Overseas Shipholding seeks injunction to halt partnership dissolution

By Jim Witters

Wilmington, Del., Feb. 25 - Overseas Shipholding Group, Inc. is seeking an injunction to prevent BP Oil Shipping Company USA, Inc. from removing an Overseas affiliate from a partnership and from dissolving the partnership, according to documents filed Feb. 25 with the U.S. Bankruptcy Court for the District of Delaware.

Overseas Shipholding said that BP violated the automatic stay of legal proceedings embedded in the bankruptcy code when BP notified debtor OSG America Operating Co. LLC on Feb. 22 that it was divesting OSG's membership in Alaska Tanker Co. LLC.

Since 1999, OSG or its affiliate OSG Ship Management, Inc. has been involved in the partnership with BP and Keystone Alaska, LLC, according to court documents.

"Alaska Tanker, a non-debtor in these cases, is a Delaware limited liability company that manages vessels carrying crude oil from Alaska to the West Coast of the United States. It operates pursuant to the limited liability company agreement of Alaska Tanker Co., LLC entered into among the members and is expected to provide OSG with significant revenue if certain predetermined performance standards are met," the filing states.

BP unilaterally decided to "serve as liquidator to dissolve and wind up Alaska Tanker, all without relief from the automatic stay and based solely on an unenforceable provision in the LLC agreement," Overseas says.

Overseas Shipholding is seeking an order

• Permanently enjoining BP from terminating OSG's voting or economic rights;

• Permanently enjoining BP from commencing the liquidation and winding up of Alaska Tanker;

• Permanently enjoining BP from breaching its duty of fair dealing to OSG and/or awarding appropriate damages suffered as a result of such breach;

• Directing BP to take all necessary steps to mitigate and reverse the termination and liquidation actions to date;

• Declaring that BP has violated the automatic stay;

• Declaring that BP has breached its duty of fair dealing to OSG;

• Granting OSG a declaration that each of the termination and liquidation actions is null and void;

• Awarding OSG actual damages for BP's violation of the stay; and

• Awarding OSG attorneys fees and expenses.

A hearing on the motion is scheduled for 11 a.m. ET on Feb. 26.

Overseas Shipholding, a New York-based tanker company, filed for bankruptcy on Nov. 14. Its Chapter 11 case number is 12-20000.

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