Bunker Lawyers Identify One Car for Creditors as Assets Reviewed

So far, the trustees of bankrupt OW Bunker A/S have identified a single car they say can be liquidated to start building funds with which to reimburse creditors.

That’s according to John Sommer Schmidt, an Aarhus-based attorney and partner at Gorrissen Federspiel Law Firm, who is overseeing the winding-up process. He didn’t reveal the car’s brand or model.

All the company’s other cars were leased, he said on Friday in a phone interview. “It’s much too soon to say what, if anything, will be left for the creditors.”

Denmark’s investor community has looked on in disbelief as a coveted new arrival on the stock market valued at $1 billion just eight months ago imploded at the beginning of this month. The banks who brought OW Bunker to market say they are “shocked” while the private equity fund behind the listing says it only learned this month of the risk-management failures and alleged fraud that undid the 34-year-old company.

Meanwhile, the trustees appointed to find any value in the shipping fuel provider are struggling to identify liquid assets.

“The problem with this bankruptcy has been that the company didn’t have any cash or bank accounts that could fund work to unwind the company and pay the people taking care of the estate,” Sommer Schmidt said. “We’ve discussed funding with some of OW Bunker’s banks as they also have an interest in recovering as many assets as possible. We certainly hope to recover many assets, but it’s premature to guess just how many.”
International Tremors

The company declared bankruptcy on Nov. 7 after its banks refused to extend credit following revelations of alleged fraud that cost OW Bunker $125 million and risk-management losses that wiped out a further $150 million. The company said it plans to file charges against two Singapore-based employees it alleges were behind the fraud.

Lawyers representing the two say no charges have been filed, while police in Denmark say they may start a separate investigation of OW Bunker as they wait for it to report the two employees.

The bankruptcy has caused tremors across the globe. In the U.S., three of the company’s units filed for Chapter 11 protection. OW Bunker units have been sued for $19.8 million in Singapore’s High Court as the company’s failure prompts a tightening of payment terms and undermines confidence in the world’s largest market for the shipping fuel.

“We’ve scrambled to protect assets,” Sommer Schmidt said. “That’s been our top priority, so we’ve delayed deciding on the issue of possibly pushing charges as that’s not going away.”

Even if the trustees do manage to recover enough assets to cover claims, creditors need to brace themselves for a long wait he said.

“An estate of this size doesn’t just get wound up in three months,” Sommer Schmidt said. “And if someone decides to sue, it could add another two years to the process.”
Source: Bloomberg