Under a proposed bankruptcy plan, US Shipping is asking a federal judge in New York to reject its contract for the 49,000-dwt products tankers at the yard.
But San Diego’s Nassco says it wants the contract to be considered breached, rather than terminated, so that it can retain its right to sell the vessels as designed.
The 49,000-dwt Golden State (built 2009) was the first of the nine Nassco tankers.
That would allow it to continue to build the vessel under American Bureau of Shipping (ABS) requirements in place at the time of the contract. Such an option is not available if it terminates the contract and builds the ship under a new deal, Nassco argues.
“A contract today for an identical tanker would require changes to the vessels’ design and hundreds of metric tonnes more steel in order to meet changes in the ABS standards,” Nassco told Judge Robert Drain.
Edison, New Jersey-based US Shipping, which owns 11 tankers and tank-barge units, is planning to emerge from Chapter 11 next month as a private corporation led by current operations chief Joseph Gehegan and controlled by bondholders.
In 2006, US Shipping and the private equity firm Blackstone Group formed a joint venture to build five 49,000-dwt products tankers at National Steel & Shipbuilding Co (Nassco), with options for four more.
After the owner’s bankruptcy filing, the parties forged a settlement that put the five initial tankers in the hands of Blackstone Group, which has formed American Petroleum Tankers to own the ships.
The firm, however, did not have a stake in the final four vessels.
A US Shipping representative was not immediately available to comment on Nassco’s filing.
A hearing to consider US Shipping’s bankruptcy plan is slated for 1 October.