Hanjin Bankruptcy Case Study

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What are the factors or issues to cause Hanjin bankruptcy? The factors or issues to cause Hanjin bankruptcy included, Hanjin been unprofitable for four of the past five years. This may be the main issue to cause Hanjin bankruptcy due to financial cash flow problems. The global economic downturn in recent years severely will affect profits indirectly across the cargo shipping industry. It slows down the global trade and next, affects the cargo shipping industry. Fierce competition and falling prices had lead to a $5.4bn (£4.1bn) debt for Hanjin shipping company before its creditors refused to offer a new lifeline. Next, the company's ships out at sea because ports say they would not accept them without being sure that port-fees will…show more content…
They may try to draft in the four partner lines that have containers on the ship or maybe even the companies whose cargo is inside those containers. 225-metre Hanjin Scarlet which arrived at the Port of Prince Rupert on Tuesday night, and anchored in the harbour, has not been…show more content…
It is used when intention of the business is reorganize and continue on with business. Purpose of bankruptcy is to protect a company’s assets when their assets and liabilities are substantial. When a company facing bankruptcy, it can be reorganize by another ownership. Hanjin could be reorganize by another largest and good financing corporation so that Hanjin can be loaded and the currently problem will be solved. Hanjin company can get help from Seoul government. Government is available to collect public funds or raise money from other sources to help the stricken Hanjin company. This would be to help the company and company would not have a big debt burden in the longer-term. Besides that, Hanjin Shipping's parent company can try to raise the $90 million needed to sort this out. The economics of the industry is unlikely to change soon whatever funds are raised. Next, Hanjin would seek bankruptcy protection in more than 40 countries around the global to protect its fleet from being repossessed. A company can reorganize its debts and stop assets from being seized under bankruptcy protection. The revenue of the company will be increase if the shipping demands decrease. Once the company is able to manage the operation strategic well, the cost will be cut off and the company could be gain higher

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