“F. Humera Ahmed, Vice President of Legal & Business Development of the Liberian Registry joins Frank Nolan and Ji Kim, Shareholders at the law firm of Vedder Price for a Q & A session on financing charters and the benefits of recording a financing charter as a preferred mortgage with the Liberian Registry.
In the Q & A they cover topics that include:
If you have any questions on financing charters and the benefits of recording a financing charter as a preferred mortgage with the Liberian Registry, please reach out to firstname.lastname@example.org or email@example.com.
Benefits to the financier / lessor: In the event a bankruptcy court (such as, a debtor-friendly bankruptcy court in the United States) recharacterizes a bareboat charter financing as a disguised loan (and not a true lease), recording such bareboat charter (i.e., a financing charter) as a preferred mortgage with the Liberian Registry would allow the financier / lessor to become a “secured creditor” (instead of an “unsecured creditor”) in relation to its claims against the vessel under the financing charter (since the recording of a financing charter perfects the lessor’s lien in the vessel under the charter).
Benefits to the shipowner/ lessee: By the shipowner allowing the financier / lessor to have a secured lien against the vessel under a financing charter (as a result of recording such financing charter as a preferred mortgage with the Liberian Registry), the shipowner will be (i) better able to access capital (that it otherwise would not have access to), and (ii) in a better position to negotiate more favorable terms with its financier.”