Maritime Group 2011 Year in Review - Seward and Kissel

One Battery Park PlazaNew York, NY 10004212-574-12001200 G Street, NWWashington, DC 20005202-737-8833www.sewkis.comSEWARD & KISSEL LLPMARITIME GROUP2011YEAR IN REVIEWSEWARD & KISSEL LLPwww.sewkis.comSEWARD & KISSEL LLPwww.sewkis.com

To Our Friends and ClientsThe Maritime Industry saw many changes in 2011. The full impact ofthose changes may not be known for years to come, but one thing iscertain: the Maritime Industry as we know it will never be the same.through these tumultuous times. Our unique insight andcapabilities have been honed through decades of experience inboth good and bad markets. We have been involved in all facets ofthe U.S. Maritime Industry including ship finance, public offeringsSome of the changes raise questions that will only be answered withthe passage of time. For instance, will the decision of the BankruptcyCourt in Marco Polo o Seatrade ade B.V. open the floodgates for Unitedand private placements, private equity investments, purchasesand sales, and mergers and acquisitions, and have acted in variedcapacities in each of these types of transactions.States bankruptcy filings of foreign shipping companies with onlytenuous connections to the United States? Will the lending windowthat seemed to be opening in early 2011, and that was slammedshut again during the summer, reopen? If so, who will be lending toshipping companies and on what terms? What role will private equityplay in the Maritime Industry going forward? Will private equity be thesource of funding to keep shipping companies alive or will it be thereto pick up the pieces if the bottom truly falls out? How will the SEC’snew rules relating to foreign issuers impact shipping companies’access to the United States capital markets and will Dodd-Frank’ ’s “SaySeward & Kissel LLP is the industry leader among U.S. law firms inthe shipping arena. Our attorneys are experienced in handling thetransactions and the issues that arise when the shipping marketsexpand and when they contract. From the restructurings andbankruptcies of the 1980s, through the boom and bust of the highyield market in the late 1990s and early 2000s; from the flourishingloan and public offering markets in the mid-2000s, to the mostrecent foreclosures, restructurings and insolvencies, Seward &Kissel attorneys have been involved every step of the way.on Pay” and “Claw Back” provisions have a cooling effect on privateshipowners’ desire to go public in the United States?We are pleased to provide guidance to our clients in these difficulttimes and look forward to continuing to assist our clients as theThe questions are endless and the answers uncertain, but whateverthe outcome, Seward & Kissel will be there to help guide its clientsMaritime Industry finds its bearing and charts the course for 2012and beyond.Seward & Kissel LLP1SEWARD & KISSEL LLPwww.sewkis.comSEWARD & KISSEL LLPwww.sewkis.com

New York Bankrupcy Court setsLow Bar for Chapter 11 Eligibility forForeign Shipping CompaniesOn October 21, 2011, the U.S. Bankruptcy Court in New York rendereda key decision in the bankruptcy cases of Marco Polo Seatrade B.V.(“Marco Polo”) and its affiliated debtors (collectively the “Debtors”)determining that entities with few and minimal ties to the UnitedStates are eligible to be Chapter 11 debtors. In its bench decision,the Court found that a cash retainer paid to the Debtors’ New Yorklawyer which remained in escrow, and one Debtor’s interest in a U.S.shipping pool account, each constituted “property” of the Debtorsin the United States, satisfying the Chapter 11 debtor eligibilityrequirements. That the Debtors were all Dutch entities with no placeof business or employees in the United States did not alter the U.S.Bankruptcy Code’s “relatively low bar” for “property sufficient toestablish [Chapter 11] eligibility”.The decision in Marco Polo will be encouraging to other foreigndebtors with limited connections to the United States who wish toseek Chapter 11 relief and the protections available under the U.S.Bankruptcy Code, including the automatic stay. The automatic stay,which on its face has global reach, in theory, may be particularlybeneficial to foreign shipping companies who have an internationalbusiness with assets (and creditors that can reach those assets)located around the world. Indeed, foreign shipping companies withseparate vessel owning companies may find Chapter 11 especiallyuseful to thwart enforcement actions taken by lenders and certainother creditors against the vessels in several different forums.On the other hand, the effectiveness of the automatic stay inpreventing foreign creditors without a U.S. presence from seizingassets abroad remains questionable. In other words, a creditorwithout contacts (i.e., a residence or business assets) in the UnitedStates may choose to disregard the automatic stay and seize assetsabroad if it believes that there is no effective way to enforce theautomatic stay against it.All in all, the Court’s decision in Marco Polo will be seen as badnews for secured and unsecured creditors of international shippingcompanies that have few connections to the United States, assuch creditors may not have anticipated a bankruptcy filing in aU.S. Bankruptcy Court when extending credit and would preferto foreclose on their collateral immediately or resort to individualattachment remedies. Nonetheless, in a situation in which a foreigndebtor has few unencumbered assets available or has assets thatare underwater, but would have value as a going concern,reorganizing through Chapter 11 may be the better option forforeign debtors and creditors alike.2011 Corporate Governance DevelopmentsThe Dodd-Frank Wall Street Reform and Consumer Protection Act, or (the “Dodd-Frank Act”), was adopted in 2010 and included provisions affectingthe corporate governance practices of U.S. listed companies. Several of these provisions came into effect during 2011 with the implementation ofrules and regulations of U.S. regulatory agencies, such as the U.S. Securities and Exchange Commission (the “SEC”) and the securities exchanges,such as the New York Stock Exchange (“NYSE”) and NASDAQ, while others are expected to become effective during 2012. Key provisions of theDodd-Frank Act relating to public company corporate governance include the following:Proxy Statement Compensation DisclosureStock Exchange RulesBeginning with the 2011 proxy season, SEC rules governing The Dodd-Frank Act has also mandated that stock exchangesshareholder meeting proxy materials of domestic issuers required the adopt “Claw Back” rules that would require a listed company toinclusion of a non-binding “Say on Pay” shareholder vote on senior adopt and disclose a policy requiring it to recover incentive basedexecutive compensation. Under the new rules, shareholders may compensation paid to executive officers within the past three yearsdetermine how often the vote must be taken, but it must be at least in the event of a restatement of the company’s financial statements.once every three years. While the vote is not binding on the company, The amount recovered would be limited to the difference betweenthe results of the shareholder vote must be publicly disclosed.what was paid and what would have been paid under the restatedfinancial statements. Unlike similar requirements implementedProposed SEC proxy rule changes mandated by the Dodd-Frank under the Sarbanes-Oxley Act of 2002, the Dodd-Frank Act appliesAct that are expected to be adopted during 2012 would require to all executive officers, not just the CEO and CFO, goes back threeadditional disclosure by domestic issuers about certain compensatory years rather than one year, and does not require a showing ofmatters including (i) any “golden parachute” arrangement relating to misconduct on the part of the affected officer.executive compensation based on or otherwise relating to a merger,acquisition or similar transaction by the company, which under certain Stock exchanges are also expected to adopt rules that will imposecircumstances may also be subject to a non-binding shareholder vote; stricter requirements on the independence of a listed company’s(ii) “pay vs. performance” disclosure about the relationship between a compensation committee members that will be similar to what iscompany’s financial performance and executive compensation; and (iii) currently required for audit committee members. Additionally,the ratio of the total annual compensation of a company’s chief executive professional advisors to a compensation committee, including legalofficer to the median annual compensation of all other employees.counsel and compensation consultants, will also be required to meetprescribed independence standards. Both the NYSE and NASDAQThe disclosure matters discussed above are required to be included are expected to adopt such rules during 2012, which will likely applyin shareholder proxy materials subject to applicable SEC proxy rules, to both domestic and foreign private issuers.which generally do not apply to foreign issuers that are listed in theUnited States.2SEWARD & KISSEL LLPwww.sewkis.com3SEWARD & KISSEL LLPwww.sewkis.com

SEC and U.S. Stock Exchanges Take Tough Stance on Listings byReverse Merger Companies and Other Foreign CompaniesLiquidity and Funding Concerns: The Impact on Loan DocumentationAside from concerns about the solvency or insolvency of many privateand public shipping companies as a result of continued depressedcharter rates, the most pressing concern in the shipping industryappears to be the cost and/or absence of bank financing. Just ayear ago, most commentators opined that this was a momentaryconcern and that, aside from a few truly structurally damaged lendinginstitutions, the path to normalcy was evident and the traditionallyactive shipping banks would reassert themselves. Now, the structuralconcerns are with the debt markets generally, not just particularinstitutions. Although the volume of deals has plummeted, somedeals have closed during the past year. What do the deals that didclose successfully tell us about the cost of funding and the efforts ofbanks to address it?The problem was, of course, that as the calendar turned from 2007into 2008, LIBOR increasingly became an abstract construct forbanks; it no longer accurately reflected the cost of a bank’s funding.The reasons for this are varied but, simply put, although LIBORwas intended to reflect the rate at which banks could borrow (andtheoretically should have, since it was a rate quoted by a panel ofbanks), it no longer did. Banks that were charging customers a spreadover published LIBOR were, in some cases, collecting less interestthan they in turn had to pay the market for any funds over and abovetheir own capital. What about those market disruption clauses? Wasthis a case of market disruption? Perhaps, but the standard loanagreement terms defined market disruption in this context as LIBORnot being quoted; rarely did loan documents address the circumstancewhere quoted LIBOR was simply no longer an accurate measure.For many years, members of the staff of the U.S. Securities andExchange Commission (the “SEC”) have noted a concern that publiccompanies resulting from reverse mergers of private operatingcompanies based overseas into U.S. public shell companies can be usedby their sponsors as vehicles for abuse through market manipulationand other fraudulent tactics in the trading markets. In mid-2010, theSEC undertook an initiative regarding the quality of financial reportingand auditing of foreign companies with a particular focus on reversemerger companies. The SEC has stated that its initiative resulted intrading halts or suspensions of securities of more than 35 foreignbasedcompanies, including noted reverse merger companies suchas Heli Electronics Corp. (HELI) and RINO International Corporation(RINO). Further, in June 2011, the SEC issued an investor bulletin toalert the public to the risks of investing in reverse merger companies.On November 9, 2011, the SEC approved rules for the three majorU.S. stock exchanges (NASDAQ, NYSE and NYSE Amex) thatintroduced new tough listing requirements applicable to companiesthat became public by way of a reverse merger. Under the newstock exchange rules, a reverse merger company may not, except incertain limited circumstances, apply for a listing on NASDAQ, NYSEor NYSE Amex until the reverse merger has been completed and,thereafter, the company’s securities have traded for at least one yearin the U.S. over-the-counter market or on another regulated U.S. orforeign exchange, the company has filed all reports with the SEC asrequired during that year (including audited financial statements) andthe company has maintained the required minimum share price forthe relevant exchange for at least 30 of the 60 days prior to both thesubmission of the listing application and the time that the exchangerenders a listing decision. One notable exception to these trading,filing and share price conditions is the case where a reverse mergercompany has applied for the stock exchange listing in connection witha “substantial” firm commitment, underwritten public offering of itssecurities. The SEC noted that such a case “presents less risk andwarrants the same treatment as issuers that were not formed througha reverse merger.”On a related topic, on December 8, 2011, the SEC announced changesto its non-public review process for foreign private issuers that arefirst-time filers. The process was beneficial to new foreign entrantsto the U.S. capital markets because it allowed them to experiencethe SEC review process in a non-public forum before going public.Virtually all foreign shipping companies that entered the U.S. publicmarkets benefited from this “quiet filing” process. In a significantchange of policy, the SEC stated that it will no longer reviewregistration statements submitted to the SEC on a non-public basisby a first-time filer, other than a foreign private issuer that is: listed,or is concurrently listing, securities on a non-U.S. exchange; isbeing privatized by a foreign government; or can demonstrate thata public filing would conflict with the law of an applicable foreignjurisdiction. In particular, the SEC noted that shell companies, blankcheck companies and issuers with no or substantially no businessoperations (e.g., special purpose acquisition companies, or “SPACs”)will not be allowed to use the non-public submission process. Forcompanies already in the non-public review process, the SEC notesthat the next draft of the registration statement that is filed must befiled publicly via the SEC’s EDGAR website.Loan documents today are not what they were a mere five years ago,particularly interest rate provisions. Beginning with the onset of thebank liquidity crisis in late 2007, a revolution of sorts occurred in thedrafting of loan provisions relating to interest rates for dollar loansnotionally funded in the London interbank market (“LIBOR”), the mostcommon loans in the shipping industry. Historically, shipping loansalmost always were based on a spread (i.e., margin) over the rate atwhich banks funded themselves in the interbank market, whethersuch funding was “matched” or notional. Twenty-five years ago it wascommon to see loan agreement provisions that definitionally linkedthe base rate or LIBOR to the amount charged to the lender in theinterbank market (as determined by the relevant bank). However,beginning in the late 1980s with the development of the British Bankers’Association (“BBA”) standards of settling interest rates and the growthof electronic dissemination of these rates, a determination of LIBORreflecting the general market became the new standard. After all, whyshould a borrower do business with a bank that charged an effectivelyhigher interest rate because that bank might have difficulty fundingitself? Loan agreement provisions evolved to reflect the newerstandard, and LIBOR as a base rate became the amount quoted bythe BBA (as determined by a panel of bank members of the BBA) andsubsequently published via Reuters, Telerate or Bloomberg, as thecase may be. Now, a borrower could essentially get the same baseinterest rate from each bank and could compare “apples to apples”in assessing financing offers. While loan agreements had “marketdisruption” clauses that provided that if LIBOR was not quoted theparties would use their best efforts to determine an alternative baserate, even during the tumultuous times of the liquidity crisis, the BBAcontinued to quote LIBOR.The market responded. Some loan agreements now includeprovisions that address this issue. For example, some loanagreements now provide that in the event that quoted LIBOR nolonger accurately reflects the actual cost of funds in the interbankmarket to the lender (or 50% or more of the lenders in a syndicatedtransaction), such circumstance shall be treated effectively as amarket disruption event even if that term is not used. While inclusionof such provisions is not uniform, their use has been growing amongthe traditional shipping lenders, especially in syndicated deals inthe current weak syndication market. But are these provisionsadequate to protect lenders?The current pressures on banks are not uniformly spread aroundthe market. European lenders in particular have been more severelyaffected by European sovereign debt problems and the slow economicrecovery in Europe generally. If institutions continue to struggle tofund themselves in dollars, they will either exit the market (an optionfor some, a necessity for others) or otherwise adapt. Late in 2011another new interest term was introduced in loan documentation. Atleast one bank (and perhaps others) has proposed including a third legto the interest rate calculation for dollar loans, that is LIBOR plus themargin plus an amount representing the LIBOR/Euro swap spread.Do these developments represent the future? Are they a return tothe past where banks charged a base rate reflecting their own costof funds? Perhaps. Maybe they also beg the return to the marketof better capitalized banks with fewer struggles funding dollar loans,such as United States banks.4 5SEWARD & KISSEL LLPwww.sewkis.comSEWARD & KISSEL LLPwww.sewkis.com

Private Equity Investments in Shipping AssestsThe Foreign Account Tax Compliance ActThe past year has seen extensive interest and the long awaitedinvestment in the shipping industry from private equity investors.These investments were often in the form of acquiring assets inpartnership with an established owner or operator of vessels.The structuring of investments by private equity funds in shippingrequires consideration of several tax issues, some of which areunique in the context of private equity investments. Specifically, willthe holding company and its vessel-owning subsidiaries be classifiedas corporations or pass-through entities for U.S. federal income taxpurposes? If a corporation is used, will the U.S. ownership cause thecorporation to be treated as a controlled foreign corporation (a “CFC”)for U.S. federal income tax purposes? CFC status can result in currentinclusion of undistributed income in certain circumstances and/or therecognition of ordinary income (rather than a long-term capital gain)on a disposition of shares.Private equity investors must also consider whether the type ofincome earned (e.g., bareboat charter income) could cause thecorporation to be treated as a passive foreign investment company(a “PFIC”). Very generally, PFIC status can result in currentinclusion of undistributed income or a punitive interest charge onthe disposition of shares.If the entity is a pass-through, private equity investors mustdetermine whether the entity or its investors are able to qualify forexemption from U.S. federal income tax on its U.S. source shippingincome under Internal Revenue Code Section 883. Of particularnote is that, in order to qualify for the benefits of Section 883, aforeign corporation must generally obtain statements signed underpenalties of perjury establishing its ultimate ownership. Privateequity funds may have difficulty obtaining such statements fromtheir investors.The Foreign Account Tax Compliance Act (“FATCA”) was enacted bythe U.S. Congress in March 2010 primarily in response to the 2009admission by UBS that it was aiding and abetting U.S. investors inopening offshore bank accounts to avoid payment of U.S. taxes. Aspart of its settlement with the U.S. authorities, UBS disclosed thenames of 4,450 U.S. taxpayers with hidden UBS accounts. Accordingto Senator Max Baucus, a principal sponsor of the new legislation,FATCA is aimed at ensuring that “the days of sending [U.S. taxpayer]money offshore to avoid paying U.S. taxes are over”.The new legislation requires that foreign financial institutions(inclusive of banks and brokers) enter into an agreement with theU.S. Treasury to report certain information about their “UnitedStates accounts” to avoid becoming subject to a new 30% U.S.withholding tax regime imposed on the gross amounts of certaincategories of U.S. source income derived from investments madefor its own account and the accounts of all its customers, includingdividends and interest, and the proceeds from the sale of U.S.securities.The term “United States account” in the context of foreign flagshipping firms is defined to include any financial account of a foreignentity that is more than 10% directly or indirectly owned by a U.S.person. Financial accounts established by publicly traded entities areexcluded from the definition of “United States account”.The information required to be reported about each “United Statesaccount” includes: the name, address and tax identification numberof the United States account holder, the account number, theaccount balance and the gross receipts and gross withdrawals fromthe account.Given the dominance of the U.S. capital markets as a source ofinvestment, it is anticipated that all major foreign institutions that lendto or open bank accounts for international shipping companies willenter into the required disclosure agreement with the U.S. Treasury.Even though the IRS has agreed to phase in certain requirementsof FATCA from its stated effective date of January 1, 2013 (e.g.,the 30% withholding regime begins January 1, 2014). Some foreignbanks and institutions are currently establishing, in respect of newaccount openings, the requisite FATCA “due diligence” procedures todetermine whether there are any 10% or more U.S. ultimate ownersin the chain of ownership of customers that would trigger “UnitedStates account” reporting requirements to the U.S. Treasury. Thisis causing issues, in particular, where ultimate beneficial ownershiptraces back to trusts, even those of a fully discretionary nature,under which one or more U.S persons may be named as outrightbeneficiaries or as part of a discretionary beneficiary class.In addition to its application to foreign financial institutions, FATCA alsoapplies in a more limited way to foreign taxpayers who are not financialinstitutions. Under these rules, a non-U.S. person will be subject to a30% U.S. withholding tax on payments of certain types of U.S. sourceincome (including rental income), unless the non-U.S. person certifiesthat it does not have any 10% U.S. (direct or indirect) owners. Thiswithholding tax would apply to payments of bareboat charter hireattributable to vessels trading to or from the United States.Given the far-reaching potential of FATCA to disrupt the verylifeblood of international shipping (e.g., the mere opening of a foreignbank account), foreign shipping companies should evaluate theimpact of FATCA upon their existing operations now and take suchpre-emptive steps as may be necessary to minimize its impact.Finally, private equity investors must plan at the outset for a taxefficientexit from the investment (whether by an IPO or otherwise).6SEWARD & KISSEL LLPwww.sewkis.com7SEWARD & KISSEL LLPwww.sewkis.com

Seward & Kissel Litigation Results - 20112011 Representative TransactionsOf the numerous cases in which Seward & Kissel lawyers were involved in 2011, two decisions stand out: the decision of the SupremeCourt of the Marshall Islands in Rosenquist v. George Economou, DryShips, Inc., et al., and the United States Federal Court decision inLitwin v. OceanFreight Inc.Represented Diamond S Shipping in connection with two credit facilities aggregating $1.07 billion and acted as maritime counsel inconnection with its acquisition of 30 vessel owning companies from CIDO Tanker Holding Co.Represented Box Ships Inc. in connection with a $105 million initial public offering of common stock underwritten by UBS Investment Bankand Morgan Stanley.DryShipsIn the DryShips case, a shareholder of the company brought a“derivative” claim in the High Court of the Marshall Islands in 2009. Aderivative claim is brought by a shareholder on behalf of a companyand seeks to recover damages against officers and directors of thecompany whom the shareholder alleges have not exercised theirobligations to the company properly. The shareholder alleged thata number of transactions were not given fair consideration by theindependent members of the board of directors and that insidersbenefited from those transactions. The complaint also alleged thatthe independent directors were not truly independent because thehigh level of compensation they received from the company madethem beholden to management. The case was argued in the HighCourt of the Marshall Islands in January 2010, where the Chief Judgeof the High Court dismissed the complaint and took the plaintiffs totask for failing to inspect the books and records of the company priorto bringing the action, but gave them an opportunity to do so aftermaking his decision. Rather than inspecting the books and recordsof the company, the plaintiff appealed the case to the SupremeCourt of the Marshall Islands. The Supreme Court heard argumentin April 2011 and on October 3, 2011, handed down a decisionaffirming the High Court and dismissing the complaint. The Courtheld, among other things, that the complaint lacked particularizedfacts establishing that the defendants’ decisions were made out ofloyalty to, or fear of reprisal from, management, and that the levelof compensation given to the independent directors, without more,was not enough to establish a lack of independence of the board.The Supreme Court also held that the board’s decisions to enter thechallenged transactions were entitled to the presumption that theywere done in good faith and in the exercise of business judgment, andthe dismissal of the complaint was affirmed.OceanFreightIn the OceanFreight case, Litwin, a holder of a small number ofOceanFreight shares, brought a motion to enjoin the merger ofOceanFreight Inc. and DryShips Inc., one week before the merger wasscheduled to be voted upon at a shareholders’ meeting. The plaintiffalleged that the information contained in the proxy statement relatingto the merger was insufficient for shareholders to cast an informedvote at the meeting. In order to succeed in obtaining an injunction,the plaintiff was required to show, among other things, a likelihoodof success on the merits. The judge held that there was no likelihoodof success on the plaintiff’s federal securities law claims because thecompany, as a foreign issuer, was exempt from many of the proxyrules plaintiff alleged that the company had violated, and that inany event, the plaintiff could not show that any representationsin the proxy statement had caused the shareholders injury.The Court also held that the “balance of the equities”favored the company, and that granting theinjunction would possibly do more harm thangood. The Court denied the injunction motion,the vote occurred and the merger wasconsummated on schedule.Represented Scorpio Tankers Inc. in connection with three credit facilities aggregating $392 million. Also represented Scorpio Tankers Inc.in connection with two follow-on public offerings aggregating $101.5 million underwritten by Morgan Stanley.Represented a syndicate led by Wells Fargo Bank, National Association and JP Morgan Chase Bank N.A. in respect of a $350 million creditfacility to Era Group Inc., a wholly-owned subsidiary of SEACOR Holdings Inc., secured by a pool of helicopters servicing the offshore oil fleet.Represented Ocean Rig UDW Inc. as U.S. counsel in connection with a $500 million offering of common stock pursuant to Rule 144A andRegulation S of the Exchange Act of 1934.Represented a private equity sponsored ship owner in connection with three credit facilities aggregating $201.8 million for the purchase of12 newbuild drybulk carriers.Represented DNB Bank ASA as agent in connection with a $180 million revolving credit facility provided by a syndicate of banks to meet theborrower’s working capital requirements and general corporate purposes.Represented Diana Containerships Inc. in a $132 million initial public offering of common stock underwritten by Wells Fargo Securities,BofA Merrill Lynch and Jefferies.Represented the defendants in Rosenquist v. George Economou, DryShips, Inc., et al. in a shareholder derivative action heard by theSupreme Court of the Marshall Islands.Represented OceanFreight Inc. in a merger with DryShips Inc. Also represented OceanFreight as defendant in Litwin v. OceanFreight,Inc., a case tried in United States Federal Court, where the plaintiff unsuccessfully sought to enjoin the merger of OceanFreight Inc. andDryShips, Inc.Represented underwriters UBS Investment Bank, BofA Merrill Lynch and Citi in a $71.7 million follow-on public offering of common stockby DHT Holdings Inc.Contact UsFor more information about Seward & Kissel’s Maritime Group or the contents of this Review, contact your relationship attorney.Gary Wolfe212.574.1223wolfe@sewkis.comRob Lustrin212.574.1420lustrin@sewkis.comTed Horton212.574.1265horton@sewkis.comSEWARD & KISSEL LLPLarry Rutkowski212.574.1206rutkowski@sewkis.comHadley Roe212.574.1224roe@sewkis.comMike Timpone212.574.1342timpone@sewkis.comDerick Betts212.574.1662betts@sewkis.comBruce Paulsen212.574.1533paulsen@sewkis.comJim Cofer212.574.1688cofer@sewkis.comThe decision provides solid guidelines to shipowners on thegovernance of Marshall Islands companies and demonstrates thestrength of the Marshall Islands legal system.One Battery Park PlazaNew York, NY 10004Tel: 212.574.1200 Fax: 212.480.8421www.sewkis.com1200 G Street, NWWashington, DC 20005Tel: 202.737.8833 Fax: 202.737.51848SEWARD & KISSEL LLPwww.sewkis.comSEWARD & KISSEL LLPThis publication contains attorney advertising. Prior results do not guarantee a similar outcome.www.sewkis.com