UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): ~~April~~July 2910, 2009

U.S. Shipping Partners L.P. (Exact name of registrant as specified in its charter)


Delaware	001-32326	20-1447743
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)


399 Thornall St., 8^th Floor Edison, NJ	08837
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (732) 635-1500

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):


o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into Material Definitive Agreements.

~~The~~Revised ~~information~~Plan ~~set~~of ~~forth or incorporated in Item 1.03 is also incorporated by reference in this Item 1.01.~~Reorganization

~~Item~~Effective 1April 29, 2009, U.03S. Shipping Partners L.P. (“USSP” and, together with its subsidiaries and affiliates that filed voluntary petitions for reorganization relief under Chapter 11 of Title 11 of the United States Bankruptcy orCode ~~Receivership~~in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”), the “Company”) and certain of its subsidiaries and affiliates entered into a Plan Support Agreement (the “April PSA”) with the holders of (i) in excess of two-thirds of the amounts (including without limitation in respect of the termination obligations under the interest rate swaps) due under USSP’s Third Amended and Restated Credit Agreement, dated as of August 7, 2006, as amended, by and among USSP, certain subsidiaries of USSP, Canadian Imperial Bank of Commerce, as administrative agent, and the lenders and other agents party thereto (the lenders thereunder the “Senior Secured Lenders”) and (ii) approximately 70% of the amounts due in respect of USSP’s 13% Senior Secured Notes due 2014 (the “Second Lien Notes”). On July 10, 2009, USSP and a majority in interest of each of the Senior Secured Lenders and holders of Second Lien Notes who were party to the April PSA entered into a First Amendment to Plan Support Agreement (the April PSA as amended by the First Amendment the “Amended Plan Support Agreement”) pursuant to which USSP and the lenders party to the April PSA adjusted certain milestones related to the Company’s bankruptcy proceedings and amended the terms and conditions of the proposed plan of reorganization as set forth in the Plan Term Sheet attached as Exhibit A to the April PSA.

OnThe ~~April~~parties ~~29,~~to ~~2009 (~~the ~~“Commencement~~Amended Plan ~~Date”),~~Support ~~U.S.~~Agreement ~~Shipping~~have ~~Partners L.P.~~agreed ~~(“USSP”),~~to ~~all~~support a plan of ~~its~~reorganization for the ~~subsidiaries~~Company (the “~~Subsidiaries~~Plan”), USon ~~Shipping~~the ~~General~~terms and ~~Partner~~conditions ~~LLC,~~set ~~the~~forth ~~general partner~~in ofthe ~~USSP~~Plan ~~(“USSGP”),~~Term ~~and~~Sheet ~~USS~~attached ~~Vessel~~as ~~Management~~Exhibit ~~LLC,~~A ato ~~wholly-owned~~the ~~subsidiary~~Amended ofPlan ~~USSGP~~Support ~~(“Vessel~~Agreement. ~~Management” and,~~They ~~together~~have ~~with~~also ~~USSP,~~agreed ~~the~~not ~~Subsidiaries~~to ~~and~~support, ~~USSGP~~directly or indirectly, ~~the~~any ~~“Company”)~~other ~~filed~~plan, ~~voluntary~~in ~~petitions~~exchange for ~~reorganization~~ ~~relief~~the ~~under~~Company’s ~~Chapter~~agreement 11to implement ofall ~~Title~~steps 11necessary ofto solicit the ~~United~~requisite ~~States Bankruptcy~~acceptances ~~Code~~of (the ~~“Bankruptcy Code”)~~Plan inand ~~the~~obtain ~~United~~from ~~States~~the Bankruptcy Court ~~for~~an order confirming the ~~Southern~~Plan ~~District~~substantially in ofaccordance ~~New~~with ~~York (~~the ~~“Bankruptcy~~terms ~~Court”)(Case~~of ~~Nos.~~the ~~09-12711--09-12713;~~Amended ~~09-12718--09-12741)~~Plan Support Agreement. The ~~bankruptcy~~Amended Plan ~~filing~~Support ~~was~~Agreement ~~made~~may ~~with~~be aterminated ~~“pre-arranged”~~under ~~restructuring~~certain circumstances, including ~~plan~~in ~~with~~the event that the ~~support~~Plan ofand arelated ~~substantial~~disclosure ~~majority~~statement ofare ~~the~~not ~~Company’s~~approved ~~secured~~by ~~lenders~~certain ~~and~~deadlines, ~~noteholders.~~the ~~The~~Plan ~~Company~~is ~~will~~not ~~continue~~consummated towithin ~~manage~~a ~~their~~certain ~~properties~~period of time ~~and~~after ~~operate~~its ~~their~~filing ~~businesses~~with asthe ~~“debtors-in-possession”~~Bankruptcy ~~under~~Court, the ~~jurisdiction~~Company materially breaches the ofAmended Plan Support Agreement, the ~~Bankruptcy~~chapter ~~Court~~11 ~~and~~cases inare ~~accordance~~converted ~~with~~to ~~the~~cases under ~~applicable~~chapter ~~provisions~~7 of the Bankruptcy Code ~~and~~or the ~~orders~~Bankruptcy ofCourt grants relief that is inconsistent with the ~~Bankruptcy~~Amended ~~Court~~Plan Support Agreement or the Plan Term Sheet.

Effective April 29, 2009, the Company entered into a Plan Support Agreement with the holders of (i) in excess of two-thirds of the amounts (including without limitation in respect of the termination obligations under the interest rate swaps) due under the Company’s Third Amended and Restated Credit Agreement, dated as of August 7, 2006, as amended, by and among USSP, certain of the Subsidiaries, Canadian Imperial Bank of Commerce, as administrative agent, and the lenders and other agents party thereto (the “Credit Agreement” and the lenders thereunder the “Senior Secured Lenders”) and (ii) approximately 70% of the amounts due in respect of the Company’s 13% Senior Secured Notes due 2014 (the “Second Lien Notes”).

The parties to the Plan Support Agreement have agreed to support a plan of reorganization for the Company (the “Plan”) on the terms and conditions set forth in the Plan Term Sheet attached as Exhibit A to the Plan Support Agreement. They have also agreed not to support, directly or indirectly, any other plan, in exchange for the Company’s agreement to implement all steps necessary to solicit the requisite acceptances of the Plan and obtain from the Bankruptcy Court an order confirming the Plan substantially in accordance with the terms of the Plan Support Agreement. The Plan Support Agreement may be terminated under certain circumstances, including in the event that the Plan and related disclosure statement are not approved by certain deadlines, the Plan is not consummated within a certain period of time after its filing with the Bankruptcy Court, the Company materially breaches the Plan Support Agreement, the chapter 11 cases are converted to cases under chapter 7 of the Bankruptcy Code or the Bankruptcy Court grants relief that is inconsistent with the Plan Support Agreement or the Plan Term Sheet.

Under the proposed plan of reorganization contemplated by the Plan Term Sheet:

	•	The Senior Secured Lenders will receive (i) new term loan notes in an aggregate principal amount equal to approximately $332.6 million plus an amount equal to the termination obligation under the Company’s interest rate swaps and (ii) fifty percent (50%) of the common stock of reorganized USSP (“Reorganized USSP”), before giving effect to the common stock to be issued pursuant to a management equity plan described below, provided that Senior Secured Lenders that are not U.S. Citizens for U.S. Coastwise Trade Law purposes will receive a combination of common stock and warrants to purchase common stock. The new term loan notes will:
		•	bear interest at a rate equal to, at the Company’s option, (i) LIBOR plus 5%, subject to a 2% LIBOR floor or (ii) alternate base rate plus 4%;


	•	The Senior Secured Lenders will receive:

	(i) new senior secured term notes issued by reorganized USSP (“Reorganized USSP”) in an aggregate principal amount equal to $225 million and guaranteed by the other reorganized debtors. The senior secured term notes will:

2(A) be secured by a first priority lien on substantially all of the assets of the reorganized debtors; (B) require quarterly mandatory prepayment from excess cash flow (as defined in the Plan Term Sheet) once the reorganized debtors have achieved a $25 million cash balance in the first year following the Company’s emergence from bankruptcy and a $20 million (subject to adjustment under certain circumstances) cash balance thereafter; (C) amortize at the rate of 1% per year of the aggregate amount of the new senior secured term notes beginning in the first full year following the Company’s emergence from bankruptcy; (D) have a final maturity date of August 7, 2013;

	•	mature on August 7, 2013;
	•	amortize at the rate of 1% per year beginning in the first full year following the Company’s emergence from bankruptcy;
	•	be mandatorily prepaid to the extent of excess cash flow (as defined in the Plan Term Sheet) once the Company has achieved a $30 million cash balance in the first year following the Company’s emergence from bankruptcy and a $20 million (subject to adjustment under certain circumstances) cash balance thereafter;
	•	be secured by substantially all the Company’s assets; and
	•	be subject to certain customary covenants, including without limitation an interest coverage test (EBITDA/net interest) of at least 1.5x to 1 and a debt to EBITDA coverage ratio to be determined (but consistent with the interest coverage test and the projections provided by USSP to the Senior Secured Lenders).
•	The holders of the Second Lien Notes will receive fifty percent (50%) of the common stock of Reorganized USSP, before giving effect to the common stock to be issued pursuant to a management equity plan described below, provided that holders of the Second Lien Notes that are not U.S. Citizens for U.S. Coastwise Trade Law purposes will receive a combination of common stock and warrants to purchase common stock. The Second Lien Notes will be cancelled.
•	In no event will persons who are not U.S. Citizens for U.S. Coastwise Trade Law be issued common stock of Reorganized USSP representing in aggregate more than 23% of the common stock to be outstanding on the date the Company emerges from bankruptcy.
•	Reorganized USSP will adopt a management equity plan providing for the issuance to management of 10% of the outstanding common stock of Reorganized USSP. Five percent (5%) of such equity will be issued to management at the time the Company emerges from bankruptcy, with 25% vesting immediately and an additional 25% vesting on the first, second and third anniversaries of the Company’s emergence from bankruptcy. The remaining five percent (5%) available under the management equity plan will be issuable from time to time as determined by the board of directors of Reorganized USSP.
•	The warrants to be issued to the persons who are not U.S. Citizens for U.S. Coastwise Trade Law purposes will have an exercise price of $0.001 per share, will expire December 31, 2029 and may only be exercised by persons who are U.S. Citizens for U.S. Coastwise Trade Law purposes.
•	The existing and outstanding common units, subordinated units and general partnership interests of USSP will be cancelled without the payment of any amount to the holders thereof.
•	Customary releases will be provided to the Company, its current and former officers and directors, the Senior Secured Lenders, the holders of the Second Lien Notes, the various agents and trustees under the debt agreements and the respective officers, directors, employees, agents, advisors and professionals of each of the foregoing, subject to specified exceptions.

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		(E) bear interest at a rate of LIBOR plus 7.30%, subject to a 2% LIBOR floor; and

		(F) be subject to certain customary covenants, including without limitation an interest coverage test (EBITDA/net interest) of at least 1.5x to 1 and a debt to EBITDA coverage ratio to be determined (but consistent with the interest coverage test and the projections provided by USSP to the Senior Secured Lenders).

	(ii) new junior secured term notes issued by Reorganized USSP in an aggregate principal amount equal to $75 million and guaranteed by the other reorganized debtors. The junior secured term notes will:

		(A) be secured by a second priority lien on substantially all of the assets of the reorganized debtors;

		(B) require, after the senior secured term notes are repaid in full, quarterly mandatory prepayment from excess cash flow (as defined in the Plan Term Sheet) once the reorganized debtors have achieved a $25 million cash balance in the first year following the Company’s emergence from bankruptcy and a $20 million (subject to adjustment under certain circumstances) cash balance thereafter;

		(C) amortize, after the senior secured term notes are repaid in full, at the rate of 1% per year of the aggregate amount of the new junior secured term notes beginning in the first full year following the Company’s emergence from bankruptcy;

		(D) have a final maturity date of August 7, 2013;

		(E) bear interest at a rate of LIBOR plus 0.50%, subject to a 2% LIBOR floor; and

		(F) be subject to certain customary covenants, including without limitation an interest coverage test (EBITDA/net interest) of at least 1.5x to 1 and a debt to EBITDA coverage ratio to be determined (but consistent with the interest coverage test and the projections provided by USSP to the Senior Secured Lenders).

	(iii) all of Reorganized USSP’s Class A Common Stock, representing fifty percent (50%) of Reorganized USSP’s common stock on a fully diluted basis before giving effect to the Class B Common Stock to be issued pursuant to a management equity plan described below, provided that Senior Secured Lenders that are not U.S. Citizens for U.S. Coastwise Trade Law purposes will receive a combination of Class A Common Stock and warrants to purchase Class A Common Stock (“Class A Warrants”).


• The holders of the Second Lien Notes will receive shares of Class B Common Stock representing, on a fully diluted basis, fifty percent (50%) of the common stock of Reorganized USSP, before giving effect to the Class B Common Stock to be issued pursuant to a management equity plan described below, provided that holders of the Second Lien Notes that are not U.S. Citizens for U.S. Coastwise Trade Law purposes will receive a combination of Class B Common Stock and warrants to purchase Class B Common Stock. The Second Lien Notes will be cancelled.

• The Class A Common Stock and the Class B Common Stock will have the same ownership and voting rights, provided that dividends and other distributions declared in respect of Reorganized USSP’s common stock will first be distributed in respect of the Class A Common Stock in an amount equal to, in aggregate, approximately $54 million plus a four percent (4%) simple annual accruing dividend on the balance of the $54 million (the “Priority Distribution Amount”). The Class A Warrants will provide that in the event Reorganized USSP makes a distribution to holders of Class A Common Stock in respect of the Priority Distribution Amount, each holder of such Class A Warrant will receive a cash payment equal to the amount it would have received had it exercised its Class A Warrant immediately prior to such distribution being made and owned Class A Common Stock as the time such distribution was being made.

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• In no event will persons who are not U.S. Citizens for U.S. Coastwise Trade Law be issued common stock of Reorganized USSP representing in aggregate more than 23% of the common stock to be outstanding on the date the Company emerges from bankruptcy.

• Reorganized USSP will adopt a management equity plan providing for the issuance to management of 18.18% of the Class B Common Stock, representing on a fully-diluted basis 10% of the outstanding common stock of Reorganized USSP. Fifty percent (50%) of such equity to be available under the plan will be issued to management at the time the Company emerges from bankruptcy, with 25% vesting immediately and an additional 25% vesting on the first, second and third anniversaries of the Company’s emergence from bankruptcy. The remaining fifty percent (50%) available under the management equity plan will be issuable from time to time as determined by the board of directors of Reorganized USSP.

• The warrants to be issued to the persons who are not U.S. Citizens for U.S. Coastwise Trade Law purposes will have an exercise price of $0.001 per share, will expire December 31, 2029 and may only be exercised by persons who are U.S. Citizens for U.S. Coastwise Trade Law purposes.

• The existing and outstanding common units, subordinated units and general partnership interests of USSP will be cancelled without the payment of any amount to the holders thereof.

• Customary releases will be provided to the Company, its current and former officers and directors, the Senior Secured Lenders, the holders of the Second Lien Notes, the various agents and trustees under the debt agreements and the respective officers, directors, employees, agents, advisors and professionals of each of the foregoing, subject to specified exceptions.

The implementation of the Plan is dependent upon a number of factors, including final documentation, the approval of a disclosure statement and confirmation and consummation of the Plan in accordance with the provisions of the Bankruptcy Code.

3The descriptions of the Plan Support Agreement and Plan Term Sheet set forth above are qualified in their entirety by reference to the actual terms of the Plan Support Agreement and Plan Term Sheet, which are attached hereto as Exhibit 10.1 and incorporated herein by reference. In addition, the Company filed its Joint Plan of Reorganization and Disclosure Statement with the Bankruptcy Court on July 10, 2009. Copies can be obtained at the Bankruptcy Court’s website at http://www.nysb.uscourts.gov or through the Company’s website at http://www.usslp.com.

In ~~addition,~~ the ~~Company filed~~Joint ~~several~~Plan ~~“first~~of Reorganization ~~day”~~filed ~~motions~~ with the Bankruptcy Court, ~~including~~the aprincipal ~~motion for~~amount ~~interim~~of ~~authority~~new senior ~~to use its~~ secured ~~lenders’~~notes ~~cash collateral so as~~ to ~~provide~~ ~~the~~be ~~Company~~issued ~~with~~was ~~continued~~increased ~~access~~from to$225 ~~funds~~million to ~~operate its business and a~~$240 ~~motion~~million ~~establishing notification procedures~~ and ~~restrictions in connection with holding and trading in~~ the ~~Company’s~~interest ~~stock~~rate ~~and~~was ~~claims~~decreased ~~that~~from is7.3% ~~intended~~ to ~~preserve~~ 7.2%, toand the principal ~~greatest~~amount ~~extent possible, the potential value~~ of ~~certain of~~ the ~~Company’s~~new ~~tax~~junior ~~attributes~~secured ~~during~~notes ~~the~~to ~~pendency~~be ofissued ~~the~~was ~~Chapter~~decreased from 11$75 ~~cases~~million ~~and following~~to ~~emergence~~$60 ~~from bankruptcy~~million.

~~The~~- ~~descriptions~~4 of the Plan Support Agreement and Plan Term Sheet set forth above are qualified in their entirety by reference to the actual terms of the Plan Support Agreement and Plan Term Sheet, which are attached hereto as Exhibit 10.1 and incorporated herein by reference.-

~~Item~~Settlement ~~2.04.~~of ~~Triggering~~Litigation ~~Events~~Relating ~~That~~to ~~Accelerate~~the orPartnership’s ~~Increase a~~Joint ~~Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.~~ Venture

~~The~~On ~~filing~~July of10, ~~the~~2009, ~~voluntary~~USSP and ~~petitions~~its ~~for~~wholly-owned ~~reorganization~~subsidiaries ~~relief~~USS ~~under~~Product ~~the~~Carriers ~~Bankruptcy~~LLC ~~Code~~(“Product ~~described~~Carriers”), inUSS ~~Item 1.03~~Product ~~constitute~~Manager ~~events~~LLC (“Product ofManager”) ~~default~~and ~~that~~USS ~~automatically accelerated the Company’s~~PC ~~outstanding~~Holding ~~obligations~~Corp. ~~under~~(collectively the ~~Credit~~“USS ~~Agreement~~Entities”) entered ~~and~~into ~~the~~a ~~Second~~settlement ~~Lien~~agreement ~~Notes. There~~with isthe ~~approximately~~other ~~$332.6~~investors ~~million~~in, ~~outstanding~~and ~~under~~ the ~~Credit Agreement,~~ ~~excluding~~lenders ~~accrued~~to ~~interest~~(such ~~and~~investors ~~fees~~ and anlenders ~~outstanding~~collectively ~~letter~~the of“Blackstone/Cerberus ~~credit~~Entities”), ~~and~~USS ~~$100~~Products ~~million~~Investor ofLLC ~~Second~~(the ~~Lien~~“Joint ~~Notes outstanding~~Venture”), ~~excluding accrued and unpaid~~ ~~interest. As~~ a ~~result~~joint ofventure ~~the~~formed ~~filing~~by ofProduct ~~the~~Carriers ~~petitions,~~and ~~the~~certain ~~counterparty to each~~ of the Blackstone/Cerberus ~~Company’s~~Entities ~~interest~~to ~~rate~~construct, ~~swap~~charter ~~agreements~~and ~~may,~~operate ~~upon~~five ~~prior notice~~product tankers, ~~elect~~ to ~~terminate~~ ~~such~~settle ~~agreements~~litigation ~~early.~~relating ~~Any efforts~~ to ~~enforce~~control ~~such~~of ~~payment obligations against~~ the ~~Company~~operations ~~under~~of the Joint ~~Credit~~Venture. ~~Agreement,~~Under the ~~Second~~terms ~~Lien Notes~~of or the ~~interest~~settlement, ~~rate~~which ~~swap~~was ~~agreements~~approved ~~are~~by ~~stayed as a result of~~ the ~~commencement~~Bankruptcy ofCourt ~~the~~on ~~Chapter~~July 1117, ~~cases in the Bankruptcy Court.~~2009:

~~The~~(i) ~~information~~Product ~~set~~Carriers ~~forth~~will ~~or incorporated~~transfer its Class B member interest to the Class A Members and will no longer have an interest in, ~~Item~~or ~~1.03~~the isright ~~also~~to ~~incorporated~~act byas ~~reference~~managing member of, the Joint Venture; (ii) in ~~this~~consideration ~~Item~~of ~~2.04.~~the termination of Product Manager’s right to manage the operations of the Joint Venture:


		(a) the Blackstone/Cerberus Entities will pay Product Manager an aggregate of $14 million, of which $9 million will be paid upon the Effective Date of the Settlement Agreement, $2.3 million will be paid 40 days after the orderly transition of management of the vessels from Product Manager to a replacement manager appointed by the Blackstone/Cerberus Entities, and $2.7 million will be paid in equal monthly installments through December 2010;

		(b) the Joint Venture will pay to Product Manager 50% of the first $1 million of any cost savings received by the Joint Venture in respect of the three vessels still under construction if those vessels are delivered under the contracted cost; and

		(c) the Joint Venture will pay to Product Manager 50% of the first $500,000 of any cost savings received by the Joint Venture in respect of the last vessel still under construction if that vessel is delivered under the contracted cost, provided that this amount will only be paid to the extent the cost savings were not used to pay the amount due under clause (ii)(b) above;


		(iii) the USS Entities will have a right of first offer to purchase the Vessels to the extent the Joint Venture determines to offer all or any portion of them for sale in the future, although the Joint Venture has no obligation to accept any offer;

		(iv) the contracts between the USS Entities or their affiliates and the Joint Venture will be terminated;

		(v) the USS Entities and the Blackstone/Cerberus Entities will exchange broad, global releases; and

		(vi) On the Effective Date, all the litigation between the USS Entities and the Blackstone/Cerberus Entities will be dismissed with prejudice.

The description of the Settlement Agreement set forth above is qualified in their entirety by reference to the actual terms of the Settlement Agreement, which is attached hereto as Exhibit 10.2 and incorporated herein by reference.

SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS.

ITEM 9.01. Financial Statements and Exhibits.


	(d)	Exhibits.

~~Exhibit Number~~	Exhibit Number	~~Title~~	Title
~~10.1~~	10.1	~~Plan Support Agreement~~	First Amendment to the Plan Support Agreement, dated as of July 10, 2009
99.1		Press Release
	10.2		Settlement Agreement, dated as of July 10, 2009

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

U.S. SHIPPING PARTNERS L.P. By: US Shipping General Partner LLC, its general partner By: /s/ Ronald L. O’Kelley Name: Ronald L. O’Kelley Title: President and Chief Executive Officer (principal executive officer)


	U.S. SHIPPING PARTNERS L.P.

	By:	US Shipping General Partner LLC,
		its general partner

	By:	/s/ Ronald L. O’Kelley

		Name: Ronald L. O’Kelley
		Title: President and Chief Executive Officer (principal executive officer)

Date: July 17, 2009

~~Date:~~- ~~April 29,~~6 ~~2009~~-

Filing Compare · U.S. Shipping Partners L.P.