Chapter 11 bankruptcy ahead for shipping company

March 21, 2014 4:02 pm Published by

When most people think of large companies, they tend to think of companies that are successful. While this is generally true since a company has to make money to grow, there are some instances in which a company that has been successful will end up having to file for bankruptcy protection. For Genco Shipping & Trading, filing bankruptcy will likely come before the end of this month.

The large shipping company has a principal payment of around $50 million due before the end of the month. It is expected that the company will file for Chapter 11 bankruptcy prior to that payment due date.

The owner of the company has been trying to work out a deal with Centerbridge Partners. In that deal, he would run the business but give up control of it. The company made a debt payment of $3.1 million in an effort to stay in compliance with lenders while a prepackaged deal for bankruptcy is worked out.

In 2008, the company’s shares were trading as high as $80. With news of the bankruptcy, that has dropped to $1.24.

The company is said to owe bondholders $125 million. It also has a bank debt of around $1.1 billion. It is estimated that if the company sells its fleet of 53 tankers, it will make around $1.2 billion. That is about equal to the debt owed.

Having to file for bankruptcy is something that no business owner wants to do. With the way the economy fluctuates, that sometimes becomes a necessity. If your business is facing more debt than it can handle, the advice of a New York bankruptcy attorney familiar with Chapter 11 bankruptcy might help you to learn your options.

Source: New York Post, “NY shipping tycoon to take second bankruptcy hit” Josh Cosman, Mar. 20, 2014

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