The Thin Line Between Pirate and Repo Man, Arrrg Matey!
posted by Nate Oman
“Great things are done,” says Blake, “when men and mountains meet;/ This is not done by jostling in the street.” The results when repo men and the sea meet, it would seem, are also not the sort of things done by “jostling in the street.” Under Article 9, a creditor can repossess the collateral of a defaulting debtor so long the repo is done without a “breach of the peace.” What happens, however, when the collateral is a ship? In theory, the sea is governed by a web of international conventions supplemented by the customs and principles of admiralty law. In his fascinating book The Outlaw Sea: A World of Freedom, Chaos, and Crime, William Langewiesche reveals that the reality is considerably messier. The vastness of the oceans continues to provide a level of anonymity that is surprising in our information soaked age, and mobility allows ships to decamp to friendly or corrupt (or both) jurisdictions with ease. In many ways, it is still the wild, wild West. (Perhaps Pirates of the Carribean is a better metaphor.)
Enter F. Max Harberger, who — according to an L.A. Times story sent me by one of my students — is essentially in the business of stealing ships for creditors whose debts are due. The legality of what he does is far from clear, although in fairness he is frequently repoing ships that have been illegally seized by port officials in the developing world who are easily bribed. A $10 million ship can apparently be seized with a $100 bribe to a justice of the peace. Consider the following repo:
The saga began in 2003 when the vessel’s Greek owner died and his company did not keep up payments on a $3.3-million mortgage.
Bahamian court records show that an American businessman who had used the vessel to haul 235 used cars from the northeastern United States to Haiti did not pay the charter fee, contributing to the loan default.
Once the ship arrived in the Haitian port of Miragoane, the businessman bribed judicial officials to seize the vessel and sell it to him in a rigged auction, according to court records.
Meanwhile, a violent rebellion threatened to topple President Jean-Bertrand Aristide, making it impossible for the lender or the owner’s relatives to contest the sale.
The condition of the Aztec Express further complicated matters. Its main engines were out of commission, having been idle and untended for months.
Hardberger was hired by the New Jersey-based mortgage holder. He flew to Haiti and drove with an armed bodyguard to Miragoane.
He gathered two important pieces of information. Watchmen stationed on the Aztec Express sold fuel from the vessel on the black market. Second, port authorities had a cellphone, but they could use it only at the harbor’s soccer field, where cellular service was reliable.
Hardberger managed to get the guards off the ship by offering to buy fuel. When they came down to the dock to discuss the transaction, off-duty Haitian riot police hired by Hardberger held them at bay.
MEANWHILE, an oceangoing tugboat also hired by Hardberger slipped into port and backed up to the Aztec Express. Under a full moon, the crew began cutting the anchor chains with blowtorches.
In case harbor officials noticed and tried to call for help on their cellphone, Hardberger had paid a witch doctor $100 to cast spells on the port’s soccer field. The witch doctor marked the field with gray powder, a clear warning to believers in voodoo, the nation’s dominant religion. No call ever went out.
Once the freighter was freed, the tug hauled the ship out of port and headed for the Bahamas, where British-based maritime laws give a high priority to lenders’ claims.
Anarchy, it would seem, is alive and well and sailing the seven seas.
March 2, 2007 at 10:29 am
Posted in: Admiralty, Contract Law & Beyond
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Responses (4)
Miriam Cherry - March 3, 2007 at 2:20 am
Yet another great post; yes, I may be starting a fan club.
Arrrrh, matey!
Miriam Cherry - March 3, 2007 at 2:22 am
I just like saying Arrrh, matey. I did not even realize that it was already in the title.
A bit abashed,
Miriam (further entrenched as a member of the fan club…)
Seth R. - March 4, 2007 at 9:11 pm
I had a potential client call me up a bit spooked.
He said he had been working on getting caught up on his car payments when suddenly he starts getting demands from the repo guys. He says he’s a month behind because of a stint in the hospital last month and they start shouting at him and threatening repossession.
The next evening he’s out in his front yard when a couple of burly guys drive by glaring at him. They get out and start flashing him gang signs and saying “we’re gonna take that truck man.” “Your dog don’t scare me! I’ll F-ing blow its head off!” “You better watch your kids @#$%!”
An extreme example, but it is often like this in the repo business. They sort of count on most folks being too intimidated or too unsophisticated to sue. Usually, they’re right.
Mike Madison - March 8, 2007 at 5:03 pm
It’s not just the law of the sea (or the lack thereof) that complicates satisfying judgments and repossessing collateral; it’s also the law of the air. One of my former colleagues in practice liked to tell the story of chasing down an airplane (on the ground, fortunately) in order to seize it for a client. First, of course, he had to clear a fair amount of FAA red tape.
The post also gives me an excuse to excavate this gem of jurisprudential wisdom, which Seth R.’s thugs obviously have forgotten:
“I shall not cause harm to any vehicle nor the personal contents thereof, nor through inaction let that vehicle or the personal contents thereof come to harm. It’s what I call the repo code, kid. Don’t forget it — etch it in your brain. Not many people got a code to live by anymore.”
–from Repo Man (Anchor Bay Entertainment 1984)
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