Daewoo Logistics Corp., a Seoul-based shipping and logistics provider, asked a U.S. bankruptcy court for protection from creditors and lawsuits while it reorganizes in Korea.
Daewoo Logistics` Chapter 15 petition, filed yesterday in U.S. Bankruptcy Court in Manhattan, listed as much as $500 million in debt and assets. The company sought protection under Korean law on July 3, Ahn Yong-nam, the receiver appointed by Seoul Central District Court, said in a U.S. court filing.
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A "meltdown" in shipping demand amid the global recession shrank profits and reduced the value of dry-bulk contracts for transporting products such as ores and grains, the company said. Daewoo Logistics also "was adversely affected by the collapse of an agreement to purchase land in Madagascar, following a military coup," Ahn said in the filing.
Daewoo Logistics, established in 1999 from a unit of the Daewoo group of companies, also develops natural resources and has pursued projects in palm oil, gum, corn farming and coal mining since 2006, according to the company`s Web site.
Under Chapter 15 of the U.S. Bankruptcy Code, companies win stays against legal proceedings and can organize U.S. creditors in support of a main proceeding in another country. Daewoo`s Seoul reorganization is a "foreign main proceeding," justifying the U.S. protection, Ahn said. (Bloomberg)