Johannesburg: new bankruptcy law
According to pan-African legal services group Bowman Gilfillan, a court order was granted last month in response to its work for Overseas Shipholding Group (OSG) – a New York shipping operator recognised as one of the world’s largest oil tanker companies with more than 118 vessels and assets of $4.15 billion.
Bowman Gilfillan partner Claire van Zuylen commented: ‘On 14 November 2012, OSG and its subsidiaries went into bankruptcy in the USA under chapter 11 of the US Bankruptcy Code. OSG was, however, concerned that its vessels, which often passed into South African territorial waters and ports could be arrested by local or foreign creditors, particularly on a “sister ship” basis. We acted for OSG and its 180 subsidiaries in an urgent court application, granted on 7 December 2012.’
The order now sets a precedent for the recognition of bankruptcy and the application of certain provisions of the foreign bankruptcy law.
Said Ms van Zuylen: ‘The order made new law in South Africa. Previously our courts have, on a cross-border insolvency basis, only been prepared to recognise foreign liquidators or administrators and to give them certain powers in South Africa.’
OSG’s New York bankruptcy lawyers, Cleary Gottlieb Steen & Hamilton, said: ‘Our thanks to local counsel -- we could not have obtained this excellent result without the hard work and quick thinking of the legal team at Bowman.’