Singapore court appoints Ernst & Young as judicial manager for Ocean Tankers

Singapore — Singapore's High Court has granted the application by shipowner Ocean Tankers to be placed under judicial management at the same time partners from the accounting firm Ernst & Young were appointed interim judicial managers after a hearing on Tuesday morning, a source said.

An order for judicial management involves a third-party manager being appointed by the court to take over the management of the company in place of the original directors.

This is a departure from its previous request where Ocean Tankers had applied for protection under Section 211B of the Companies Act. That application was withdrawn today.

Both processes have provisions for moratoriums for claims against the company but the main difference is that under judicial management, Ocean Tankers' directors will not maintain control over the business. Hence, judicial managers give more comfort to creditors if they believe the directors may not act in their interests.

Ocean Tankers' sister company Hin Leong Trading, both owned and operated by the Lim family, had also initially applied for Section 211B protection but then changed it to third-party judicial management.

The judicial managers will make an interim assessment on whether the company can be restructured or rehabilitated, with an approval from the majority of creditors, who prefer this route to winding up the company as it improves their chances for debt recovery.

Law firm Rajah & Tann Singapore LLP is the legal adviser to Ocean Tankers.