Lugenbuhl’s marine finance group has extensive experience in the documentation, registration, and financing of vessels, a practice that requires navigation of a complex interface of federal, state and international laws.
Our clients include national and regional financial institutions, finance and leasing companies, and vessel operators. We utilize our experience to assist our clients in every stage, including: the structuring of proposals, commitments, and agreements; transaction due diligence and investigations; negotiating, drafting, and preparing of transaction documentation; and closing and registration. Over the last decade, we have successfully completed numerous sale, acquisition, financing, leasing, and restructuring transactions involving both United States and foreign-flag vessels and related assets.
We regularly assist banks, finance companies, and shipping clients in all phases of the structuring, documentation, and completion of term loan facilities, revolving credit facilities, lines of credit, purchase money loans, syndicated loans and agented credits, and other debt financings secured by liens on commercial and recreational vessels and related assets, including:
- Loans and other obligations secured by preferred-ship mortgages, including mortgages encumbering U.S. flag vessels under the Ship Mortgage Act, 46 U.S.C. §30301, et seq. and foreign-preferred mortgages under the laws of various flags such as the Republic of Vanuatu, the Marshall Islands, and the Bahamas
- Vessel-construction loans secured by construction contract assignments and security interests in the work in progress and related components under the Uniform Commercial Code and other state and federal laws
- Loans and other obligations secured by security interests in vessel-related assets such as charter agreements, freights, charter hire, and other accounts and insurances created under the Uniform Commercial Code, the general maritime law, and various state laws
A frequently attractive alternative to traditional debt financing is leasing. We regularly assist in all phases of the structuring, documentation, and completion of sale/leasebacks, finance leases, and tax leases of vessels, including leveraged lease structures, cross-border, and other leases structured through U.S. citizen trusts, as well as synthetic leases for appropriate vessels. We also assist the U.S. subsidiary financing companies of foreign banks with qualification under 46 U.S.C. §12119 to enable them to provide lease financing of vessels used in the coastwise trade to Jones Act citizen lessees.
Because valid documentation and trade endorsements are essential for the lawful operation of vessels, and because, under the Ship Mortgage Act, a preferred-ship mortgage may be granted only against a documented vessel, we regularly assist shipping companies, banks, and finance companies to ensure that the vessels that they operate or that they use as collateral for loans are properly documented with the Coast Guard and other registries. Among the tasks we undertake for our clients are:
- Examining the title of vessels in connection with acquisitions and mortgages
- Examining and structuring corporations, partnerships, limited liability companies and other entities to ensure that they meet the U.S. citizenship requirements for documentation
- Determining whether the intended use of the vessel requires that the vessel be documented with a coastwise endorsement under the Jones Act
- Advising clients on documentation, operational, and transfer restrictions imposed under the Jones Act, 46 U.S.C. §56101 et seq., and Section 607 of the Merchant Marine Act, 1936, as amended, and other shipping statutes and regulations
- Preparing and filing necessary applications, certifications, affidavits, and other documentation necessary for documentation of vessels
Workouts, Restructurings and Foreclosure of Marine Finance Transactions
Lugenbuhl’s marine finance group frequently represents banks, finance companies, and vessel operators in workouts, restructurings, and foreclosure of marine loans and leases. Within our bankruptcy, restructuring, and creditor’s rights group, we have extensive experience when it comes to handling marine bankruptcies.