Court grants permission for State Bank and Trust to sell three vessels in loan default case

By Carrie Salls | Dec 20, 2018

NEW ORLEANS – The U.S. District Court for the Eastern District of Louisiana recently granted permission for State Bank and Trust Co.  to sell three vessels secured by allegedly defaulted mortgage notes.

The Dec. 4 court order by U.S. District Judge Jane Triche Milazzo said the bank loaned $8.06 million to C&G Liftboats LLC in 2014 through a first preferred ship mortgage note. The collateral put up for the notes was a first preferred mortgage on C&G's Lil Al vessel and “the pledge of collateral chattel mortgage packages” by A.M.C. Liftboats Inc. on its Mr. Alan and L/B Whitney vessels.

C&G and AMC are owned by co-defendants Polly and Adam Cheramie.

“Plaintiff (State Bankd and Trust) alleges that on Dec.15, 2015, C&G defaulted on the hand note, and plaintiff made demand on defendants C&G, AMC and the Cheramies,” the order said. “The failure of any defendant to satisfy their obligation to State Bank resulted in the filing of the (claims covered by the order.)”

Milazzo said in the ruling that the court previously confirmed that State Bank and Trust had a preferred ship mortgage in connection with the Lil Al. In addition, Milazzo said, “the court also held that the mortgages on the M/V Mr. Alan and the M/V L/B Whitney satisfied the requirements of the Ship Mortgage Act, but that the notes securing the mortgages on the M/V Mr. Alan and the M/V L/B Whitney were facially prescribed at the time they were pledged to secure the hand note, unless prescription was interrupted.”

In addition to seeking approval to sell the vessels and submit a credit bid for the vessels against the amounts owed by the defendants, the court said the parties sought rulings related to the Mr. Alan and L/B Whitney prescription dispute.

In the order, Milazzo ruled that the bank “is entitled to judgment recognizing its preferred ship mortgages on the M/V Mr. Alan and the M/V L/B Whitney as valid,” and that the defendants owe $7.74 million to the bank under the July 2014 promissory note, plus interest, late charges and attorneys’ fees.

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