Oaktree Capital Defeats Appeal of Bankruptcy Court Ruling in Dispute With Taiwanese Shipping Magnate

Representing Oaktree Capital Management, L.P., Paul, Weiss defeated an appeal by a Taiwanese shipping magnate in the U.S. District Court for the Southern District of Texas challenging a bankruptcy court asset sale.

The appeal arose from bankruptcy proceedings initiated by businessman Hsin Chi Su (a.k.a. Nobu Su) on behalf of various Nobu Su-controlled corporations that owned and operated shipping vessels. In 2010, those corporations obtained loans, personally guaranteed by Nobu Su, to finance the purchase of the ships, which served as collateral. An Oaktree affiliate later acquired nearly all of the corporations’ debt under the loan facilities. In 2013, the corporations filed for bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas, which subsequently approved the ships’ sale and authorized Oaktree to “credit-bid” its debt in order to acquire them. Subsequently, Nobu Su appealed the bankruptcy court’s orders approving the sale.

The district court affirmed the bankruptcy court’s sale orders, rejecting Nobu Su’s arguments that the bankruptcy court had no jurisdiction to approve the sale. The district court also concluded that the appeal was moot because the sale process had been conducted properly and in good faith and because the ships had already been sold to a third party, and thus no relief could be granted.

The Paul, Weiss team included, among others, litigation partners Andrew Ehrlich and Gregory Laufer, and bankruptcy partner Elizabeth McColm.