APT complaint that DOT Secretary is interfering with Title XI Loan
American Petroleum Tankers (APT) filed a suit this week in federal court seeking immediate relief from interference by the DOT Secretary, who is charged with impeding with the Maritime Administration and is not being allowed to preform his duties regarding its application for a Title XI Loan Guarantee.
The complaint alleges that APT filed a loan request on August 31, 2010. While MARAD offically accepted the application in December 2010, the process and final decision has been interfered with by the DOT Secretary, who has unjustified put hurdles in the way. APTconstructed five 49,000 DWT U.S. Flag petroleum tankers at NASSCO in San Diego between 2006 and 2010. In fact, two of the tankers were built in accordance to U.S. Navy and the Military Sealift Command national defense designs.
The suit declares - contrary to congressional direction and in violation of express statuary provisions, the DOT Secretary formed a Credit Council to review Title XI loan applications. The MARAD Administration claimed he supports the loan, but the ‘Council’ has refused to act on APT’s application, based, not on its merits, but on the fact that APT is owned by investment funds, which are managed by private equity firms.
The suit points out that Title XI guaranteed loans can be 87.5% of the actual costs of a vessel cost and the terms can be as long as 25-years. APT’s application seeks loans for only 51.2% and a 20-year period. APT claims the Maritime Administrator has made reference to the “Solyndra Loan” at the Department of Energy. And that all federal loan applications are under more scrutiny.
The APT complaint said that its loan process must be completed by August 31, 2012, otherwise it could be denied due to an administrative expiration date set by law. APT also said that it amended the application in order to expedite the process and lowered the amount requested from $400 million to $340 million. The APT CEO also included a statement of a phone conversation that he had with Maritime Administrator and it was referenced that the final decision 'did not look good.'
The suit asserts that the DOT Credit Council has no lawful or valid function with respect to Title XI applications, and requested the court direct the Secretary of DOT to desist from interfering with MARAD's final decision.