U.S. Government Sued Over Vessel Loan Guarantee Application

On July 17, 2012, the U.S. Department of Transportation and its agency the U.S. Maritime Administration were sued by American Petroleum Tankers Parent LLC in federal district court over the alleged failure of the government to issue a loan guarantee to APT. APT initially sought on August 31, 2010 a U.S. Government loan guarantee for $470 million to refinance debt incurred to construct five tank vessels at NASSCO in San Diego. Loan guarantees for certain vessels are authorized by Title XI of the Merchant Marine Act, 1936. APT alleges, among other things, that the two-year time limit for processing applications is about to expire and so it demands in part that the court order the U.S. Government to perform its “duty of approving or denying APT’s application.”