South Korea’s Hanjin Shipping Co. was granted a provisional U.S court protection from creditors so that its vessels can dock and unload cargoes in U.S. ports, a move that raised hopes for similar actions in other jurisdictions and to help prevent a major havoc in shipping deliveries.

U.S. Bankruptcy Court Judge John Sherwood in New Jersey issued a provisional stay order on Tuesday on the world’s seventh largest cargo carrier’s Chapter 15 petition asking for protection on its assets in the U.S. against seizure or other creditors’ enforcement actions after it filed for court receivership last week.

Hanjin Shipping vessels had been unable to dock at the Long Beach port in California in fear of losing cargoes to creditors. Hanjin Shipping’s request for bankruptcy protection was accepted after its parent Hanjin Group decided to raise $100 million to resolve the logistics crisis. But the order is only temporary ahead of the final ruling on Friday.

When the shipper obtains the final bankruptcy protection, its assets will be protected against creditors’ claims for debts and the company will be able to take steps to revive its business. The bankruptcy protection, however, does not allow the shipper to unload the cargos on the vessels that it would still need to pay for unloading works and hire labors. Currently, harbor workers are refusing to take Hanjin Shipping’s unloading works worried that they won’t be able to get pays for their work.

Hanjin Shipping filed for court receivership on August 31 in Korea, and applied for the bankruptcy protection known as the Chapter 15 in the U.S on September 2. Its parent Hanjin Group on Tuesday agreed to inject 100 billion won ($90.5 million) rescue fund including the private donation worth 40 billion won by group chairman Cho Yang-ho. The company pledged to raise fresh loans worth 60 billion won backed by its assets including stake in overseas shipping terminals.

The cargo carrier still has a number of vessels stranded around the world after being denied of making port calls. The Korean government has been pitching hard to secure the stay order for Hanjin Shipping vessels.

By Lee Jin-myung

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]