On 29 April 2016 the Bankruptcy Court published its proposed findings of facts and conclusions of law. The bankruptcy court made five key findings in its Opinion. The Bankruptcy Court found in favor of TCC with respect to three of the rulings, namely that 1) the TCC Service Contracts are valid and enforceable; 2) the Defendants’ performance under the TCC Service Contracts were not excused by the alleged SIPG «force majeure»; and 3) TCC did not violate the implied covenant of good faith and fair dealing in filing suit against the Defendants. The Court also ruled that conflicting facts precluded the entry of summary judgment on defendants’ claims of fraudulent inducement and alleged problems with TCC’s service.
With respect to the fourth ruling the court found that TCC’s suspension of the last four sailings effectively relieved the Defendants of their remaining MQC obligations.
On 13 May 2016, the attorneys for TCC filed objections to the Bankruptcy Court’s proposed findings of facts and conclusions of law.
The matter will now be reviewed de novo by the judges of the District Court.
TCC’s objections were limited to the fourth ruling, which TCC believes to be both wrong as a matter of law and based on an incorrect understanding of the underlying facts.
For instance, the Bankruptcy Court found that the Defendants could all have tendered their remaining cargo on one of the last four sailings. This completely disregards the fact that the combined space available on those last sailings together was only about 10 % of the combined MQC shortfall and the service contracts expressly required the shippers to tender their MQC evenly as far as possible during the contract term.
In addition, the Bankruptcy Court states in its Opinion that TCC terminated all personnel just a few days after it filed for restructuring – a statement that simply is not true. TCC specifically kept all personnel for the reminding period of the service contracts and some personnel were kept more than six months until it became apparent that the Defendants would not honor their MQC obligations.
The attorneys for TCC A/S in Denmark expects the District Court’s review and final judgment to be rendered in Q3 2016.