Capital Product
Partners L.P. (the "Partnership") CPLP announced today
agreements to transfer its claims against Overseas Shipholding Group
Inc. OSG and certain of OSG's subsidiaries regarding the long
term bareboat charters of three of the Partnership's product tanker
vessels.
As previously reported by the Partnership, on November 14, 2012, OSG
and certain of its subsidiaries made a voluntary filing for relief
under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy
Court for the District of Delaware (the "Bankruptcy Court"). The
Partnership had three IMO II/III Chemical/Product tankers (M/T
Alexandros II, M/T Aristotelis II and M/T Aris II, all built in 2008 by STX Offshore & Shipbuilding Co. Ltd.) with long term bareboat
charters to subsidiaries of OSG.
After discussions with OSG, the Partnership agreed to enter into new
charters with OSG on substantially the same terms as the prior
charters, but at a bareboat rate of $6,250 per day. The new charters
were approved by the Bankruptcy Court on March 21, 2013, and were
effective as of March 1, 2013. On the same date, the Bankruptcy Court
also rejected the previous charters as of March 1, 2013. Rejection of
each charter constitutes a material breach of such charter. On May
24, 2013, the Partnership filed claims (the "Claims") against each of
the charterers and their respective guarantors for damages resulting
from the rejection of each of the previous charters, including, among
other things, the difference between the reduced amount of the new
charters and the amount due under each of the rejected charters.
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