For Freighter Crew, An Arrest Means Wages Resume

File image courtesy NewLead

By MarEx 2016-07-26 20:45:42

The crew of a bulker detained and scheduled for auction at Savannah, Georgia have not been able to leave the ship for months – but they say that they may be in a better position than they were before the vessel's arrest.

Creditor Ray Capital contends that the owner of the ship, the geared bulker Newlead Castellano, has stopped paying a corporate bond – but it has also allegedly stopped paying the Castellano's crew of 15. Now that the creditor has stepped in and secured the vessel's arrest, wages have resumed. "The crew is doing so much better since they got paid and were able to send money home," said the appointed monitor of the Castellano, Gerard LoPreiato, speaking to local media. He said that food and supplies were also being replenished. Thanks to shuttle services provided by a local marina, the Philippine crew has also had visits from a priest from a nearby parish.

Captain Reynaldo Alcuizar confirmed that conditions had improved. "In the first place we were sad, but here in America we are happy," he said – even if he and the rest of the crew cannot go ashore, since they lack the proper documents. 

The District Court for the Southern District of Georgia has scheduled the vessel's auction for August 8, noting that Ray Capital, "continues to incur great expense" to maintain the ship. The vessel's owner, Greek firm NewLead Holdings, has stated its intentions to contest the claim and keep the Castellano. 

In April, NewLead lost the handymax bulker Aurora Onyx to an arrest and sale just after acquiring it. The seller of the Onyx allegedly did not gain consent from lienholder HSBC for the ship's transfer; HSBC foreclosed and the ship was resold. The bank agreed to pay some of the proceeds to NewLead for expenses incurred. 

NewLead, which specializes in coal production, bulk shipping and bitumen shipping, posted an operating loss of $40 million last year. In its annual report, it noted that its "independent registered public accounting firm has  indicated . . . that there is substantial doubt about our ability to continue as a going concern." It is engaged in debt restructuring negotiations.