Bankruptcy can affect businesses in any industry, and maritime corporations are no exception to this rule. Take the massive South Korean shipping company Hanjin Shipping Co. for example. Over the past few months, Hanjin has been filing for bankruptcy. Due to the company’s massive position in the American shipping industry, much of this case has been handled in ongoing Chapter 15 proceedings in American courts, which has brought with it a number of complications. While bankruptcy is a problem that can face any given business (or individual), any business that operates primarily on the water such as Hanjin faces additional wrinkles in their case thanks to the way maritime law handles bankruptcy claims – and these wrinkles can trickle down and affect their workers and ship crews in ways you might not expect.
Maritime law handles bankruptcy cases both alongside and differently from standard American legal practices. When a shipping company (or any other industry that operates on the water) has to file for bankruptcy, a maritime lien can be placed on sea-connected property. A maritime lien is like a standard lien against property in any legal proceedings, the only difference being the property has to be waterborne or sea-connected in some way.
These liens are given lower priority than other liens, and are actually handled in reverse – meaning that older liens against a property will take priority over newer ones when it comes time to determine who may be eligible to file a lien. In the case of Hanjin, as it has in many others, this has led to a fast scramble among Hanjin’s debtors to determine who can retrieve their liened property first.
So this is all well and good for any companies filing bankruptcy, but what does this mean for you as the average maritime worker? A few things, depending on your connection to the company.
To start, let’s go back to the example of boats being seized as maritime liens. During bankruptcy hearings, many companies are still able to operate like normal and continue standard business operations – however, during maritime liens, a higher priority can be placed on seizing assets and if the boat you work on falls under one of these liens, you might wind up being transferred to another vessel. You are, however, still covered by the Jones Act in the event of any injury or illness suffered while working on board a vessel in navigation even after the vessel has been seized, as Jones Act claims are brought against your employer, not the vessel in question. (Violations of Jones Act death actions or the Death on the High Seas Act may also give rise to maritime torts, depending on the circumstances.)
Additionally, as you may know, the Jones Act requires any shipments based between two points in America be sent via American-owned and -operated vessels. A bankruptcy filing can affect your employment; if you work for the company filing bankruptcy you may no longer be eligible for employment to work aboard the vessels, but if you work for another maritime employer you may have to pick up the slack, as it were, and take over for the shipping or manufacturing component or the business that is entering bankruptcy.
Furthermore, a large part of the Jones Act revolves around the compensation of injured maritime workers for any maritime injuries they may have suffered while on the job. Bankruptcy law provides for an “automatic stay” of any court motions or claims against the company undergoing bankruptcy, so while you may still have a window of time to complete your injury, illness, or disability claims against the defendant company and contact a maritime lawyer, your ability to successfully finish your claim may be impacted by the company’s bankruptcy proceedings.
This is where O’Bryan Law comes in. If you’re currently working on a Jones Act claim for injury or illness compensation against a company filing bankruptcy, contacting our Jones Act attorneys can help your get your case resolved quickly and effectively. Our decades of experience can help you get the justice you deserve, and when time is of the essence you need the toughest maritime lawyers you can find. Let us help you with your offshore injury case – no matter what company is facing bankruptcy.
