New York Court upholds DHT’s right to purchase VLCCs

Apr 21 2017

Last Wednesday, the the Supreme Court of the State of New York rejected a Frontline attempt to block DHT’s purchase of BW Group’s VLCC fleet.

The court issued an order denying Frontline’s motion for a preliminary injunction and temporary restraining order, which was filed the day before.

The reasons cited by the Court included -

(1) The “inexcusable timing” of Frontline’s filing.
(2) Frontline’s failure to establish that the Court has jurisdiction over either DHT, the company directors or BW.
(3) Frontline’s failure to establish a probability of success on its claim that the transaction violated applicable Delaware law at this stage of the case.

Frontline Ltd had filed a complaint against DHT Holdings, BW Group and each member of DHT’s board on 18th April, following its failed bid to takeover DHT.

The case was captioned Frontline Ltd v DHT Holdings, BW Group, Robert N Cowen, Erik A Lind, Joseph H Pyne, and Einar Michael Steimler.

Among other things, Frontline alleged that the company directors had breached their fiduciary duties in connection with the entry by the company into the previously announced vessel acquisition agreement (VAA), dated 23rd March, 2017, between DHT and BW, by which the company agreed to acquire nine (VLCCs) and newbuild contracts for another two VLCCs from BW.

The complaint sought to enjoin the consummation of the transactions contemplated by the VAA, including the delivery of the VLCCs to DHT in exchange for the consideration specified in the VAA.

DHT believed these allegations were without merit, the company said in a stock exchange filing.
Meanwhile, DHT has also revealed that it took delivery of the first of the BW Group VLCCs - ‘DHT Utik’ - on 20th April.
All nine vessels in the water are expected to be delivered during the second quarter of 2017, the company said.

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