Hanjin Shipping Co.’s financial troubles that led to bankruptcy a year ago stranded precious cargo, causing losses for trucking and other transportation companies.
LESSONS LEARNED: Supply chain execs say Hanjin taught them a lot.
RoadOne IntermodaLogistics lost more than $100,000, CEO Ken Kellaway said.
“I don’t think we’ll get more than 5 or 10 cents on the dollar and even that’s a stretch,” he said. RoadOne ranks No. 9 on the Transport Topics list of top intermodal and drayage providers.
Devine Intermodal hasn’t received a dime of a $100,000 loss after the Hanjin collapse. (Devine Intermodal)
Most other trucking companies and creditors haven’t seen any direct payments from Hanjin, though according to Indianapolis-based attorney Craig Helmrich of Scopelitis, Garvin, Light, Hanson & Feary, some have been able to settle claims for partial credit.
“Some people settled both sides of the claim, meaning the competing claim of Hanjin wanting to collect its receivables and Hanjin creditors wanting some credit for the injury the business [collapse] caused,” Helmrich told TT.
According to the Declaration and Status Report of the first creditors’ meeting June 1 in a Korean court, more than 180 creditors attended the session, led by Jin Han Kim, trustee for Hanjin.
Attorney Kurt Gerstner of Seoul, South Korea-based Lee International IP & Law Group, told TT that his “20 or 30” Hanjin clients have “basically dropped out now because they have low expectations about recovery, given the information that’s come from the court.”
According to the report, claims filed total about $10 billion. The debtor’s estate has recovered just a fraction, raising about 2.4%.
Helmrich explained that even if the Hanjin bankruptcy court denies a claim, that’s not necessarily the end of the road. “There’s a whole process in Korea where everybody submits their claim and then a trustee decides whether to agree or dispute it. If they dispute, then you have a miniature trial where you present evidence and the court looks at everything and decides whether you’ve proved [grounds for payment].”
He said Scopelitis told its dozen Hanjin clients “early” that they could easily spend $50,000 proving their case, and if they only recovered a cent on the dollar, it wouldn’t pay to wait out the bankruptcy.
“None of my clients held out hope for a payout of any significant size in the case on unsecured claims. Because there was little hope of a payout, unsecured creditors were wise to use their claims to negotiate reductions in claims by Hanjin,” he said.
One creditor who didn’t settle, Devine Intermodal, instead chose to take its lumps and hasn’t received a dime. “We took the hit and canceled the receivables. It was a loss of $100,000 on our bottom [line] for 2016,” said Richard Coyle, president of the Sacramento-based intermodal company. “Once [Hanjin] declared bankruptcy, all of our open receivables were deemed uncollectable, so we have already written them off. We tried to seek remuneration from actual cargo owners but got nowhere.”
Instead of continuing to fight, Devine chose to “raise our prices with those same cargo owners with future shipments on other ocean carriers.”