Flying J Inc. on Monday, Dec. 22, announced that the company and certain of its subsidiaries have filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court in Delaware. The company says the filing will allow it to address near-term liquidity needs brought about by the precipitous decline in oil prices coupled with the disruption in the credit markets.
Flying J says all of its operations, including about 250 travel plazas and fuel stops, are open and serving customers in the normal course, and that it plans to continue normal business operations as it moves through the reorganization process. The company says the filing includes Flying J Inc. and its Big West refining and Longhorn Pipeline subsidiaries only; no other subsidiaries or affiliates, including the company’s Canadian operations, were included in the filing or are subject to the reorganization proceedings.
“Even though Flying J today is a successful and historically profitable company, it faced near-term liquidity pressure from an unprecedented combination of factors — the precipitous drop in the price of oil, and the lack of available financing from our traditional sources due to disrupted credit markets,” says J. Phillip Adams, president and chief executive officer of Ogden Utah-based Flying J. “With this sudden and unanticipated inability to meet our liquidity needs, we regret that we had no other choice than a Chapter 11 filing to enable us to stabilize our financial base. The good news is we have valuable assets, we do not expect layoffs will be necessary, and we are optimistic we will be able to generate substantial cash internally to allow us to meet our obligations going forward.”
Adams says the company’s objective is to move through the reorganization process as quickly as possible and to work toward a solution that will address its short-term liquidity needs and allow it to meet past obligations in full. “In the meantime, our team is focused on continuing business as usual,” he says. “We appreciate the support and understanding of our vendors and suppliers during this time.”
The company says it will be filing customary “First Day” motions to support its employees, customers and suppliers by providing for its associates to continue to be paid in the usual manner, and for their medical, dental, life insurance, disability and other benefits to continue without disruption. Suppliers will be paid under normal terms for goods and services provided after the filing date of Dec. 22, the company says.