U.S. Judge Gives Hanjin Shipping a Reprieve Allowing Ships to Dock

Korean shipping line Hanjin Shipping received a shot in the arm on Tuesday from a U.S. judge who extended bankruptcy protections to the struggling company so that its ships can dock at U.S. ports without fear creditors will try to take actions against the ships as they have in other countries according to Reuters.

U.S. Bankruptcy Judge John Sherwood approved a motion by Hanjin Shipping who sought to extend to the United States the protection from creditors which it has also done in home country South Korea.

Sherwood said he allowed the interim order after a lawyer from Hanjin said the company would surely raise $100 million for the shipping line to meet its cargo commitments.

The motion prohibits U.S. creditors from taking immediate actions against the company's ships and other assets.

However, the order is temporary and Hanjin will need to return to court on Friday for a final order after talks with stakeholders to try to resolve complex problems involving ports, terminal operators and retailers, Judge Sherwood said in a statement.

Reuters said that Hanjin filed for what is known as Chapter 15 bankruptcy protection in the United States and sought an order recognizing proceedings in South Korea and protecting its U.S. assets.

Some Hanjin vessels have not be allowed to dock due to uncertainty about the company's finances.

As of Monday, 70 Hanjin ships had been denied access to ports and three had been seized in Singapore and China by creditors through court orders.

Hanjin's possible bankruptcy is causing alarm in U.S. retailers who are anticipating to fill their shelves with shipments of Asian-made merchandise for the holiday shopping season.