NEWARK, New Jersey — A federal judge has allowed a bank to foreclose on and sell its interest in more than 1,500 Hanjin Shipping containers to repay the bank for owed lease payments, in the latest effort to help pay off debts owed by the carrier for the many containers still languishing across the globe in yards and terminals.
Judge John K. Sherwood granted the approval in US District Bankruptcy Court in Newark, New Jersey, to First Commercial Bank, which said that it entered into a 2011 financing agreement with Hanjin Shipping for the lease of 1,587 containers, which the now bankrupt carrier has defaulted on. The suit is one of several involving Hanjin Shipping carriers that, aside from providing financial relief to creditors, may help ease the container market, which some analysts say is heading for a container shortage in part due to containers being taken out of circulation by the Hanjin bankruptcy.
The ruling enables First Commercial Bank to “exercise all of its rights and remedies … including but not limited to, immediately foreclosing on its interests in the containers and selling or disposing” of them to third parties, the judge ruled. However, the ruling only allows the bank to pursue its interests, and doesn’t require carriers or terminals to “surrender or relinquish” any boxes.
Sherwood two weeks ago approved a request by Maher Terminals, of the Port of New York and New Jersey, and Georgia Ports Authority, to sell or otherwise dispose of hundreds of Hanjin Shipping containers sitting in their facilities, to help pay off the carrier’s debts to the terminal and port.
Maher Terminals, saying it had 256 Hanjin containers clogging up its facility, said it was owed $3.1 million in storage and other charges. Georgia Ports Authority said it had 474 containers at the Port of Savannah.
Last week, Intermodal Cartage Company (IMCG), a Nashville-based trucking company, filed papers asking Sherwood for permission to sell or otherwise dispose of 1,500 empty Hanjin-owned or leased containers currently in what it called “forced storage” at company depots in Tennessee and Texas.
The carrier owes $950,000 in storage charges, accrued since it filed for bankruptcy reorganization in a South Korean bankruptcy court on Aug. 31. The court in February officially declared the carrier bankrupt.
“IMCG has been significantly harmed, because the Containers are taking up extremely valuable space at the IMCG Depots with no corresponding benefit to IMCG,” said the company, adding that it has reached out to the carrier for resolve the issue and has gotten no response.