§50305 — Title 46 Shipping | U.S. Code

Summary

A U.S. court can appoint the Secretary of Transportation to be the sole trustee or receiver for a company that runs a U.S.-flag ship between the United States and a foreign country when the United States holds a mortgage on the ship. The court must find that the appointment helps the estate and interested parties and furthers the goals of the law, and the Secretary must agree. If someone else is named trustee or receiver, that appointment only takes effect when the Secretary approves it, though the Secretary can ask for a hearing. If the court will not let a trustee or receiver operate the ship in foreign trade without federal money, the court may let the Secretary run the ship (directly or through a manager) if the Secretary says the ship’s continued operation is essential to U.S. foreign commerce and will further the law’s goals. The Secretary must follow court conditions to protect interests and must pay all operating losses. The Secretary cannot later sue the company or its assets for those losses, but may pay reasonable depreciation and other amounts the court allows. Payments and following court terms settle any claim against the Secretary from operating the ship. A ship run by the Secretary under these rules is treated as a U.S.-operated vessel under chapter 309.

Title 46, §50305

Shipping — Source: USLM XML via OLRC

(a)(1)In a proceeding in a court of the United States in which a trustee or receiver may be appointed for a corporation operating a vessel of United States registry between the United States and a foreign country, on which the United States Government holds a mortgage, the court may appoint the Secretary of Transportation as the sole trustee or receiver (subject to the direction of the court) if—

(A)the court finds that the appointment will—

(i)inure to the advantage of the estate and the parties in interest; and

(ii)tend to carry out the purposes of this subtitle; and

(B)the Secretary expressly consents to the appointment.

(2)The appointment of another person as trustee or receiver without a hearing becomes effective when ratified by the Secretary, but the Secretary may demand a hearing.

(b)(1)If the court is unwilling to allow the trustee or receiver to operate the vessel in foreign commerce without financial aid from the Government pending termination of the proceeding, and the Secretary certifies to the court that the continued operation of the vessel is essential to the foreign commerce of the United States and is reasonably calculated to carry out the purposes of this subtitle, the court may allow the Secretary to operate the vessel, either directly or through a managing agent or operator employed by the Secretary. The Secretary must agree to comply with terms imposed by the court sufficient to protect the parties in interest. The Secretary also must agree to pay all operating losses resulting from the operation. The operation shall be for the account of the trustee or receiver.

(2)The Secretary has no claim against the corporation, its estate, or its assets for operating losses paid by the Secretary, but the Secretary may pay amounts for depreciation the Secretary considers reasonable and other amounts the court considers just. The payment of operating losses and the other amounts and compliance with terms imposed by the court shall be in satisfaction of any claim against the Secretary resulting from the operation of the vessel.

(3)A vessel operated by the Secretary under this subsection is deemed to be a vessel operated by the United States under chapter 309 of this title.

Notes & Related Subsidiaries

Historical and Revision Notes

Revised SectionSource (U.S. Code)Source (Statutes at Large) 5030546 App.:1247.June 29, 1936, ch. 858, title IX, § 908, as added Pub. L. 95–598, title III, § 334, Nov. 6, 1978, 92 Stat. 2680; Pub. L. 97–31, § 12(134), Aug. 6, 1981, 95 Stat. 165. In subsection (a)(1), before subparagraph (A), the words “Notwithstanding any other provision of law” and “bankruptcy, equity, or admiralty” are omitted as unnecessary. In subsection (a)(2), the words “but the Secretary may demand a hearing” are substituted for “unless the Secretary shall deem a hearing necessary” for clarity. In subsection (b)(1), the words “subject to the orders of the court” and “comply with the terms imposed by the court” are omitted as unnecessary. In subsection (b)(2), the words “operating losses paid by the Secretary” are substituted for “the amount of such payments” for clarity. In subsection (b)(3), the words “vessel operated by the United States” are substituted for “vessel of the United States” for clarity and consistency with chapter 309.

§50305 Appointment of trustee or receiver and operation of vessels

Summary

Title 46, §50305

Notes & Related Subsidiaries

Historical and Revision Notes

Citations & Metadata