According to a civil suit filed in the U.S. District Court, Southern District of Florida, Caterpillar Financial (CFSC) has sued Dean’s Shipping and its vessel, the M/V Legend II, alleging a loan default of more than $2 million. CFSC is seeking an action to foreclose on a preferred ship mortgage and is requesting a judgment against the ship’s owner and guarantor Ernest R. Dean.
As an intervening plaintiff, CFSC is alleging that it should be the preferred creditor over plaintiff Palm Beach Steamship Agency (PBSA), which alleges it is owed $126,000 for supplies and services provided to the vessel. In mid-February, PBSA filed a lawsuit “against the vessel” and Dean’s Shipping for failure to make payment. As a result, the vessel was “arrested” and currently lies within the Southern District of Florida.
Dean’s Shipping entered into a loan agreement with CFSC in the principal amount of $2.67 million on September 18, 2006. The loan is secured by mortgage on the M/V Legend II. The loan is guaranteed by the principal Earnest R. Dean. As of February 24, 2011, Dean’s Shipping owes $2.08 million, plus default interest, fees, costs and expenses.
CFSC is also arguing that the seizure of the vessel and transfer from Bahamian to Panamanian shipping registry was unauthorized and violated the loan agreement. CFSC is demanding that the ship be sold to satisfy the debt owing.
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