The New York bankruptcy judge overseeing Eletson Holdings' Chapter 11 case has raised sanctions against three Cypriot corporations connected to the shipping company's former owners to $5,000 a day for failing to reverse changes to the board of an Eletson affiliate.

In an order issued Wednesday, U.S. Bankruptcy Judge John P. Mastando III raised the sanctions against the three companies from the $1,000 a day they had previously been facing for failing to follow his orders to reverse the changes to Eletson Gas.

"The court now concludes that compliance has not been effectuated, and, to the extent necessary, that the proof of noncompliance is clear and convincing, and that the Cypriot nominees have not diligently attempted to comply in a reasonable manner," he said.

Eletson Gas had been a joint venture between Eletson and shipping rival Levona, and the companies fell into a dispute over ownership. An arbiter found in favor of Eletson, awarding the company $102 million and ordering that Levona's preferred shares in Eletson Gas be given to three Cyprus-incorporated entities affiliated with then-Eletson directors Vassilis Kertsikoff and Laskarina Karastamati.

Before Eletson could get a court order enforcing the award, Eletson's creditors pushed the company into an involuntary bankruptcy in March 2023. In October 2024, Judge Mastando confirmed a plan that transferred ownership of the business to creditor Pach Shemen LLC, a subsidiary of Levona's parent company, Murchinson Ltd.

Following confirmation, Eletson Gas continued to be the subject of international legal wrangling, with Eletson's former majority shareholders arguing the affiliate was not part of the bankruptcy estate and that they retained control. Judge Mastando has previously found the former shareholders, including Karastami, in contempt of his orders and has imposed increasing fines.

In the meantime, the parties continued to dispute the arbitration award in district court, with Levona seeking to overturn the award on the basis of a claim that Eletson fraudulently withheld documents from the arbiter.

Wednesday's order was in response to a joint sanctions motion by Eletson and Levona, arguing the three Cyprus entities had changed the registry of the preferred shares and named Kertsikoff and Karastamati Eletson Gas officers in February despite the fact the arbitration award had not been confirmed, and had failed to comply with an August order by Judge Mastando to rescind the changes or face $1,000 a day in contempt fines.

The entities argued they had complied with the August order by sending Eletson Gas a letter rescinding the changes and that was all they had the power to do, but in his Wednesday order Judge Mastando said they had changed the share registry and board composition themselves in February and there was no reason to believe they can't change them back.

"The court further agrees with movants that compliance with this court's August contempt opinion and order requires more than merely sending a letter requesting changes, which is all their purported compliance letter claims to do," he said.

Counsel for the parties did not immediately respond to requests for comment Thursday.

Eletson is represented by Kyle J. Ortiz, Brian F. Shaughnessy, Jennifer Sharrett and Andrew Citron of Herbert Smith Freehills Kramer LLP.

Levona is represented by Isaac Nesser of Quinn Emanuel Urquhart & Sullivan LLP.

The Cyprus entities are represented by Hal S. Shaftel, Maura E. Miller and Adam Kirschbaum of Greenberg Traurig LLP.

The bankruptcy case is In re: Eletson Holdings Inc. et al., case number 1:23-bk-10322, in the U.S. Bankruptcy Court for the Southern District of New York.