Selling Company to Repay Lender

Industry: Energy

Pettit Oil

Tacoma, Washington

Challenge

Convenience Stores, and Bulk Oil Distribution. $75 Million Revenue. $25 Million Secured Debt.


  • Company purchased an unprofitable company and was over leveraged
  • Heating oil division was very unprofitable and management had no plan to fix the business
  • Unprofitable supplier distribution contracts
  • Excess bulk operations and equipment
  • Inventory control issues
  • Filed for Chapter 11 without getting cooperation from its secured lender
  • Attempted to negotiate a sale without professional assistance or providing adequate due diligence materials

Solution

  • MorrisAnderson was retained by the secured lender to evaluate loan compliance and monitor bankruptcy process
  • Determined that a company led bankruptcy sale process was unlikely and advised the secured lender to prepare for a relief from stay to foreclose on all collateral
  • As predicted, sale efforts fell through and MorrisAnderson took over the business through a relief from stay
  • Immediately retained key employees, initiated an organized sale process and marketed assets for sale
  • Complete a system-wide inventory and accounting of all fuel inventory and negotiated sales of convenience store and card lock facilities
  • Negotiated supplier agreement settlement and resolution of claims

Results

  • Sold all divisions, assets and inventory over a four month process
  • Negotiated settlements and other claims to mitigate offset charges against the secured collateral
  • Assisted with mediation and other litigation against secured lender
  • Through the process MorrisAnderson achieved a 100% payback on the secured debt for the lender

Mark J. Welch

Mark J. Welch, CPA, CTP is a Principal at MorrisAnderson based in Pittsburgh. He has over 20 years in bankruptcy and restructuring experience especially in leadership roles and fiduciary positions with clients. Prior to joining MorrisAnderson, Mark was the Director of Internal Audit at Southern Air Transport, Inc., a mid-sized cargo air-transport airline. He also… Read More