'Vessel Financing': Section 1110 Cast Adrift

But what about the application of Section 1110 to vessels? Section 1110(a)(3)(A)(ii) provides a special exemption from the automatic stay provisions of the Bankruptcy Code for a 'documented vessel (as defined in Section 30101(1) of Title 46) that is subject to a security interest granted by, leased to, or conditionally sold to a debtor that is a water carrier that, at the time such transaction is entered into, holds a certificate of public convenience and necessity or permit issued by the Department of Transportation.' This provision of Section 1110, applicable to vessels, sounds reasonably comparable to the provisions relating to aircraft and rail equipment. However, the seeming analog to aircraft is illusory, and no cases have made themselves readily apparent applying Section 1110 to vessels. This situation may well exist because no U.S. flag commercial vessel holds a 'certificate of public convenience and necessity or permit,' a prerequisite to the applicability of Section 1110(a)(3)(A)(ii).