(LINK) Video of Q & A Session on Financing Charters with the Liberian Registry

“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:

• What is a finance charter, and how has this financing structure been used and grown in shipping in recent years?
• What led to the development and amendment to Liberia’s maritime law to allow lease financing structures to be recorded as a preferred mortgage?
• What are the legal elements to consider when recording a finance charter with the Liberian registry?
• What are the benefits of recording a finance charter with the Liberian registry? Benefits to the financier/lessor & Benefits to the shipowner/lessee.
• How are the Liberian laws and regulations for financing charters different from other laws typically found in the shipping sector?

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 hahmed@liscr.com or mortgage@liscr.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.”