Case Nos: CL-2023-000206 and CL-2023-000207 - [2025] EWHC 1591 (Comm)

In July 2015 Charterers proposed a restructuring plan to their lenders (including Owners) on an all-creditors basis. In September 2015 Charterers sent a further all-creditors restructuring proposal. These proposals included a debt repayment holiday, followed by a period in which a ‘cash-sweep’/pay-as-you-earn mechanism would be applied to repay senior lenders/financial owners. The September 2015 proposal was sent in a letter from Charterers which also noted that Charterers were soon going to ‘run out of cash’.

The proposals were rejected by some lenders, as acknowledged by Charterers in an email sent to Owners on 8 October 2015. Instead Charterers said that they would begin restructuring their debts lender-by-lender.

On 26 October 2015 Sidat Senanayake, a Vice-President at DVB, sent a restructuring proposal to Charterers, Owners and Guarantors containing terms which DVB was prepared to recommend to its directors. This proposal included an extendable pay-as-you-earn period, and service of interest from Charterers’ shareholder funds.

Following negotiations on these terms, DVB agreed in principle to the proposal by 17 December 2015. Martin van Tuijl of DVB recommended that the parties instruct lawyers to draft detailed term sheets. It was subsequent to these negotiations that Charterers stopped paying hire under the Charterparties.