Daehan Shipbuilding files Chapter 15 case, cites Korean rehabilitation

By Caroline Salls

Pittsburgh, Aug. 19 – Daehan Shipbuilding Co., Ltd. made a Chapter 15 bankruptcy filing on Monday in the U.S. Bankruptcy Court for the Southern District of New York to gain U.S. recognition of its rehabilitation proceeding under the Republic of Korea’s Debtor Rehabilitation and Bankruptcy Act.

In a statement filed with the court, custodian and foreign representative Byung Mo Lee said the company recently suffered from a “serious liquidity crisis due to the economic recession arising from the global financial crisis in 2008.”

Lee said these issues were compounded by the financial difficulties of Daehan’s parent company, Dae Ju Construction Industry Co., Ltd., during the same timeframe.

As a result, the company’s credit rating plummeted, resulting in the cancellation of 22 of its ship building contracts.

In addition, Lee said Doehan suffered major losses stemming from currency fluctuations following the economic recession, which were made worse by the inflation in the personnel expenses and distribution costs for ship building.

On March 3, Rimpacific Navigation Inc. and Wonder Enterprises Ltd. filed a petition for recognition of foreign judgments against the company in the Supreme Court of the State of New York, County of New York, seeking recognition and enforcement of a $54.54 million English judgment rendered in favor of Rimpacific and Wonder.

Daehan is asking the court to stay the filing or continuation of all actions against the company as part of the Chapter 15 filing.

According to court documents, Daehan has $100 million to $500 million in assets and $500 million to $1 billion in debt.

The company is represented by Blank Rome LLP.

Daehan is a Hwawon-myeon, Haenam-gun Jeollanam-do, South Korea ship building company. The Chapter 15 case number is 14-12391.

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