Maritime Transportation Overseas, the Dusseldorf-based shipping conglomerate, entered insolvency proceedings Monday, according to a court official there.
MTO's three owners hold a combined 49 percent stake in Topgallant Group Inc., which this year started a two-ship, U.S.-flag service on the North Atlantic to haul U.S. military cargo and commercial shipments.Topgallant officials said that MTO itself has no connection with Topgallant and that MTO's financial problems won't affect the U.S. company.
MTO's holdings include a 90 percent share of Brazil America Container Line, which operates a monthly service between the United States and Brazil. Bacol officials were unavailable for comment.
MTO also owned part of BCR Lines, which operated in the North Atlantic before ceasing operations last winter.
It was not immediately clear whether MTO plans to restructure or liquidate its assets. MTO officials refused to comment.
A Nov. 20 announcement from MTO said the company planned to add a fourth shareholder and increase the company's capital to 22.5 million deutsche marks
from DM15 million. The restructuring proposal failed to quell rumors of
When the restructuring plan was announced, Hansjoerge Troester, who is MTO's executive managing director, blamed MTO's problems on depressed freight rates, the falling dollar, and a decrease in Middle Eastern cargo volume caused by the fall in oil prices.
Mr. Troester said on Nov. 20 that MTO owns 49 percent of Topgallant. However, Topgallant officials in the United States and Europe said Monday that the 49 percent share was held by not by MTO itself, but by MTO owners who bought into Topgallant as private investors.
The largest of those investors was identified as Gunther Hahn, a West German businessman who owns 75 percent of MTO.
Joost A.W. Cramer, vice president of Topgallant, said Mr. Troester's comment about MTO being part owners of Topgallant was "very surprising and very strange." He said MTO's involvement with Topgallant was limited to performance of some agency-related functions.
Jack Abrams, chairman of Topgallant Group, said in New York that since his company was created earlier this year, its minority stake has been held by private investors, not by MTO. "MTO has never owned a share of stock in Topgallant," he said.
Mr. Abrams said news reports that have listed MTO as a part owner of Topgallant were erroneous. He said Topgallant didn't make a public statement disassociating itself from MTO because that might have shaken confidence in the German company.
"If a guy is down and wounded, you don't want to do anything untoward," Mr. Abrams said.
He said Topgallant is financially sound. "We are sorry that some persons in the industry are having trouble, but Topgallant is not one of them. We are rendering service to the American merchant marine as well as facilitating foreign commerce."
Mr. Abrams said Topgallant is paying its bills on time - a statement echoed by Brian Maher, president of Maher Terminals Inc., which is stevedore and terminal operator for Topgallant in New York and Baltimore.
"Topgallant has lived up to its commitments to us, and my understanding is that that's true with other terminal operators, too," Mr Maher said. ''Topgallant's record with us is as good as any account we have."
Topgallant last week registered a wholly owned subsidiary, Topgallant (Europe) Inc., which opened Monday in Rotterdam, Mr. Abrams said. At the same time Topgallant Group opened another U.S. office in Baltimore.