Assist Lender Maximum Recovery in a Chapter 11

Energy/Oil & GasLitigation Support

450M

Annual Sales

100M

in Debt

Kiel Brothers Oil Company, Columbus Indiana

Challenge

Retail convenience stores and wholesale gas distribution. $450 million sales. $100 million debt. 257 convenience stores (C-Stores) in IN, KY and IL. Operated under Marathon brand dealers in IN and BP dealers in KY and OH. The Company transported a combined 193 million gallons of petroleum products via own fleet to its 257 C-Stores. The Company employed 1,545 hourly and 274 salary employees.

  • The Company was operating at a cash flow loss and had no debt coverage.
  • Vendors where shutting off credit and Kiel was behind in tax payments.
  • Certain C-Stores where losing significant profit and leases were causing a further drain on cash.
  • The Company was forced to file Chapter 11 protection and was in dispute with Primary secured lender.
  • Bank was in dispute with hired Investment banker and was not comfortable with proposed plan and DIP facility.
  • Bank was moving towards a liquidation scenario based on disputed data from The Company.

Solution

  • MorrisAnderson was retained by Bank to facilitate data flow and analysis from the Company and Investment Banker.
  • Evaluated profitability by C-Store and recommend closing of losers.
  • Bridge and improve gap between the Company and Bank.
  • Prepare cost-benefit analysis and liquidation proposal contingencies.
  • Prepared to step in as manager in case of negative results from 363 sale.
  • Vali progress and facilitate operating reporting through Bank.

Results

  • Recommend jointly with the Company the closing of over 50 C-Stores and rejection of leases.
  • Recommend sales of idle equipment and land.
  • Facilitated negotiating of DIP facility and approval by UCC.

Contributors