SALE/LEASEBACK ARRANGEMENTS

3 Months Ended

Jun. 30, 2017

(15)	SALE/LEASEBACK ARRANGEMENTS

In connection with the restructuring contemplated by the Prepackaged Plan, the Debtors filed a motion seeking to reject all Sale Leaseback Agreements (the rejection damage claims related thereto, the “Sale Leaseback Claims”). Pursuant to an order by the Bankruptcy Court in May 2017, the Sale Leaseback Agreements for all 16 leased vessels were rejected. The company has included the disputed claims reserve of approximately $324 million in liabilities subject to compromise in connection with the rejection of these leases. Claims of sale leaseback parties related to the rejection of these contracts by the company remain unresolved as of the date of the company’s emergence from bankruptcy, and the company expects that a final determination of the claim amount will be settled by the Court at a later date. Refer to Note (3) for further details regarding amounts that the company has classified as liabilities subject to compromise.

Included in gain on asset dispositions, net for the quarter ended June 30, 2017, are $3 million of deferred gains from sale leaseback transactions which reflects gains recognized through the Petition Date of May 17, 2017. Approximately $105.9 million of previously deferred gains were credited to reorganization items as a result of the lease rejections.