Overseas Shipholding seeks bankruptcy protection

Last Updated: Wed, Nov 14, 2012 15:45 hrs

Short on cash, the Overseas Shipholding Group is filed for Chapter 11 bankruptcy protection Wednesday.

The tanker operator said last month that financial statements going back to 2008 cannot be relied upon after it uncovered tax issues. It said at the time that bankruptcy protection was one of the options it was considering.

In an October filing with the Securities and Exchange Commission, the company said that it was reviewing those tax issues related to international operations

Board member and audit committee member G. Allen Andreas resigned in late September, citing a disagreement over that review.

"We will use the Chapter 11 process to definitively resolve our financial issues. An orderly restructuring in Chapter 11 will provide stability both to Overseas Shipholding and to the entire shipping industry," CEO Morten Arntzen said.

The New York company filed for bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware.

Some subsidiaries of Overseas Shipholding Group Inc., including those that manage its facilities in Manila, Singapore, Greece, London and Newcastle, have not filed for Ch. 11 reorganization.

The company insists that it has more than enough cash to continue operating and anticipates generating significant free cash flow while in bankruptcy protection.

It plans to exit from bankruptcy protection as soon as possible.

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