U.S. Shipping gets court approval of joint venture control settlement

By Jennifer Lanning Drey

Portland, Ore., July 17 - U.S. Shipping Partners, LP received court approval of an agreement with Blackstone and Cerberus entities that resolves a state court action involving a dispute over the control and management of the USS Products Investor LLC joint venture, according to a Friday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The Blackstone/Cerberus parties own 60% of the joint venture interests, and U.S. Shipping owns 40%.

Under the settlement, U.S. Shipping debtor USS Product Manager LLC will receive $14.75 million for the termination of a management agreement.

In addition, U.S. Shipping will have the right to make the first offer to purchase vessels to the extent the joint venture decides to offer all or any portion of them for sale in the future.

USS Product Manager will also transfer all of its right, title and interest as a class B member of the joint venture to the Blackstone/Cerberus parties.

Also under the settlement, the lawsuit will be dismissed.

According to the motion requesting approval of the settlement, the Blackstone/Cerberus parties alleged that non-monetary defaults had occurred under the joint venture's governing loan agreements.

As a result, U.S. Shipping said the Blackstone/Cerberus parties tried to take various actions against the joint venture that would have significantly affected the company's contract and property rights.

U.S. Shipping is an Edison, N.J.-based provider of long-haul marine transportation services. It filed for bankruptcy on April 30. Its Chapter 11 case number is 09-12711.

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