New York Shipping Company to File for Bankruptcy
Sources claim that New York shipping giant Genco Shipping & Trading will file for bankruptcy before the end of this month. The shipping company stocks fell to $1.24 when the bankruptcy news hit. Previously, stocks had traded as high as $80 a share in 2008. The company owns 53 tankers in its fleet and ships commercial goods including soy beans, iron ore, coal and grain.
According to reports, the company’s owner — a man who at one time claimed to be worth around $2 billion — cannot afford a $50 million principal payment that is due on a loan. This news comes after a $3.1 million payment on debt was made late by the company. This payment was apparently made so that the company could continue to work out a prepackaged bankruptcy deal. The company owes an estimated $125 million to bondholders and $1.1 billion in bank debt.
Reports say that this deal would allow the company’s current owner would continue to run the company while control over the company would debt holder.
A Chapter 11 bankruptcy is expected in the case. Business and commercial bankruptcies can be difficult and complicated ventures. People need to understand the benefits and the downsides to restructuring a New York business in bankruptcy. Often, however, a business bankruptcy can give businesses a second chance at success.
Through business debt negotiations, the liquidation of debt and other legal action, the company can get back on the right track. However, companies may need help understanding the complex business bankruptcy issues that may have to be addressed before filing.
Source: New York Post, “NY shipping tycoon to take second bankruptcy hit,” Josh Kosman, March 20, 2014