European shipowners will increasingly seek bankruptcy protection in the US in 2012 as they attempt to retain control of their fleets while negotiating with lenders, said law firm Cadwalader, Wickersham & Taft LLP.

Filing for Chapter 11 protection in US courts means no receivers are appointed to run a company and reaching agreement with banks is easier, Gregory Petrick, a partner at the firm, said at a conference in London today. A company needs agreement from half the creditors representing two-thirds of its borrowings to ratify any debt reorganization arising from a Chapter 11 filing, he said.

"Those advantages owners have discovered, and we expect to see increasing moves to Chapter 11 filings for European-based shipping companies," Petrick said. "It gives the owner breathing room to ride out the cycle."
 
 
Source: mb