Dive Brief:
- All creditors and potential claimants negatively impacted by the Hanjin bankruptcy must be prepared to file in the South Korean bankruptcy court by Tuesday, the Journal of Commerce reports.
- Claimants may still file in the U.S. Bankruptcy Court after that deadline, but any issues related to the shipping line's restructuring process — and therefore debts and credits — will likely be decided in South Korea.
- Nearly 4,000 creditors have already filed claims against Hanjin in South Korea, the Journal reports. Most of the world's top shipping lines filed to secure their credits are repaid.
Dive Insight:
The upcoming deadline threatens to leave various companies indirectly impacted by Hanjin's bankruptcy unable to offset or receive damage compensation as the U.S. Bankruptcy Court appears to favor adjudicating claims in South Korea, whose courts are responsible for the shipping line's restructuring.
In just one example, Ashley Furniture owed Hanjin payment for various shipments but was looking to offset the debts by the amount it had to pay a third party to complete delivery of stranded goods. However, the U.S. bankruptcy judge on Friday ruled in favor of Hanjin Shipping, claiming such offsets would distort the shipping line's revenue streams and would affect the restructuring efforts in South Korea.
Based on these complexities, the judge asked Hanjin to file a public notice regarding the deadlines in South Korea's courts, according to reports. Yet, filing in South Korea requires translation by a Korean counsel and the sheer bureaucracy could prevent many parties' possibilities of filing.
The Ashley Furniture case is not necessarily binding given case peculiarities, but it does show the Judge's perception of the bankruptcy court's ability to affect Hanjin's revenues based on Chapter 15.
