ABSTRACT
The importance of insolvency mechanisms for the operation of shipping companies can be better understood when the methods of the industry's access to the money market are taken into account. As is well known, shipping depends, much more than other industries, on bank financing, and particularly on bank loans, while recourse to other sources of funding is still limited. The dependence of shipping on bank loans is directly proportional to the capital intensity and cyclical nature of the industry. The vulnerability of shipping companies is much more apparent when analysed in combination with the risks entailed by the cyclical nature of the market. Shipping loans may be grouped into different categories depending on their purpose and the parties involved. There are different types of ownership-based collaterals, which may be classified according to how the creditor obtains the title, the number of parties involved, the purpose of the funding, the provisions of the relevant national statute, tax benefits and so on.
