Omega Navigation lender asks to dismiss, convert Chapter 11 cases

By Lisa Kerner

Charlotte, N.C., Aug. 26 - Omega Navigation Enterprises Inc. senior lender HSH Nordbank AG wants the court to dismiss the company's bankruptcy cases or convert them to Chapter 11, according to a Friday filing with the U.S. Bankruptcy Court for the Southern District of Texas.

A hearing is set for Oct. 24.

The debtors filed for bankruptcy to avoid repayment of their senior credit loan obligations, including $242.72 million of outstanding principal plus unpaid prepetition interest, fees and expenses.

HSH said the amount owed exceeds the value of Omega's collateral - eight ships valued at a total of $239 million, the filing said.

Cause exists to dismiss or convert the cases because they were not filed in good faith and because there is "no reasonable prospect of rehabilitation of the company," the filing said.

Omega Navigation, an Athens, Greece-based provider of marine transportation services, filed for bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas on July 8. The Chapter 11 case number is 11-35926.

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