Another Isle of Man Victory for Creditors Committee in Navigator Bankruptcy.

NEW YORK -- In another significant victory for creditors of the Navigator companies, Deemster Kerruish of the High Court of Justice of the Isle of Man today ordered that Navigator Gas Transport plc and its subsidiaries be wound-up, and an independent liquidator be appointed to control their business.

In his ruling, Deemster Kerruish "rejected each and every complaint, argument and submission made by Navigator Gas (an indirect subsidiary of Vela Energy, the ultimate parent of the Navigator companies) in its opposition to the (winding-up) Petitions" brought by the Chair of the Official Committee of Unsecured Creditors, Lehman Brothers Inc. The Deemster found that, "on their own evidence," the Navigator companies are "distressingly insolvent." Flatly rejecting an unsworn document purportedly signed by Giovanni Mahler in support of Navigator Gas' opposition to the winding-up petitions, the Deemster held that, "Mr. Mahler's calculations, assumptions and assertions do not withstand analysis and, as to his assumptions, fly in the face of reality." Giving "no weight to the Mahler document," the Deemster emphasized that the petitions were a "perfectly proper, legitimate and beneficial use of the winding-up process, especially when it is what the majority of creditors desire."

In finding "no ground or merit" to Navigator Gas' opposition, the Deemster also held that the views of Navigator Gas - which, together with Mr. Mahler, already is subject to multi-million dollar contempt sanctions imposed by Judge Blackshear in the United States Bankruptcy Court of the Southern District of New York - "ought not to be regarded as those of an independent creditor." The Deemster specifically referenced the indisputable fact that Navigator Gas and each of the Chapter 11 debtor companies "all share common directors, who include Mr. Mahler...."

Deemster Kerruish refused to stay the winding-up order pending any proposed appeal by Navigator Gas. While business will continue as usual, implementation of the winding-up procedure is thus set to immediately begin.

The Committee is delighted by Deemster Kerruish's decision and looks forward to working with the liquidator to resolve the Navigator insolvencies in accordance with the wishes of bona fide creditors.