Vedder Thinking | Articles Frank Nolan Describes a Maritime First in a Marine Money Magazine Article
Francis X. Nolan, III, a Vedder Price shareholder and member of the firm’s Global Transportation Finance team, recently authored the article “Safeguarding Lessor Rights in Marshall Islands Flag Vessels,” published in Marine Money magazine’s April/May 2013 edition. The article states that lease financing is a preferred form of equipment finance in most sectors of the transportation industry, except for ship finance. Recently, the Marine Financing Committee of the Maritime Law Association (MLA) took into consideration the difficulties facing ship leasing under the current law and drafted proposals for adoption by the U.S. and certain open registry flags to address the risks of recharacterization. On March 6, 2013, the Marshall Islands became the first flag state to adopt the MLA proposal and passed important legislation to diminish some of these lessor risks. Mr. Nolan, current chair of the Marine Finance Committee and a member of the MLA’s Board of Directors, was the measure’s principal draftsman. In this article, he explains the measure in further detail and concludes by saying, “As a practical matter, choice of New York or other U.S. law in the charter itself is a benefit to the owner as the concepts underlying recharacterization are for the most part products of American jurisprudence and in the bankruptcy scenario will most likely be played out in U.S. bankruptcy courts.”
To read the article in its entirety, please download the attachment below.
Reprinted with permission from Marine Money magazine, April/May 2013, pages 57–60.