Ocean Rig creditor may challenge company’s restructuring plan

|By:, SA News Editor

Ocean Rig UDW (NASDAQ:ORIG), which filed for Chapter 15 bankruptcy protection last week, now faces a fight with Highland Capital Management, a creditor and shareholder that has accused CEO George Economou of using the company as a piggy bank for his other enterprises, including distressed shipping company DryShips (NASDAQ:DRYS).

ORIG met with creditors today in New York with the bankruptcy judge, who will decide whether to recognize the company's Cayman Islands restructuring proceedings and block creditors from suing in the U.S. court system, but Highland wants permission to begin an involuntary bankruptcy petition against ORIG, WSJ reports.

Highland has named Economou and DRYS as defendants in a yet-to-be-filed lawsuit alleging that he shuffled cash between ORIG and DRYS, collected “exorbitant” management service fees and engineered a restructuring proposal that favors insiders over creditors.