Marco Polo Seatrade files liquidation plan based on lender settlement

By Caroline Salls

Pittsburgh, May 8 - Marco Polo Seatrade BV filed a plan of liquidation and related disclosure statement Monday based on a global settlement with its official committee of unsecured creditors, Credit Agricole Corporate and Investment Bank, the Royal Bank of Scotland plc and Norddeutsche Landesbank Girozentrale (NordLB), according to filings with the U.S. Bankruptcy Court for the Southern District of New York.

The company said the settlement resolves all issues related to the validity, priority, amount, and extent of pre-bankruptcy and post-bankruptcy liens and claims of each of the lenders.

Under the global settlement, all of the vessels and other collateral securing a Credit Agricole credit facility and RBS credit facility will be turned over to those lenders.

As consideration for the turnover of their vessels, the lenders have agreed to waive all administrative expense claims, other than debtor-in-possession financing claims, a cash collateral true-up claim, claims arising under the global settlement and claims arising under the plan.

According to the disclosure statement, the administrative expense claims being waived would have otherwise significantly diluted the unencumbered assets available for distribution to holders of general unsecured claims.

Plan terms

Under the proposed plan

• Administrative expense claims, debtor-in-possession financing claims, a cash collateral true-up claim, priority tax claims and other priority claims will be paid in full;

• A Credit Agricole deficiency claim and an RBS deficiency claim will be allowed as general unsecured claims, but Credit Agricole and RBS will only receive a distribution on the deficiency claims after holders of other general unsecured claims have received distributions totaling 5% of their claims;

• NordLB's $5.2 million claim secured by a second lien on the Diana and Montiron vessels will be treated as general unsecured claim;

• Holders of any other secured claims will receive the collateral securing their claims, proceeds from the collateral or the equivalent of the claim, at the discretion of the liquidation trustee;

• Proceeds from the liquidation of the unencumbered assets, other than Marco Polo Seatrade retained interests, will be distributed to holders of general unsecured claims under the terms of a liquidation trust agreement.

The company said in the disclosure statement that the holders of general unsecured claims other than RBS and Credit Agricole will receive enhanced recoveries;

• Holders of general unsecured claims will receive a share of liquidation trust interests, representing beneficial interests in the trust assets allocated to Marco Polo Seatrade, Magellano Marine CV, Cargoship Maritime BV and Seaarland Shipping Management BV sub-trusts, including a general unsecured claims reserve amount, excess administrative and priority claims reserve, excess professional claims reserve and unrestricted cash proceeds of causes of action;

• Holders of subordinated claims will receive a share of the remaining general unsecured claims reserve amount, excess administrative and priority claims reserve and unrestricted cash proceeds of causes of action;

• Existing Marco Polo Seatrade shareholders will have the right to retain the Marco Polo Seatrade retained interests, consisting of the equity interests held by the company in the San Project and Synergas joint ventures.

These interests will be retained as consideration for the agreement of the shareholders and Marco Polo's management to help the liquidation trustee and liquidating advisory board with the reconciliation of claims and monetization of unencumbered assets.

Marco Polo Seatrade equity interests will be reinstated under the plan; and

• Subsidiary interests will be cancelled, and holders will receive no distribution.

Marco Polo Seatrade, an Amsterdam-based vessel owner, filed for bankruptcy on July 29, 2011. The Chapter 11 case number is 11-13634.

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