Bech-Bruun assists The Containership Company A/S with a company restructuring in accordance with the new Danish reconstruction rules
Bech-Bruun has assisted The Containership Company A/S with one of the first larger company restructures in Denmark after the entry into force of the new rules in the Danish Insolvency Act on 1 April 2011.
As TCC has been operating its containership business between China and the USA, a large number of TCC's assets and liabilities are located in the USA and TCC's suspension of its transpacific service at the start of April 2011 has resulted in a large number of disputes with Chinese and American shippers.
The primary reason behind the suspension was failure by the majority of shippers to meet the contractual cargo volumes which they had committed to in their service contracts, resulting in TCC's failure to realise its budgeted revenues.
A decision has been taken to file compensation claims against these shippers. Such action has not previously been taken, so this principled decision can, potentially, alter the world of international shipping in the future.
In order to manage the compensation recovery process, to protect TCC's assets in the USA and to avoid being involved in numerous diverse legal proceedings with American shippers in different American jurisdictions, Bech-Bruun filed a Chapter 15 petition with the Federal Bankruptcy Court (Southern District of New York) for recognition of the Danish reconstruction process as a "foreign main proceeding". The purpose of this was to ensure that TCC could obtain the same protection in the USA as it could in Denmark, during the reconstruction period.
A large number of shippers objected to the petition arguing, among others, that reconstructions (as opposed to bankruptcies) have not previously been recognised as "foreign main proceedings".
On 1 July 2011, the New York Bankruptcy Court passed judgement in TCC's favour by recognising the new Danish reconstruction rules under Chapter 15 in the US. This is the first time ever that such the new Danish rules have been recognised in this manner.