TMT Shipmanagement, F Elephant bankruptcy cases dismissed by court

By Caroline Salls

Pittsburgh, July 23 - TMT USA Shipmanagement LLC and F Elephant Corp.'s Chapter 11 bankruptcy cases were dismissed on July 23 by the U.S. Bankruptcy Court for the Southern District of Texas.

As previously reported, four TMT USA Shipmanagement lenders asked the court to dismiss the debtors' cases on July 3, claiming the petition was a bad-faith filing.

The lenders said that the "cause" put forth in TMT's filing was "in bad faith and/or manufactured jurisdiction in bad faith," that there is no likelihood of rehabilitation of the TMT debtors, that the debtors are unable to "effectuate a Chapter 11 plan," that an alternate forum is available to the debtors, and that the interests of the creditors and the debtors would be better served by dismissal.

Only TMT and F Elephant's cases were dismissed, leaving the other debtors in bankruptcy.

According to Tuesday's order, some of the TMT debtors violated their cash collateral use order by arranging for ECB International LLC to pay $750,000 in wages directly to the crews of three whale vessels.

If ECB reduces any amount that it owes to a debtor on account of all or a portion of this $750,000 advance, the court ordered that the debtor receiving less than full payment must cause a non-debtor entity to deposit an amount equal to the reduction, which will be deposited into the debtor's cash collateral account and be subject to any lien held by the respective lender.

In addition, the court said the debtors must cause non-estate property with a fair market value of $40.75 million to be provided to the estates by Aug. 20.

If the good faith property includes any property other than cash, it must include at least 25 million shares of the common stock of Vantage Drilling Co.

If the court rules that the initial good faith property has a fair market value of less than $40.75 million, the debtors will have an additional 30 days to supplement the property so the fair market value is $40.75 million.

In its June bankruptcy filing, TMT sought the return of seven income-producing vessels.

TMT, a Houston-based shipping company, filed for bankruptcy on June 24. Its Chapter 11 case number is 13-33740.

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