OW Bunker: Over $100M Collected, $1B Still to Play For

"There’s absolutely no predictability in the law," said Sommer Schmidt

OW Bunker's administrators have managed to claw back over $100 million so far in the process of winding up the company, but $1 billion worth of receivables are proving hard to collect, Tradewinds reports.

One of the administrators on the job, Gorrissen Federspiel partner John Sommer Schmidt, this month said the team has recovered around $100 million from the sale of oil stocks on hand at the time of OW Bunker's collapse.

In addition, the settlement of in-the-money oil derivatives has allowed the administrators to recover a further $8 million for creditors.

And Sommer Schmidt said there are potentially tens of millions of dollars worth of further derivatives contracts which are proving difficult to sell under English law, so administrators are trying to bring them under Danish jurisdiction instead.

But the bigger prize is OW Bunker's receivables of over $1 billion and it is proving hard to get at.

Competing claims for payment in relation to supplies of bunkers by OW Bunker in administration, physical suppliers, and creditor banks have made shipoowners reticent to pay for bunkers they received for fear of being landed with the same bill twice.

"What we are seeing is that a lot of shipowners would actually like to pay but they don't know to whom to pay to," Sommer Schmidt told Tradewinds.

"I will not or can't today give you the answer on how this will end - there's legal proceedings going on basically everywhere and we'll probably have to wait and see how those turn out before we will be able to know exactly how this will end up."

He said that more problems lie ahead before a resolution will be found, adding that "there's absolutely no predictability in the law in this respect."

But administrators are looking to Cooperation Agreements (CAs) to try to push forward with collecting money from debtors while decisions about who has the right to it continue.

"Co-operation agreements have been set up worldwide between all, or at least most, major jurisdictions where OW Bunker was active, and the global receivers and the Danish estates," Sommer Schmidt was quoted by Tradewinds as saying.

Danish media are understood to have predicted that creditors' claims against OW Bunker, which have not all been filed to date, will total around $2 billion.

This week, Dubai law firm Fichte & Co. said a CA between Dutch bank ING and OW Bunker's administrators might break the deadlock over the collection of cash from debtors, but suggested UAE-based players were likely to fight any agreement that weakened physical suppliers' claims for payment.