Shipping Vessel Seized Over Bond Default

Sept. 1, 2001
Major bondholders of Enterprises Shipholding seized the M/V OcelotMax (2,205 TEU, built in 2000), in Pusan, Korea, recently. Enterprises Shipholding,

Major bondholders of Enterprises Shipholding seized the M/V OcelotMax (2,205 TEU, built in 2000), in Pusan, Korea, recently. Enterprises Shipholding, the refrigerated shipping arm of the Restis family operations, borrowed US $175 million from the public bond market in 1998. In June 2001, the company failed to repay all principal, interest, and other amounts due the bondholders under terms of the indenture.

While bondholders have initiated multiple efforts to address the default with the company's management and directors, the company has failed to respond to such efforts or propose any resolution.

A spokesman for the bondholders said, “The bondholders are very concerned with the directors' lack of responsiveness and their seeming disinterest in carrying out their fiduciary responsibilities with respect to the default of their $175-million bond issue. The bondholders will continue to assess any and all options available to them and remain committed to pursuing all legal remedies. The bondholders' legal and financial advisors will continue to look closely at all recent transactions involving the sale of the company's assets. The company has effectively declared itself insolvent, and in doing so has obligations to all of its creditors including the holders of the $175-million bond issue, which is by far its largest debt obligation. To date, it appears that the company has ignored these obligations.”

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