Chiquita Says Eastwind Liquidation Won’t Affect Deliveries

Ships remain under charter to grower

Chiquita Brands International said it does not expect the bankruptcy filing by Eastwind Maritime and many of its affiliates to adversely affect service to Chiquita's customers and the delivery of its bananas and other fresh fruit products.

 

It said all of the 12 oceangoing ships that the company sold in 2007 remain under long-term charter to Chiquita, including the four ships sold to Eastwind.

 

Eastwind, an operator of refrigerated ships that is domiciled in the Marshall Islands, filed for Chapter 7 bankruptcy protection Wednesday in the U.S. Bankruptcy Court of the Southern District of New York.

It filed for liquidation after a number of creditors sued it to collect debts. Most recently, Bunkers International sued the company and its affiliates on June 17 to collect $136,000 in unpaid fuel bills.

Previously Nordea Bank took control of 13 ships in Eastwind’s fleet, including 10 container ships, two dry bulk ships and one reefer ship, after foreclosing on debts and sold them to Israeli shipowner Sammy Ofer, according to Maritime Global Net.

 

Eastwind Maritime is also facing a $23 million lawsuit from PB Tankers over defaulted payments and attempted cancellation of time charter agreements with PB, a $6 million lawsuit from Medal Shipping and two smaller suits from bunker suppliers over unpaid bills, and has had two of its vessels arrested.

"We are taking appropriate steps to protect Chiquita's interests under these long-term charters," said Waheed Zaman, senior vice president, product supply organization.

 

"While Chiquita's shipping operations represent only a comparatively small part of Eastwind's business, we have been monitoring developments closely and are working with the other parties involved in the chartering relationships to help assure ongoing and timely service to our customers," Zaman said.

 

Eastwind Maritime entered a deal with Chiquita Brands International in May, 2007, in which Chiquita sold 12 refrigerated cargo vessels to Eastwind for $227 million, and then leased them back. The vessels transported about 70 percent of Chiquita bananas shipped to core markets in Europe and North America.

The corporation listed assets and liabilities in the range of $500 million to $1 billion in the documents it filed with the court. Related affiliates include Kura Shipping and Probulk. The cases are being heard by Bankruptcy Judge Allan Gropper.

 

The documents filed did not give a reason for the bankruptcy filing beyond saying "...in the judgment of the board of directors, it is desirable and in the best interests of the company, its creditors and other interested parties that the company file a petition for relief and commence a case under the provisions of Chapter 7 of the Bankruptcy Code."

Prior to the agreement with Chiquita, Eastwind operated a fleet of 105 ships -- 68 of which it owned -- including refrigerated fruit carriers, freezer vessels, bulk carriers, product tankers and container ships.

 

 

(Source: Journal of Commerce)