Section 362, the "Stay") is, perhaps, the best known benefit to a debtor. No action can be taken against a debtor after the petition is filed based on a pre-petition act or default, whether by continuation of a lawsuit or arbitration or commencement of either type of action. A separate Code section provides that the property of a debtor's estate includes all "legal and equitable interests of the debtor in property" "wherever located and by whomever held". The reach of the Stay is not, therefore, confined to the United States, at least in the U.S. Bankruptcy Court's view.
In the U.S. Lines bankruptcy, a Hong Kong bunker supplier was found to have a jurisdictional nexus with the United States. The supplier had arrested U.S. Lines' vessels in Singapore and Hong Kong in breach of the Stay to obtain security for its claims. The court levied a fine of $5,000 per day until the arrests were vacated. Foreign courts, however, may not recognize the Code's extra-territorial reach. An English creditor, without jurisdictional contacts with the United States, obtained a Mareva injunction of U.S. Lines' assets after U.S. Lines filed its bankruptcy petition, in breach of the Stay. The English High Court refused to recognize the Stay.
THE BANKRUPTCY COURT'S POWERS
In conjunction with Section 362, Bankruptcy Courts may enter protective orders reciting the prohibitions of the Stay under a catch-all empowering provision. 11 U.S.C. ¤ 105. The 1994 Act has made an important addition to the general grant of equitable powers to the Bankruptcy Court to "issue any order...necessary or appropriate to carry out the provisions of [the Code]". The amendment permits bankruptcy judges on their own volition to hold periodic status conferences. The court is authorized at such conferences to set dates for assumption or rejection of executory contracts and, in general, enter any order the court considers will assist the resolution of the bankruptcy case.
This provision makes it important that a creditor file a "Notice of Appearance and Request for Notices". The court is required to give notice to "parties in interest", to allow opposition to be voiced, before entering any order. In practice, however, this may not occur unless a "Notice" has been filed. This is especially important for foreign creditors hoping to obtain recovery through the bankruptcy process.
EFFECT OF FILING A PETITION
1. Duties of the Debtor-in-Possession
A debtor-in-possession (that is a debtor where no trustee has been appointed, referred to here as "Debtor") continues to run the business while attempting to formulate a reorganization plan, subject to duties imposed by the Code. In addition to the various schedules which are required, the Bankruptcy Court for the Southern District of New York ("Southern District") has, by local rules, imposed additional duties. In summary, these relate to various reporting requirements and to opening new bank accounts immediately after commencing a case identifying the account as the debtor's.
In addition, under the Southern District's local rules the Debtor must provide the U.S. Trustee with proof that it has "all appropriate insurance". The Debtor is also required to file verified monthly financial statements and operating reports 15 days following the end of each calendar month. The detailed list of the requirements of the monthly reports show that the Southern District requires a properly prepared profit and loss statement and balance sheet on a monthly and annual basis.
Most importantly, the directors of a corporate debtor are in the position of operating the Debtor's business as a fiduciary for its creditors.
2. Control of the Business
Under Chapter 11 the Debtor's officers generally remain in the control of the Debtor's assets and operate the business. Their control can be challenged and a trustee or examiner appointed. This can be an invaluable tool for a creditor alleging pre-petition fraud, etc., and distrustful of the Debtor's handling of assets in bankruptcy
a. Trustees
A trustee may be appointed to displace the existing management "on request of a party in interest or the United States trustee, and after notice and a hearing . . . ." 11 U.S.C. § 1104. The grounds for such a request under Section 1104 include "fraud, dishonesty, incompetence, or gross mismanagement of the affairs of the debtor by current management, either before or after commencement of the case".The grounds for appointment of a trustee are therefore wide, providing the court with equally wide discretion.
b. Examiners
A party in interest (meaning most often a creditor) or the U.S. Trustee may also ask that an examiner be appointed, if a trustee is not appointed. 11 U.S.C. § 1104(b). An examiner is appointed "to conduct such an investigation of the debtor as is appropriate." An examiner does not replace the Debtor but acts alongside him, investigating matters as stated above. It should be noted that if the Bankruptcy Court denies a request for trustee, it must appoint an examiner.
c. Creditors' Committee
A committee of creditors may also be formed in larger cases. The committee performs the function of monitoring, with the U.S. Trustee, the activities of the debtor and ensuring that the debtor is acting in the "best interest of creditors". The creditors' committee's approval of a proposed disclosure statement and reorganization plan is essential. 11 U.S.C. § 1103(c)(3). In Prudential Lines the creditors' committee sided with outside investors and proposed a reorganization plan which was approved over that of the incumbent debtor.
The committee is usually composed of creditors with the seven largest claims, if willing to serve. In practice, such creditors usually agree upon and appoint an attorney to represent the creditors throughout the case. 11 U.S.C. § 1102(b)(1). The Debtor, by its principal officers, is obliged to attend at a meeting of its creditors within a "reasonable time" after filing the petition. 11 U.S.C. §§ 341, 343. The meeting is presided over by the U.S. Trustee. The U.S. Trustee and creditors are entitled to examine the debtor on all aspects of its petition. In our experience, this examination is of relatively little value. A Rule 2004 investigation is a great deal more effective.
3. Operation of the Business Under Chapter 11
a. "Ordinary Course of Business"
The Debtor may continue to operate its business in the regular course without court permission. The Code requires, however, that a Debtor obtain Bankruptcy Court approval of any proposed action, including sales of assets or property, that is not in the "ordinary course of business". That term is not, however, defined in the Code. "Ordinary course of business", in general, refers to all normal steps taken by a debtor corporation in the conduct of its day-to-day business, such as purchases of regularly used materials and supplies; hiring additional employees as needed on a replacement basis; and paying wages. The loose definition does not include bulk sales of property; sales or purchases of substantial capital items; abandonment of property; or significant changes in company policy that would be expected to increase operating costs or involve substantial additional expenditures.
b. Sales of Assets and Property
The Code allows sale of property that is not needed in the Debtor's business. Bankruptcy Court approval is, however, required either of the sales procedure, e.g., an auction, or of the terms of a private sale.
c. Cash Collateral
If a creditor's collateral consists of cash, such as the proceeds of accounts receivable or the sale of inventory, the Debtor may not use that cash without the creditors' consent or the court's approval. The court may authorize the use of cash collateral if the Debtor shows that the secured creditor's interest is adequately protected, e.g., if the debt can provide a replacement lien. The use of cash collateral is often the initial battle to be fought with creditors. A stipulation allowing the use of cash collateral based on certain conditions is often the most effective and expeditious way of resolving the issue.
d. Post-Petition Financing
Instead of, or in addition to, using cash collateral a Debtor may obtain cash by borrowing ("DIP financing"). 11 U.S.C. § 364, B.R. 4001(c). If the Debtor cannot otherwise obtain financing the bankruptcy court may authorize the Debtor to grant the lender a lien on property senior to a creditor's pre-existing lien. However, the Debtor must in such circumstances show that the creditor's collateral remains sufficient to provide for full payment of the creditor's debt secured by that collateral after satisfaction of the new post-petition lien. 11 U.S.C. § 364(d)(1).
THE TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES
Under Section 365 the trustee or Debtor may, subject to the court's approval, assume or reject any executory contract or unexpired lease of the Debtor. An "executory contract", which is not defined in the Code, is a contract where obligations exist, the one to the other, by both parties to the contract. Leases which have expired by their own terms or which terminated prior to the petition may not be assumed. Further, Section 362 provides that the commencement of a bankruptcy case operates as a stay of all acts or litigation by a non-Debtor party to an executory contract. Contract terms calling for automatic termination based on an "act of insolvency" are prohibited by Section 365 (e).
1. Standard for Assumption or Rejection
An executory contract or unexpired lease must either be accepted or rejected in full. The courts, in determining whether rejection will be advantageous to the Debtor's estate, base their review upon the principle that a Debtor's decision should be given the deference due to an ordinary business judgment.
2. Duties Upon Assumption
Section 365 provides that the Debtor must "promptly" cure all pre-petition defaults upon assuming an executory contract or lease. The Debtor must also compensate the creditor for any pecuniary loss arising from its defaults and provide "adequate assurance", as determined by the Court, of future performance. 11 U.S.C. § 365(b)(1). The cure of defaults upon assumption of an executory contract or lease may be on terms approved by the Court, as opposed to the terms of the contract. In re D.H. Overmyer Co., 510 F.2d 329 (2d Cir. 1975).
THE REORGANIZATION PLAN
The goal of the Chapter 11 case is a court-approved reorganization plan upon which the creditors and all interest holders are entitled to vote. The plan is propounded after negotiations with the committees representing the various parties in interest and after all such parties have received a "disclosure statement", which should set out and explain the contents of the proposed plan.
The plan may provide for rescheduling, reduction or other compromise of debts. Often unsecured creditors are paid only a few "cents on the dollar" or issued stock in the reorganized company in respect of their claims. Once the plan is approved the Debtor's obligations to its creditors are as set out in the plan.
A plan may be approved or "confirmed" by the court if it meets the statutory requirements of the Code and if it is accepted by each class of creditors and equity security holders. Acceptance by a class of creditors requires acceptance by more than one-half of the number in that class or two-thirds in dollar amount of that class. The plan may be made binding on all creditors by means of a "cramdown" even if a majority of one or more classes votes to reject the plan.
EFFECT OF CONFIRMATION OF A PLAN
The provisions of a plan bind the Debtor, any entity that acquires property under the plan and any creditor or equity security holder of the Debtor, whether or not the claim or interest of the creditor or equity security holder is impaired under the plan and whether or not the creditor or equity security holder accepted the plan. 11 U.S.C. § 1141(a). Unless otherwise provided for in the plan, or by the order confirming the plan, the confirmation of a plan vests all of the property of the estate in the Debtor. 11 U.S.C. § 1141(b). Confirmation of the plan discharges the Debtor from any debt that arose before the date of confirmation, as well as any debts arising from rejection of a contract or unexpired lease under § 365. 11 U.S.C. § 1141(d)(1). The confirmation of the plan does not discharge the Debtor if the plan provides for the liquidation of all or substantially all of the property of the estate or the Debtor does not engage in business after the confirmation of the plan. 11 U.S.C. § 1141(d)(3).
The Debtor likewise does not receive a discharge upon confirmation of a plan under Chapter 11 if it would be denied a discharge under Section 727(a) if the case were a Chapter 7 case. 11 U.S.C. § 1141(d)(3)(c). Section 727 refers to a Chapter 7 Debtor's intent to hinder or defraud creditors by concealing, among other things, property acquired within one year before the petition. 11 U.S.C. § 727(2). An essential part of pre-petition filing for a prospective debtor, therefore, is a determination of whether there are grounds to prevent a discharge such as an inability to satisfactorily explain any loss of assets. 11 U.S.C. § 727(a)(5).
CONCLUSION
Bankruptcy may be considered, from a creditor's perspective, the last refuge of a scoundrel. As discussed briefly above, it has many benefits for a Debtor and potential traps for an unwary creditor. Nevertheless, a bankruptcy petition may provide a creditor an opportunity to divest the Debtor of his business and permits much greater discovery and investigation of a Debtor's affairs and assets than would be allowed in litigation elsewhere. For a determined creditor, a bankruptcy petition should not be considered the final chapter to recovery.
Back To Contents | Down to Site Navigation
Recent Decision Under the Oil Pollution Act of 1990
by Matthew A. Marion
On April 26, 1995, the Court of Appeals for the Eleventh Circuit in Boca Ciega Hotel, Inc. v. Bouchard Transp. Co., 51 F.3d 235 (11th Cir. 1995), affirmed a federal district court's holding that claimants alleging causes of action under OPA must, in accordance with 33 U.S.C. § 2713, present their claims to the responsible parties (as designated by the U.S. Coast Guard) before being permitted to commence lawsuits against the responsible parties on those claims. The Boca Ciega case arose when 4 vessels collided in August of 1993 in Tampa Bay. One month later, plaintiffs commenced suit in federal court against the owners/operators of 2 tugs, a barge and a vessel (all designated responsible parties), alleging a variety of claims under OPA and state law. Defendants moved to dismiss the complaints for lack of subject matter jurisdiction.
The district court summarized OPA's claims procedures as follows:
The OPA provides that all claims for damages shall be presented first to the party responsible for the spill. See 33 U.S.C. § 2713(a). If a claim is presented to the responsible party and each person to whom the claim is presented denies all liability for the claim or the claim is not settled by any person by payment within 90 days after the date upon which: (A) the claim was presented, or (B) advertising was begun designating the source of the discharge or threat and the procedures by which claims may be presented [See 33 U.S.C. § 2714(b)], whichever is later, the claimant may [then] elect to commence an action in court against the responsible party or guarantoror to present the claim to the [Oil Spill Liability Trust] Fund.
Based on the mandatory language of § 2713, the district court dismissed the OPA claims for lack of subject matter jurisdiction. In addition, it dismissed the state court claims based upon the lack of diversity jurisdiction and because it was unwilling to exercise its supplemental jurisdiction over the pendant state claims.
On appeal, the 11th Circuit affirmed the district court's dismissal based on the "mandatory" language of § 2713 and OPA's legislative history, but left open the option for the claimants to refile the lawsuit after complying with OPA's presentment requirement in the event the claims were not settled by the responsible parties.
Back To Contents | Down to Site Navigation
Korean Award
Healy & Baillie associate Ronald Betancourt was recognized by the Korean
American Women's alliance for his representation at trial of Korean fishermen
in a suit brought against the U.S. Navy in federal district court. Mr.
Betancourt was the guest of honor at the organization's anniversary dinner
and received a plaque for his accomplishments.
Back To Contents | Down to Site Navigation
New Partners
The Firm is pleased to announce that Jeremy J.O.
Harwood became a member of the Firm on January 1, 1995. Jeremy was
born in Beirut, Lebanon and educated from an early age in England. After
leaving Charterhouse, he was commissioned from Sandhurst into the First
Royal Tank Regiment where he spent most of a year in command of four reconnaissance
tanks of the British Army of the Rhine. A Morehead Scholarship took him
to the University of North Carolina at Chapel Hill, where he obtained a
degree in English and History before obtaining a law degree from Oxford
University. He was the Master of Moots of the Oxford University Law Society.
Mr. Harwood is a member of the Inner Temple and was called to the Bar of England and Wales. He is also admitted in New York and has argued appeals in the Second and Fourth Circuit Courts of Appeals. He spent three years working with Thomas R. Miller, London before joining the Firm in 1987. In addition to his background in charterparty and FD&D cases, he has developed a specialty in creditors' rights in bankruptcy, a field in which the firm has pioneered several new areas of law and remains actively involved. His article "Bankruptcy Arbitration and the Unwilling Debtor" was published in the December, 1993 issue of the Dispute Resolution Journal of the American Arbitration Association.
* * * *
The Firm is pleased to announce that, effective June 1, 1995, John W. Wall became a member of the Firm, based at our new office in Stamford, Connecticut. A graduate of the Massachusetts Institute of Technology and Stanford Law School, John practiced for ten years with Donovan Leisure Newton & Irvine, specializing in complex litigation and arbitration, securities regulation, antitrust, product liability, environmental, and international law.
Since 1983, he has concentrated on maritime law, for four years with Freehill, Hogan & Mahar, and for eight years in his own law firm. His fields of specialization include oil pollution and environmental damage, shortage and contamination of liquid cargoes, appeals in federal and state courts, and procedural, jurisdictional and constitutional issues. Mr. Wall is a member of the Bars of New York and Connecticut, the United States Supreme Court, the United States Court of Claims, and four of the United States Courts of Appeals. In addition, he has served as an arbitrator in maritime, corporate and technical disputes.
Back To Contents | Down to Site Navigation
Under New York Law Faxes and Telexes CanGive Rise To Binding Ship Sale
Contracts
International Minerals and Resources, Inc. v. Pappas ("The Brazilian
Friendship"), 761 F. Supp. 1068 (S.D.N.Y. 1991)
by Robert G. Shaw
Various articles have appeared recently in the shipping trade press providing misleading reports of a New York case arising from a disputed sale of the vessel "Brazilian Friendship".
The case involved a claim for wrongful interference with a contract for the sale of a ship. Under a long-established rule of American law, ship sale contracts do not fall within the admiralty and maritime jurisdiction of the U.S. federal courts. The case was therefore decided by applying New York law in the federal court in New York City exercising jurisdiction over the case because of the diversity of citizenship of the parties.
Certain of the defendants moved in 1991 (761 F. Supp. 1068 S.D.N.Y.) for summary judgment dismissing the complaint. The complaint alleged defendants had wrongfully interfered with the plaintiffs' contractual right to buy the ship. The court held that under New York law there could be no claim for tortious interference with a contract to sell a ship, based on events which had occurred before the date a formal MOA was signed. The court reached this conclusion in part because the specific provisions of a telex setting forth the terms of the sale expressly stated that the negotiation and execution of a formal written instrument, i.e., a signed MOA, were a precondition to contractual obligations coming into existence. The court concluded from this express language of the telex, and from the fact that there were continuing negotiations between the parties after the telex was sent, that the parties intended further negotiation and execution of a formal written MOA were to be a precondition to the existence of contractual obligations.
The court did not state a general principle of law that telexes or faxes exchanged between parties do not give rise to obligations under contracts of sale of ships or that a signed MOA is required in all cases before there can be a binding contractual obligation for the sale of a ship.
The case proceeded in litigation through to a trial. At the trial held in February this year, the judge instructed the jury that they could not find that a written contract came into existence until the time the MOA was signed. Therefore, the jury could not consider actions of the defendants before such time, in deciding whether defendants had tortiously interfered with contract rights of the plaintiffs. The trial judge gave this charge to the jury based on the court's earlier findings in 1991 when the court granted partial summary judgment to the defendants. The trial judge did not suggest in his charge to the jury that there was any general principle of law that telexes or faxes could not give rise to a binding contract for the sale of a vessel.
Recent press articles concerning the case have incorrectly suggested, among other things, that the 1991 summary judgment decision casts doubt on whether, under New York law, a telex or fax can give rise to a binding MOA. Some recent articles have also suggested that the case casts doubt on whether faxes or telexes can give rise to a binding charter. This is a doubly erroneous view of the case, since charters are within the admiralty and maritime jurisdiction of the U.S. federal courts and were not even discussed in The Brazilian Friendship.
Back To Contents | Down to Site Navigation
Beware of Finance "Brokers" Bearing Promisesof Loans "Too
Good to Be True"
by Robert G. Shaw
In the last few months we have heard from a number of clients who have been approached by parties in the United States offering to obtain financing for ship acquisitions at what appear to be extraordinarily favorable terms.
On close investigation in all cases these offers have appeared to be part of fraudulent schemes aimed at obtaining payments from shipowners without any real prospect of the financing materializing.
All of the schemes have involved variations of the following fact pattern:
1. The broker approaches the shipowner stating the broker has access to certain investors who generally remain nameless but who are stated to have origins in a variety of places around the world. These investors are said to have large amounts of money available for long-term loans of up to 15 years with no capital repayments for the first seven or eight years. The rates of interest quoted are about 8%. These facts alone should immediately cause sophisticated business people to question the legitimacy of the offers. A ten year U.S. Treasury Bond earns interest only slightly below the rates being offered under these loans. It is not credible that legitimate businesses would be lending substantial amounts of money on shipping deals at such rates.
2. The offer to locate financing as proposed is usually accompanied by statements that the prospective borrower has been "pre-approved" and all the "pre-approved" borrower need do to secure a final commitment is to place a certain amount of money with the broker or an affiliate in an unrestricted account as an "administration fee" necessary in order to take the application further.
3. The parties making the offer will invariably resist entirely any suggestion that the pre-paid fee amounts should be placed in escrow with a lawyer or other third party who cannot disburse the funds except upon actual provision of the financing.
4. Details as to the identity of the individuals behind the stated lender and the source of their funds are invariably not given except in the most general terms such as "the funds are coming from Far East investors who wish to remain anonymous."
In one case of which we are aware, where a client (before speaking to lawyers) remitted a so-called administrative fee to an entity offering to obtain financing of this sort, the funds were never returned and the account to which the funds were wired was promptly closed.
Shipowners receiving offers for financing on extremely advantageous terms (i.e. terms "too good to be true"), accompanied by a request for any kind of up-front fee, should be immediately suspicious and should proceed with extreme caution.
To place a message into an individual's H&B internal mailbox address it: [First Initial] [Last Name]@healy.com; as in "bjones@healy.com". This method is preferred because the message goes directly into the mailbox of the recipient. Very soon we will have a dial-in capability so that our lawyers can collect mail from their H&B mailboxes from anywhere in the world at any time.
Back To Contents | Down to Site Navigation
In a one week period in mid-June the U.S. Supreme Court rendered decisions in all three of the cases discussed in the last issue of "Mainbrace" (Vol. 6, No. 1, P.6).
In the M/V SKY REEFER the Court held that an arbitration clause in a bill of lading subject to the U.S. COGSA providing for arbitration outside the United States is valid and enforceable.
In Latsis v. Chandris, Inc., the Court clarified the definition of "Seaman" for Jones Act Purposes, indicating as a rule of thumb that a worker speding less than 30% of his working time aboard a vessel is not likely to qualify as a seaman.
In the E.M. FORD case the Court held that neither a good-faith dispute over liability nor the existence of mutual fault justifies denial of pre-judgement interest in an admiralty collision case.
For further details, contact the firm.
Back To Contents | Down to Site Navigation
MAINBRACE is intended to provide general information. The articles contained in MAINBRACE do not constitute legal advice. An analysis of the facts relating to a particular issue must be accomplished before legal advice can be given.
NOTE: "Mainbrace," our Firm's cable address, in nautical terminology means the brace or rope sustaining the main yard on a ship. The Staff of "Mainbrace" consists of Nicholas J. Healy, Gordon W. Paulsen, John C. Koster, Matthew A. Marion, Betty M. Waterman and Renee Kintzer.
New York Office: 29 Broadway New York, NY 10006-3293 Telephone: (212) 943-3980 Telecopier: (212) 425-0131 |
Hong Kong Office: Luk Hoi Tong Bldg., Suite 1301 31 Queen's Road Central Hong Kong Telephone: (852) 2 537-8628 Telecopier: (852) 2 521-9072 |
Connecticut Office: Stamford HarborPark 333 Ludlow Street Stamford, CT Telephone: (203) 961-7250 Telecopier: (203) 357-7909 |
New Jersey Office: 374 Millburn Avenue P.O. Box 599 06902-6987 Millburn, NJ 07041-0599 Telephone:(201) 384-2556 Telecopier:(201) 384-1081 |
Internet:Reception@Healy.com
MAINBRACE
HEALY & BAILLIE
29 BROADWAY
NEW YORK, NEW YORK 10006-3293
Home Page Oil Pollution Charters |
MB Newsletter WWW Links In the News |
Attorneys Firm Description Offices |
Making Law Bibliography Search |
Email Us Webmaster Disclaimer |