Defendant Vessel Owner Bankruptcy and Your Jones Act Maritime Injury Case

A major pitfall in any personal injury case occurs when a defendant files for bankruptcy during the pendency of your lawsuit.  Meaning, the party who is responsible for your injuries decides to file for bankruptcy after you sue them, protecting their assets from you.  If you are what is called an “unsecured” creditor, you will most likely never be able to obtain a single cent of recovery against this Defendant even if you get a valid judgment in court.

 

An inexperienced lawyer will not know what to do if a Defendant files bankruptcy during your case.  They may recommend dismissing your case or finding a different party to sue.  They may even tell you that you have to hire an expensive additional attorney specializing in bankruptcy law to help you through this hurdle.

 

An experienced injury lawyer will not take this stance.  For example, in a recent maritime accident case, a partner with over 25 years of experience learned that a vessel owner Defendant in one of his cases was about to file for bankruptcy.  This filing would have basically ruined the offshore injury case for his client by making judgment obtained against this Defendant uncollectable.  Even if he won the case for his client, the client could not get the money because of the Defendant’s bankruptcy filing.

 

Upon learning of the Defendant’s bankruptcy plans, the partner investigated and found out that the vessel on which our client was injured would soon be arriving in the Port of Houston.  He began the process of arresting or seizing the vessel.  This procedure is a seldom-used process that only experienced maritime attorneys are familiar with.  If someone is owed money, including a claim for maintenance and cure, by the operator or owner of a vessel, he can file a maritime lien against the vessel.  The courts can seize and hold the vessel for payment of a debt or maritime lien enforcement.  The ship may be held until the debt is satisfied or it can be sold to pay the lien holders. No company wants its money-making vessel held, so they will quickly pay up and agree more often than not.  A real maritime lawyer will know that there is no need to reduce a seaman’s financial claims against his employer to a judgment.  A lien will work to seize a vessel.

 

Once the vessel owner Defendant learned of the partner’s plans to arrest his vessel, he immediately offered security in exchange for the release of the vessel.  This security will make any judgment enforceable and payable even if the owner is in bankruptcy.

 

Given the current economic climate, more and more companies are filing for bankruptcy.  However, a ship’s owner filing of Chapter 11 does not have an impact on your right to enforce a maritime lien and arrest the vessel. An admiralty court can and often will seize and sell a vessel, its earned freight and cargo to satisfy a debt.  Courts have found the bankruptcy code has no impact upon the right to enforce a maritime lien against a vessel even though the owner filed Chapter 11.

 

Is your claim worth risking on a younger, less experienced maritime lawyer?  Your personal injury recovery may be the only way you are able to support your family for years to come.  Do not risk your family’s well-being on a firm who hasn’t tried many maritime cases.  Settling for a firm with less experience means settling your case for less money.  You know that you can count on a firm which has handled thousands of maritime injury cases and recovered hundreds of millions of dollars for its clients to make the right decisions for you and to protect your claims from Defendants trying to file bankruptcy to avoid paying you what you deserve.