Item 8.01. Other Events
As previously reported, in 2015, Eagle Bulk Shipping Inc. (the "Company") filed
a voluntary self-disclosure report with the U.S. Treasury Department's Office of
Foreign Assets Control ("OFAC") regarding certain apparent violations of U.S.
sanctions regulations in the provision of shipping services for third party
charterers with respect to the transportation of cargo to or from Myanmar
(formerly Burma) (the "Apparent Violations"). The Company had a different senior
management team at the time of the Apparent Violations, which occurred between
2011 and 2014. The Company's new senior management and new Board of Directors
self-reported the Apparent Violation, cooperated fully with OFAC's investigation
and has since implemented robust remedial measures and significantly enhanced
its compliance safeguards.
On January 23, 2020, Eagle Shipping International (USA) LLC ("Eagle Shipping"),
a subsidiary of the Company, entered into a settlement agreement (the
"Settlement Agreement") with OFAC in which Eagle Shipping agreed to make a
one-time payment to the U.S. Department of the Treasury in the amount of $1.125
million and undertake certain compliance commitments in exchange for OFAC
agreeing to release and forever discharge the Company and its subsidiaries,
including Eagle Shipping, without any finding of fault, from any and all civil
liability in connection with the Apparent Violations. The settlement does not
constitute any admission of fault or wrongdoing by the Company or any of its
subsidiaries.
The Company does not believe that this payment will have a material impact on
the Company's consolidated financial statements.
On January 27, 2020, OFAC made available on its website a summary of the
Settlement Agreement and the Settlement Agreement itself.
The description of the Settlement Agreement is qualified in its entirety by
reference to the text of the Settlement Agreement, which is included as Exhibit
99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Forward-Looking Statements
Matters discussed in this Current Report on Form 8-K may constitute
forward-looking statements. Forward-looking statements reflect management's
current expectations and observations with respect to future events and
financial performance. Where the Company expresses an expectation or belief as
to future events or results, such expectation or belief is expressed in good
faith and believed to have a reasonable basis. However, the Company's
forward-looking statements are subject to risks, uncertainties, and other
factors, which could cause actual results to differ materially from future
results expressed, projected, or implied by those forward-looking statements.
The Company's actual results may differ materially from those anticipated in
these forward-looking statements as a result of certain factors, including
changes in the Company's financial resources and operational capabilities and as
a result of certain other factors listed from time to time in the Company's
filings with the U.S. Securities and Exchange Commission. The Company disclaims
any intent or obligation to update publicly any forward-looking statements,
whether as a result of new information, future events or otherwise, except as
may be required under applicable securities laws.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit Number Description
99.1 Settlement Agreement, dated January 23, 2020, by and between
the U.S. Department of Treasury's Office of Foreign Assets
Control and Eagle Shipping International (USA) LLC.
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