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Limitation of Liability Action dismissed for insufficient Letter of Undertaking


On January 9, 2023, Ingram Barge Company, LLC’s vessel the M/V CAROL MCMANUS and her 42-barge tow collided with Florida Marine’s vessel the M/V BID on the Lower Mississippi River. The collision reportedly injured a crewmember on the CAROL MCMANUS and a crewmember on the M/V BIG D.


Ingram filed a limitation of liability action in New Orleans federal court asking the court to limit its liability between $7-11 million.


When filing a limitation of liability action, Federal Admiralty Procedure Rule F(1) requires vessel owners to deposit the sum or approved security equal to the value of the vessel in question plus pending freight and interest.


In an effort to satisfy this rule, Ingram submitted a Letter of Undertaking (“LOU”) signed by its general counsel. The LOU stated:

  1. Ingram would “upon demand” file a bond or alternate Letter of Undertaking with the an approved corporate security; and

  2. Ingram has adequate self-insured retention to satisfy the potential claims.

The court rejected Ingram's LOU and dismissed the limitation action without prejudice. The court emphasized that it had previously written that a party initiating limitation action “must, at the very least, provide a Letter of Undertaking (“LOU”) or similar assurance from an independent surety before this Court will approve such a motion and initiate a limitation concursus.” The court dismissed the limitation action because Ingram did not comply with this requirement.


A publicly available copy of the decision can be accessed through the following link: https://www.govinfo.gov/content/pkg/USCOURTS-laed-2_23-cv-02426/pdf/USCOURTS-laed-2_23-cv-02426-0.pdf


Please feel free to reach out at (504) 553-1435 or ad@adamdavislawfirm.com if you have any questions or would like to discuss.


Thanks,


Adam Davis Law Firm


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