STX Pan Ocean Co., South Korea’s biggest commodities shipping line, filed for Chapter 15 bankruptcy protection, according to court records.
The company, based in Seoul, South Korea, listed both debt and assets of more than $1 billion in documents filed today in U.S. Bankruptcy Court in Manhattan. Chapter 15 protects foreign companies from U.S. lawsuits and creditor claims while a company reorganizes abroad.
STX Pan is asking the U.S. court to recognize the proceeding pending before Seoul Central District Court, Fifth Bankruptcy Division, as a “foreign main proceeding,” according to court papers.
STX Pan filed for court receivership under the Korean Rehabilitation and Bankruptcy Act in June after a drop in shipping rates left it unable to pay its debts.
A decrease in traffic volume and ocean freight fares due to a worldwide recession led to a liquidity crisis, causing STX Pan’s bankruptcy, the company said in court papers. STX Pan filed for rehabilitation on June 7 under Korean law, and the Korean bankruptcy court issued an order June 17 appointing trustees to oversee the case.
The case is In re STX Pan Ocean Co., 13-12046, U.S. Bankruptcy Court, Southern District of New York (Manhattan).