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Richardson Stevedoring & Logistics Services, Inc. v. Daebo International Shipping Co. Ltd.

United States District Court, E.D. Louisiana

April 20, 2015

RICHARDSON STEVEDORING & LOGISTICS SERVICES, INC
v.
DAEBO INTERNATIONAL SHIPPING CO. LTD., ET AL

ORDER AND REASONS

MARTIN L. C. FELDMAN, District Judge.

Before the Court is Shinhan Capital Co. Ltd.'s motion to vacate maritime attachment of the M/V DAEBO TRADER. For the reasons that follow, the motion is DENIED.

Background

This maritime case features multiple vessel attachments arising out of competing claims by various creditors against Daebo International Shipping Co., Ltd. More particularly, in these consolidated cases the plaintiffs insist that Daebo International Shipping Co., Ltd. owes them millions of dollars for services rendered to Daebo and that its fraudulent ownership scheme with Shinhan Capital Co., Ltd. should not shield Daebo from the Rule B attachment remedy. For its part, Shinhan Capital Co. Ltd. urges the Court to vacate the attachments of its vessel, the M/V DAEBO TRADER, which is loaded with 57, 000 metric tons of perishable soybean cargo valued at approximately $25 million and, Shinhan submits, at great risk of spoilage considering it has been seized in this District since mid-February and is destined for what will be a 40-day voyage to China.[1] Notably, no bond has been posted.

For the purposes of the present motion to vacate, it is undisputed that the plaintiffs have maritime claims against Daebo International Shipping Co., Ltd. and that Shinhan Capital Co., Ltd. is the DAEBO TRADER's registered owner. But the plaintiffs allege that the vessel's true beneficial owner is Daebo, and that Shinhan is merely an alter ego or fraudulent transferee - nothing more than a financier - with respect to Daebo, which is a debtor to plaintiffs. Advancing similar allegations, beginning in mid-February 2015, five plaintiffs have filed verified complaints against both Daebo International Shipping Co. Ltd. and Shinhan Capital Co. Ltd. seeking attachment of the M/V DAEBO TRADER. The plaintiffs in their complaints urge the Court to disregard Shinhan's registered ownership of the vessel because Shinhan is merely an alter ego of Daebo and that the two act as a single business entity. Based on the allegations of the verified complaints and, pursuant to Rules B of the Supplemental Rules for Certain Admiralty and Maritime Claims of the Federal Rules of Civil Procedure, the Court issued Rule B writs of foreign attachment, the first of which was served on the DAEBO TRADER on or before February 18, 2015; according to the U.S. Marshals, the vessel was seized on Friday, February 20, 2015.[2]

Shortly thereafter, the DAEBO TRADER's time charterer, Dana Shipping and Trading S.A., filed Rule E(4)(f) motions to vacate the maritime attachments on the ground that the plaintiffs' claims are solely against Daebo and that the vessel is solely the property of Shinhan such that the attachments are invalid.[3] The Court denied the motions. The parties do not dispute that the background of this case is accurately summarized in this Court's March 2, 2015 Order and Reasons denying Dana's motions to vacate.[4] In denying the motions, the Court listed the evidence submitted by the plaintiffs in support of their probable cause burden of proof to maintain the attachment.[5]

Meanwhile, on March 16, 2015, Daebo International Shipping Co. Ltd., making a restricted appearance as lessee of the M/V DAEBO TRADER, notified the Court that it had commenced an ancillary case under Chapter 15 in which it had applied for recognition in the United States Bankruptcy Court for the Southern District of New York of its foreign bankruptcy proceeding pending in the Seoul Central District Court in the Republic of Korea. On March 20, 2015, Daebo notified the Court that it had applied for and was granted provisional relief pending a hearing on its petition for recognition as a "foreign main" bankruptcy proceeding. The bankruptcy court in New York declined to grant vacatur relief sought by Daebo regarding this Court's Rule attachments of the DAEBO TRADER. However, the bankruptcy judge issued an order instituting a limited stay; its order granting provisional relief pending hearing on petition for recognition as a foreign main proceeding precludes any person or entities from

securing or executing against any asset or property of [Daebo] or taking any actions to undertake the enforcement in the United States of any judicial, quasijudicial, administrative or regulatory judgment, assessment or order or arbitration award against [Daebo]... or its property, whether owned, chartered, or leased or the proceeds thereof within the territorial jurisdiction of the United States....

The parties here dispute whether or to what extent the bankruptcy stay precludes or limits or supports relief requested in these consolidated proceedings.[6]

Shinhan now enters a restricted appearance as the owner of the DAEBO TRADER, with a full reservation of all rights and defenses pursuant to Rule E(8) of the Supplemental Rules for Certain Admiralty and Maritime Claims of the Federal Rules of Civil Procedure, submits additional evidence for the Court to consider, and urges the Court to vacate the maritime attachments of the M/V DAEBO TRADER.

I.

Where, as here, property has been attached under Supplemental Admiralty Rule B, [7] Supplemental Admiralty Rule E(4)(f) entitles any party claiming an interest in the property to a prompt hearing at which the attaching plaintiff bears the burden of showing that the attachment is proper and should not be vacated. Fed. R.Civ. P. Supp. R. E(4)(f).[8]

To support maritime attachment of property under this Rule, a plaintiff must satisfy filing, notice, and service requirements, and must also show that: (1) the plaintiff has a valid prima facie admiralty claim against the defendants; (2) the defendants cannot be found within the district; (3) the defendants' property may be found within the district; and (4) there is no statutory or maritime law bar to the attachment. See Aqua Stoli Shipping Ltd. v. Gardner Smith Pty. Ltd., 460 F.3d 434, 445 (2d Cir. 2006), abrogated on other grounds by Shipping Corp. of India Ltd. v. Jaldhi Overseas Pte Ltd., 585 F.3d 58 (2d Cir. 2009). Once a defendant's property has been attached, and the defendant contests the attachment by moving to vacate the attachment under Rule E(4)(f), the attachment must be vacated unless the attaching party presents sufficient evidence to show probable cause for the attachment. See Austral Asia Pte Ltd. v. SE Shipping Lines Pte Ltd., No. 12-1600, 2012 WL 2567149 (E.D.La. July 2, 2012)(Engelhardt, J.)(citations omitted). However, courts are not obliged to make binding determinations of fact during Rule E(4)(f) hearings; rather, courts are called upon to "merely ...


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