Marco Polo Seatrade creditor objects to DIP loan, cites lender control

By Caroline Salls

Pittsburgh, Sept. 9 - Marco Polo Seatrade BV secured creditor The Royal Bank of Scotland objected to the company's proposed debtor-in-possession financing, according to a Friday filing with the U.S. Bankruptcy Court for the Southern District of New York.

"The DIP motion is a transparent attempt by the debtors, working in concert with their insider lender to hijack the bankruptcy process for the benefit of their out-of-the-money equity holder," the bank said in the objection.

"Under the shield of the debtors' business judgment, the DIP motion seeks authorization for the debtors to lend money to themselves on a non-market basis."

Royal Bank of Scotland said the terms of the proposed DIP financing allow the DIP lender to retain control of the company by converting its financing claims to equity.

The bank called the loan terms "inherently unfair and unreasonable," arguing that Marco Polo Seatrade is trying to entrench its existing equityholder and give it leverage in the bankruptcy process "on the backs of RBS and other secured creditors in these cases."

A hearing is scheduled for Sept. 15.

Marco Polo Seatrade, an Amsterdam-based vessel owner, filed for bankruptcy on July 29. The Chapter 11 case number is 11-13634.

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