Marco Polo Seatrade creditor eyes dismissal, disputes jurisdiction

By Caroline Salls

Pittsburgh, Sept. 13 - Marco Polo Seatrade BV secured creditor the Royal Bank of Scotland asked the U.S. Bankruptcy Court for the Southern District of New York to suspend all proceedings, dismiss the company's Chapter 11 cases and lift the automatic stay to allow RBS to file an insolvency proceeding in an appropriate jurisdiction, according to a Monday court filing.

"Six weeks into these Chapter 11 cases, the debtors have yet to provide a satisfactory answer to the question 'Why are these cases in a U.S. Bankruptcy Court?'" RBS said in the motion.

RBS said the Marco Polo Seatrade debtors belong in a foreign insolvency proceeding because they are Dutch entities, their affiliates are foreign entities, their vessels operate under foreign flags, their principal offices are in the Netherlands and they have no offices or employees in the United States. In addition, RBS said their loan documents are governed by foreign law and call for exclusive foreign court jurisdiction for disputes and their secured creditors and the members of the company's unsecured creditors committee are foreign entities.

"The circumstances of the parties' business relationship and the terms and conditions of their loan documents are consistent with the legitimate commercial expectation that RBS would not be hauled into a U.S. Bankruptcy Court where its rights and interests would be subject to possible impairment by the debtors," the creditor said in the motion.

"Nevertheless, RBS is being held hostage by the debtors' improper use of Chapter 11. The debtors do not have any prospects for effecting a reorganization within a reasonable period of time," RBS said in the motion. "To the contrary, their plan appears to be to cling to and utilize RBS' collateral without protecting RBS against its diminishing value, in the hope of riding out a depressed shipping market."

A hearing is scheduled for Oct. 3.

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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