Hanjin says cargo owners withholding $80 million in payments

Fri Sep 23, 2016 3:57pm EDT
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By Tom Hals

WILMINGTON, Del (Reuters) - Failed South Korean container carrier Hanjin Shipping Co Ltd 117930.KS told a U.S. judge on Friday that cargo owners were withholding up to $80 million in payments for completed shipments, complicating the company's ability to move stranded freight.

"Hanjin is not the only bad guy here," Ilana Volkov, an attorney for the shipping company, said at a status hearing at a U.S. Bankruptcy Court in Newark, New Jersey.

Hanjin lawyers said that many cargo owners had received their goods on credit but have yet to pay the shipping company.

Hanjin, the world's seventh-largest container carrier, filed for bankruptcy in August, stranding $14 billion worth of cargo at sea as the company lacked cash to pay cargo handlers, tug operators or ports.

South Korea's government said on Friday that enough money had been pledged to unload Hanjin ships by the end of October.

An attorney for Ashley Furniture Industries, a Wisconsin-based furniture maker, told Friday's hearing the company anticipated that costs related to Hanjin's failure would eventually exceed what it owed for past shipments.

"To hold onto this money is important," said Jeremy Ryan, the attorney for Ashley.

Like many retailers and other cargo owners, Ashley has been stuck paying to get its cargo from the dockside, even though Hanjin had been paid to deliver it to an inland destination.   Continued...

Hanjin Shipping Co shipping containers are seen at the Port of Long Beach, California, U.S. on September 8, 2016. REUTERS/Lucy Nicholson/File Photo