Low Gas Prices Good? Flying J Says “No!” and Files Bankruptcy
Next to Walmart, perhaps the second most frequented fulltimer haunt is the truck stop chain run by the Utah-based Flying J Corporation. This morning the big oil refiner said that low oil prices were turning oil fields into killing fields and filed for protection under Chapter 11 bankruptcy laws.
According to a story in the Wall Street Journal, the low price of oil is creating more than just the usual “hot case indigestion” for the outfit. Reports the big financial paper, “In court papers, Flying J. Chief Executive J. Phillip Adams blamed the company’s financial troubles on ‘the recent precipitous drop’ in oil and gas prices.
“‘The numbers best tell the story: as of December 19, 2008, oil prices have fallen by almost 60% against the precious [sic] year and over 75% from record level of $147 per barrel reached in July 2008,’ Mr. Adams said.
“The collapse in oil prices caused the company’s refining arm on Friday to default on a $200 million loan provided by a group of lenders led by Bank of America Corp., according to Mr. Adams. A day later, the company’s distribution arm defaulted on a $120 million loan provided by a group of lenders led by Merrill Lynch Capital Corp.”
Will this mean the end of free dump stations, discounted fuel and propane, and racks of sandwiches? Not at this point. Flying J says it will keep the doors open, the pumps pumping, and the “Shower Number 301 Now Ready,” while it works to dig its way out of the current mess.
photo: dwstucke on flicker.com
