1:25-cv-05904
S.D.N.Y.Aug 18, 2025Background
- Plaintiff Pennantia, LLC, a maritime company, owns 18 vessels and is majority-owned by Contrarian Capital Management; Rose Cay Maritime, LLC (a defendant) owns a minority interest.
- Pennantia bought the vessels in 2021 and engaged Rose Cay as manager under the "Shipman 2009" agreement. Rose Cay was authorized to manage technical, crew, and commercial operations, with express authority via a power of attorney.
- Foss Maritime initially acted as sub-manager but was replaced by Dove Cay, LLC (another defendant), without Pennantia’s written consent, when Foss ceased performing in 2022. Dove Cay and Rose Cay have overlapping principals.
- Pennantia and Dove Cay entered into a “credit receivables arrangement” totaling $5.5 million, as part of a broader $12 million loan infusion. Dove Cay later filed Notices of Claims of Maritime Liens against the vessels, totaling approximately $29.4 million, alleging Pennantia failed to pay management fees and loan amounts.
- Pennantia sought a preliminary injunction to stop Dove Cay from pursuing the maritime liens. The parties settled other aspects of Pennantia’s initial request out of court, so the motion on the liens was the only issue before the court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Preliminary injunction prerequisites (irreparable harm) | Pennantia asserted monetary harm would be irreparable due to defendants’ likely insolvency and potential harm to vessel sale values. | Defendants argued possible monetary damages are compensable, and insolvency wasn’t proven. | Denied: No showing of irreparable harm or defendants’ inability to pay judgment. |
| Validity of maritime liens under CIMLA | Dove Cay cannot assert liens; its role as sub-manager and connection to Rose Cay’s ownership bar liens; services weren’t “necessaries.” | Dove Cay provided “necessaries” as defined by CIMLA at the direction of an authorized party. | Dove Cay’s provided services were “necessaries” under CIMLA and liens were valid. |
| Application of Owner/Subcontractor Exceptions | Dove Cay was either an owner (by virtue of Rose Cay) or a subcontractor, both of which bar liens. | Rose Cay’s role and contractual relationships permitted Dove Cay to assert valid liens. | Exceptions don’t apply; Dove Cay is neither owner nor unenfranchised subcontractor. |
| Mandatory mediation/arbitration as condition precedent | CTMA (incorporating Foss LOA) required Dove Cay to mediate/arbitrate before asserting liens. | CTMA provisions on mediation/arbitration don’t run to Pennantia, and don’t bar liens here. | Condition precedent does not bar Dove Cay’s maritime liens in this context. |
Key Cases Cited
- St. Joseph's Hosp. Health Ctr. v. Am. Anesthesiology of Syracuse, P.C., 131 F.4th 102 (2d Cir. 2025) (preliminary injunctions require clear showing of irreparable harm)
- ING Bank N.V. v. M/V Temara, IMO No. 9333929, 892 F.3d 511 (2d Cir. 2018) (requirements for maritime liens under CIMLA)
- Brenntag Int’l Chemicals, Inc. v. Bank of India, 175 F.3d 245 (2d Cir. 1999) (preliminary injunctions in cases of likely insolvency)
- N. Am. Soccer League, LLC v. U.S. Soccer Fed’n, 883 F.3d 32 (2d Cir. 2018) (heightened standard for mandatory injunctive relief)
- Cianbro Corp. v. George H. Dean, Inc., 596 F.3d 10 (1st Cir. 2010) (subcontractors and right to assert maritime liens)