Flying J to Reorganize Under Chapter 11
December 22, 2008
Flying J Inc. and some 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.
All of Flying J's operations, including approximately 250 travel plazas and fuel stops, are open and serving customers in the normal course. The company plans to continue normal business operations as it moves through the reorganization process.
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," explained J. Phillip Adams, Flying J president and CEO. "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 company does not expect layoffs will be necessary, and is optimistic it will be able to generate substantial cash internally to allow it to meet obligations going forward.