South Korean Court to Liquidate Hanjin Shipping

The South Korean court said Thursday that it plans to declare the carrier bankrupt, paving the way for its liquidation. There will be a two-week review period for creditors to weigh in on the court's decision. The court said that Hanjin's value in liquidation exceeds its value as a going concern.

PricewaterhouseCoopers put the value of Hanjin's holdings at $1.5 billion.

The court has already sold core assets like the container line's U.S. terminal operations (now owned by Hyundai Merchant Marine and MSC) and its Asia-North America shipping routes (purchased by Korean firm SM Group) and will form the basis of a new shipping line, SM Shipping.

The New York Shipping Association-International Longshoremen’s Association Pension Trust Fund alleges that Hanjin Shipping owes $31 million for its withdrawal from future pension contributions. If the U.S. and Korean bankruptcy courts agree that Hanjin Group might also be held liable for the carrier’s obligations, it could potentially open the door to new lawsuits from other Hanjin Shipping creditors, who claim a total of $26 billion in debts.