Flying J, one of the largest retail distributors of diesel fuel in North America, has emerged from Chapter 11 bankruptcy protection with the aid of Grant Thornton, which served as the financial adviser to the official committee of unsecured creditors, and Pachulski Stang Ziehl & Jones, which served as counsel to the committee.
The company will repay in full the USD1.4bn owed its creditors, with the distributions on allowed claims of the company’s creditors expected to commence before the end of July.
Amidst a precipitous drop in oil prices and a challenging economic environment, Flying J initially filed for Chapter 11 protection on 22 December 2008. On 6 July 2010, the Bankruptcy Court confirmed the company’s amended plan of reorganisation, enabling the company’s emergence from Chapter 11.
During the pendency of the bankruptcy, Grant Thornton assisted the committee in ensuring that the company maintained adequate liquidity to support operations, execute a successful reorganisation and make a full payment to all creditors. To accomplish a full payment to all creditors, the company had to complete a number of transactions related to the sale of assets including, a refinery, pipelines, oil and gas wells and the retail refined products business.
"We are incredibly pleased with the outcome of this case. In particular, payment in full of all secured and unsecured creditors plus post-petition interest is a major accomplishment. 18 months of hard work by the debtors, the committee, and their respective professionals paid off as reflected in this outstanding result. We congratulate everyone who contributed to this effort and wish Flying J and Pilot Travel Centers every success in the future," says Rob Feinstein, New York-based managing partner at Pachulski Stang Ziehl & Jones.
“After a year and half of hard work, this is a great outcome for our clients and the unsecured creditors. The committee counsel and financial advisor have worked very hard to ensure this positive result, despite looming uncertainty just six month ago,” says Loretta Cross, Houston-based managing partner at Grant Thornton. “Participating in the restructuring of Flying J on behalf of the official committee of unsecured creditors was a challenging project with a positive conclusion. The unsecured creditors will recover 100 per cent of their allowed claims, plus interest, and the company is poised to focus on its refinery and financial services operations going forward for sustainable growth.”
