§50305 Appointment of Trustee or Receiver and Operation of Vessels

Summary

A court can name the Secretary of Transportation to be the sole trustee or receiver for a U.S.-flag ship that sails between the United States and a foreign country when the U.S. government has a mortgage on the ship. The court must decide that this helps the estate and interested parties and supports the law’s goals, and the Secretary must agree. If someone else is named trustee without a hearing, their appointment only becomes effective when the Secretary approves it, though the Secretary can ask for a hearing. If a court will not let a trustee or receiver run the ship in foreign trade without government money, the court may let the Secretary run the ship (directly or through an agent) if the Secretary says continued operation is essential to U.S. foreign commerce and supports the law’s goals. The Secretary must follow court conditions to protect interested parties and must pay all operating losses. The Secretary cannot demand repayment from the corporation, its estate, or its assets for those losses, but may pay reasonable depreciation and other amounts the court allows. Paying those amounts and following the court’s terms settles any claim against the Secretary from running the ship. A ship run by the Secretary this way is treated as run by the United States under chapter 309.