Partner Madlyn Primoff Discusses Financial Pressures on the Shipping Industry in Dow Jones Daily Bankruptcy Review
As seen in Dow Jones Daily Bankruptcy Review’s “Shipping Firms Face Refinancing, Default Risks Amid Pressures”
Dow Jones Daily Bankruptcy Review comments on a new report from Standard & Poor’s concerning the troubled state of the shipping industry. Many shipping companies are currently struggling as a result of market conditions, including oversupply and limited funding from banks. Companies that ordered large amounts of new vessels when the market was booming are now unable to find enough steady business to profitably utilize them. In addition, banks have issued tougher rules governing lending and are charging higher premiums as a result of the risk currently involved in the shipping industry.
According to Kaye Scholer Bankruptcy and Restructuring Partner Madlyn Primoff, companies in possession of vessels that can "nimbly adapt" to best suit what the market needs at that moment, such as alternating from shipping oil to shipping grain, will be most likely to benefit from any positive changes in the market.
Primoff also notes that US bankruptcy courts have proven themselves to be "hospitable” to international shipping companies looking to work through their financial problems in court. "As long as there's some conceivable nexus to the US, the US courts are predisposed to take shipping cases, so that creates at least a forum for resolving shipping insolvencies," she says.
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