The axe finally fell on South Korea's once-mighty Hanjin Shipping on Friday as a Seoul court declared it bankrupt after struggling for years under the weight of billions of dollars-worth of debt. Hanjin filed for bankruptcy protection in August owing $5.37 billion as creditors refused to bail it out, with dozens of its vessels stranded outside around the world as they were refused entry to ports.
An accounting firm hired by the Seoul court concluded earlier this month that the firm's liquidation value would be greater than its worth as a going concern. The firm, which was once South Korea's biggest shipping firm and the seventh-largest in the world, has since been forced to sell most its assets at home and abroad to pay off debts, with most of its 1,500 workers laid off. "We will try to ensure that the bankruptcy process would enable the firm to pay off debts to all debt-holders in a fair and proper fashion," the court said in a statement. Trading in the firm's Seoul-listed shares was also halted Friday.
Hanjin's demise represent the biggest bankruptcy in container shipping and news of its impending doom last year caused chaos in the global industry. Most of its fleet of 141 ships were banned from docking in the US, China and many other countries because of its failure to pay ports for their services.
The family-run firm started going under after the shipping industry suffered its worst downturn in six decades caused by slumping global trade and slowdown in China. Mismanagement by top executives - including the late former owner's widow who took helm in 2007 despite having no experience in business - is also blamed for its collapse.
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