This browser is not actively supported anymore. For the best passle experience, we strongly recommend you upgrade your browser.
Norton Rose Fulbright logo
  • Global
  • About
    • Back
    • About
    • Our firm
      • Back
      • Our firm
      • Clients
      • Global coverage
      • Vision, culture and people
      • Governance structure
      • Risk management
      • NRF Transform
      • Alumni
    • Diversity, Equity & Inclusion
      • Back
      • Diversity, Equity & Inclusion
      • Our people
      • Recognition
      • Governance
    • Corporate responsibility
      • Back
      • Corporate responsibility
      • Pro bono
      • Volunteering
      • Fundraising
      • Sustainable practice
      • Global charitable initiatives
    • Photo montage
      RE:

      Read our magazine
  • People
  • Services
    • Back
    • Services
    • Services A-Z
    • Key industries
      • Back
      • Key industries
      • Consumer markets
      • Energy, infrastructure and resources
      • Financial institutions
      • Life sciences and healthcare
      • Technology
      • Transport
    • Practices
      • Back
      • Practices
      • Antitrust and competition
      • Banking and finance
      • Bankruptcy, financial restructuring and insolvency
      • Climate change and sustainability
      • Consulting
      • Corporate, M&A and securities
      • Employment and labor
      • Energy
      • Environmental, social and governance (ESG)
      • Financial services and regulation
      • Information governance, privacy and cybersecurity
      • Intellectual property
      • Litigation and disputes
      • Private equity and venture capital
      • Projects
      • Real estate
      • Regulation and investigations
      • Risk advisory
      • Tax
      • Banking and finance
      • Climate change and sustainability
      • Corporate, M&A and securities
      • Energy
      • Financial services and regulation
      • Intellectual property
      • Private equity and venture capital
      • Real estate
      • Risk advisory
    • NRF Transform
    • Transform image

      Find out more
  • Insights
    • Back
    • Insights
    • NRF InstituteProfessional developmentResources and tools
    • PublicationsBlogsVideos
    • EventsWebinarsPodcasts
    • colorful light particles
      Sustainability and ESG

      Visit the hub
  • News
    • Back
    • News
    • Press releases
    • Market recognitions
    • Media information
  • Locations
  • Careers
    • Back
    • Careers
    • Graduates and students
    • Search current vacancies
      • Back
      • Search current vacancies
  • Change
  • Global
    • Back
    • global site
    • North America
      • Canada (English)
      • Canada (Français)
      • United States
    • Latin America
      • Latin America
      • Brazil
      • Mexico
    • Europe
      • Belgium
      • Deutschland (Deutsch)
      • France
      • Germany (English)
      • Greece
      • Italy
      • Luxembourg
      • Poland
      • The Netherlands
      • Turkey
      • United Kingdom
    • Middle East
    • Africa
      • Africa
      • Burundi
      • Kenya
      • Morocco
      • South Africa
      • Uganda
      • Zimbabwe
    • Asia Pacific
      • Australia
      • China
      • Hong Kong SAR
      • Indonesia
      • Japan
      • Singapore
      • Thailand
    • Regional practices
      • India
      • Israel
      • Korea
      • Marshall Islands
      • Nordic region
      • Pakistan
      • Vietnam
Lake in the forest

Connections

Insights, perspectives and viewpoints from our lawyers on topical issues

All Posts Subscribe
print-logo
9/19/2023 9:36:19 AM | 2 minute read

Insights from LISW: Demystifying restructurings in the shipping and offshore sector

A beautifull horizontal graphic view of the bow of a large ship in port. It would make a great image forf anything involving international shipping; transportation; industrial cargo or ferry.
13

Get in touch

Avatar
Nicholas Papadopoulos
Senior Associate

Get in touch

Avatar
Nicholas Papadopoulos
Senior Associate
13

Restructurings in the shipping and offshore industry can be particularly complex given the multi-jurisdictional nature of the businesses involved. In the “boom” times stakeholders tend to forget invaluable lessons learned from these restructurings. At the recent panel session for LISW, Alex Blaney, Eleanor Martin and James Stonebridge, together with Chris Ruell and Ian Graham from FTI, gave us a timely reminder of their real life “lessons re-learned” from their extensive experience in the shipping and offshore sector.

 

Key highlights

Distress signals

It is important for creditors to identify financial distress as early as possible, either through monitoring cash-flow or looking out for operational warning signs. This can be addressed at the outset of a financing transaction by ensuring creditors are given sufficient information to monitor the borrower’s financial health. Identifying the need for a restructuring early enables creditors to properly consider the full range of options available, including enforcement of security and the legal and practical obstacles to doing this. It also ensures creditors a “seat at the table” during pivotal discussions with stakeholders and creates an opportunity for creditors to negotiate additional favourable terms (such as access to key strategic and financial information and additional costs coverage) in exchange for supporting debtors in a potential restructuring.

 

Venue

Chapter 11 can be the benchmark to which other potential large scale proceedings are compared and is traditionally the venue of choice for large scale restructurings. However, it is notoriously expensive and other judicial proceedings or out-of-court processes may instead be used to implement the negotiated restructuring with sufficient creditor support. Other jurisdictions are catching on and increasingly marketing themselves as attractive venues for debtors in what is becoming more of a global market place.

 

Lessons re-learnt

Distressed Debt Investors

Many creditors seek to de-risk their position in the context of a restructuring by selling down their loans to distressed debt investors. This can drastically change the dynamics of a transaction and debtors and creditors should bear in mind how new entrants can cause a potentially drastic shift in strategy. Similarly company sponsors may look to buy out debt to acquire key voting rights and creditors should consider how to prevent this when preparing the original documentation.

 

Plan “B”

It is critical for creditors to have a “Plan B” to ensure that they are not cornered into a restructuring that they are not entirely comfortable with. If there is no credible “Plan B”, debtors will be aware of this and this may impact the negotiating strength of creditors during a restructuring.

For example, enforcement can be an effective option but there are a number of legal and operational aspects that have to be considered. Creditors will have to consider sale logistics before exercising rights under a mortgage (e.g. public auction or private sale etc.) as well as the practicalities (including impact on timing) of arresting a vessel and what is required to ensure it remains crewed and operational. Enforcing share security can provide creditors with an alternative enforcement method (among others) but creditors need to also be aware of the potential risks involved, including exposure to intercompany liabilities and related claims, procuring replacement directors and funding D&O insurance and potential third-party liability in relation to a vessel.

 

Restructuring processes and the options available to all parties are continuing to evolve. Ultimately, getting involved early and securing a ‘Plan B’ remain key to creditors but they should also be prepared to adapt to the circumstances as they materialise. Unpredictability is par for the course, and being able to prepare and adapt is essential. These experiences are too easy to forget and creditors need to also bear these lessons in mind when they come to structuring new transactions.

 

Take a look at our restructuring hub for further insights, topics and trends.

This year’s theme of ‘reframing risk in a complex market’ could not be more pertinent. The shipping sector is evolving rapidly, and with the macro and micro environmental factors at play, shipping has never been at a more crucial juncture.
www.nortonrosefulbright.com/...

Subscribe to our Connections insights Sign-up now

Tags

chapter11, transport, restructuring

Get in touch

Avatar
Nicholas Papadopoulos
Senior Associate

Get in touch

Avatar
Nicholas Papadopoulos
Senior Associate
Key takeaways from MIPIM 2025: Future-proofing data centres
3/25/2025 4:21:32 PM

Key takeaways from MIPIM 2025: Future-proofing data centres

By Kirsty Harrower
As the digital infrastructure landscape continues to evolve, increasing AI workloads present both challenges and opportunities for data...
1
35
36

Latest Insights

Summer reading arrived early: European Commission aims for balancing act in its review of merger guidelines
5/9/2025 8:36:59 AM

Summer reading arrived early: European Commission aims for balancing act in its review of merger guidelines

By Alexandra Rogers Sabine Holinde
23
23
Shaping future successes: My takeaways from "An evening with Annie Vernon"
5/8/2025 1:38:17 PM

Shaping future successes: My takeaways from "An evening with Annie Vernon"

By Emma Humphries
Maritime decarbonisation: Current issues facing shipping companies
5/1/2025 1:36:52 PM

Maritime decarbonisation: Current issues facing shipping companies

By Kelli Bodal Hansen Philip Roche
13
13

Explore our site

  • About
  • Careers
  • Diversity, equity and inclusion
  • People
  • Services
  • Insights
  • News

Key industries

  • Consumer markets
  • Energy, infrastructure and resources
  • Financial institutions
  • Life sciences and healthcare
  • Technology
  • Transport

Locations

  • Global coverage

Norton Rose Fulbright © 2024. All Rights Reserved.

  • Amsterdam
  • ●
  • Athens
  • ●
  • Austin
  • ●
  • Bangkok
  • ●
  • Beijing
  • ●
  • Brisbane
  • ●
  • Brussels
  • ●
  • Bujumbura**
  • ●
  • Calgary
  • ●
  • Canberra
  • ●
  • Cape Town
  • ●
  • Casablanca
  • ●
  • Dallas
  • ●
  • Denver
  • ●
  • Dubai
  • ●
  • Durban
  • ●
  • Düsseldorf
  • ●
  • Frankfurt
  • ●
  • Hamburg
  • ●
  • Harare**
  • ●
  • Hong Kong SAR
  • ●
  • Houston
  • ●
  • Istanbul
  • ●
  • Jakarta*
  • ●
  • Johannesburg
  • ●
  • Kampala**
  • ●
  • London
  • ●
  • Los Angeles
  • ●
  • Luxembourg
  • ●
  • Melbourne
  • ●
  • Mexico City
  • ●
  • Milan
  • ●
  • Minneapolis
  • ●
  • Monaco
  • ●
  • Montréal
  • ●
  • Munich
  • ●
  • Newcastle
  • ●
  • New York
  • ●
  • Nairobi**
  • ●
  • Ottawa
  • ●
  • Paris
  • ●
  • Perth
  • ●
  • Piraeus
  • ●
  • Québec
  • ●
  • Riyadh*
  • ●
  • San Antonio
  • ●
  • San Francisco
  • ●
  • São Paulo
  • ●
  • Shanghai
  • ●
  • Singapore
  • ●
  • St. Louis
  • ●
  • Sydney
  • ●
  • Tokyo
  • ●
  • Toronto
  • ●
  • Vancouver
  • ●
  • Warsaw
  • ●
  • Washington DC *associate office **alliance
  • Legal notices and disclaimers
  • Impressum
  • Standard terms
  • Blog network terms and conditions
  • Cookies policy
  • Privacy notice
  • Website access conditions
  • Fraud alerts
  • Modern Slavery Statements
  • Health plan machine readable files
  • Anti-Facilitation of Tax Evasion Statement
  • Suppliers
  • History
  • Remote access
  • Sitemap
Offices and locations

Norton Rose Fulbright © 2024. All Rights Reserved.

  • Amsterdam
  • ●
  • Athens
  • ●
  • Austin
  • ●
  • Bangkok
  • ●
  • Beijing
  • ●
  • Brisbane
  • ●
  • Brussels
  • ●
  • Bujumbura**
  • ●
  • Calgary
  • ●
  • Canberra
  • ●
  • Cape Town
  • ●
  • Casablanca
  • ●
  • Dallas
  • ●
  • Denver
  • ●
  • Dubai
  • ●
  • Durban
  • ●
  • Düsseldorf
  • ●
  • Frankfurt
  • ●
  • Hamburg
  • ●
  • Harare**
  • ●
  • Hong Kong SAR
  • ●
  • Houston
  • ●
  • Istanbul
  • ●
  • Jakarta*
  • ●
  • Johannesburg
  • ●
  • Kampala**
  • ●
  • London
  • ●
  • Los Angeles
  • ●
  • Luxembourg
  • ●
  • Melbourne
  • ●
  • Mexico City
  • ●
  • Milan
  • ●
  • Minneapolis
  • ●
  • Monaco
  • ●
  • Montréal
  • ●
  • Munich
  • ●
  • Newcastle
  • ●
  • New York
  • ●
  • Nairobi**
  • ●
  • Ottawa
  • ●
  • Paris
  • ●
  • Perth
  • ●
  • Piraeus
  • ●
  • Québec
  • ●
  • Riyadh*
  • ●
  • San Antonio
  • ●
  • San Francisco
  • ●
  • São Paulo
  • ●
  • Shanghai
  • ●
  • Singapore
  • ●
  • St. Louis
  • ●
  • Sydney
  • ●
  • Tokyo
  • ●
  • Toronto
  • ●
  • Vancouver
  • ●
  • Warsaw
  • ●
  • Washington DC *associate office **alliance
Policies and disclaimers
  • Legal notices and disclaimers
  • Impressum
  • Standard terms
  • Blog network terms and conditions
  • Cookies policy
  • Privacy notice
  • Website access conditions
  • Fraud alerts
  • Modern Slavery Statements
  • Health plan machine readable files
  • Anti-Facilitation of Tax Evasion Statement
  • Suppliers
  • History
  • Remote access
  • Sitemap
Visit our global site, or select a location
North America
  • Canada (English)
  • Canada (Français)
  • United States
Latin America
  • Brazil
  • Mexico
Europe
  • Belgium
  • Deutschland (Deutsch)
  • France
  • Germany (English)
  • Greece
  • Italy
  • Luxembourg
  • Poland
  • The Netherlands
  • Turkey
  • United Kingdom
Middle East
Africa
  • Burundi
  • Kenya
  • Morocco
  • South Africa
  • Uganda
  • Zimbabwe
Asia Pacific
  • Australia
  • China
  • Hong Kong SAR
  • Indonesia
  • Japan
  • Singapore
  • Thailand
Regional practices
  • India
  • Israel
  • Korea
  • Marshall Islands
  • Nordic region
  • Pakistan
  • Vietnam