TBS Accepts Chapter 11 Reorganization Plan

TBS International has accepted a prepackaged Chapter 11 Plan of Reorganization that was filed this week with the U.S. Bankruptcy Court in the Southern District of New York.

The company’s operations will continue as usual during the Chapter 11 process, which is to conclude within 60 days. TBS has sought approval to pay all foreign and critical vendors as well as wages and benefits for its employees.

Subject to court approval, TBS has obtained debtor-in-possession financing of US$42.8 million to fund operations during the reorganization.

"I want to emphasize that this agreement ensures that our vessels will not be arrested and cargo will get to its destination as scheduled," Joseph E. Royce, TBS International's chief executive officer, said in a statement.

Ownership of the company will be transferred to a newly formed entity that will be owned principally by the lenders.

"As a result of the restructuring, we should be positioned to be a financially sound competitor in our global markets," Royce said. The carrier will emerge as a privately held company when the restructuring is complete.