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Flying J files to reorganize under Chapter 11

OGDEN, Utah — Flying J Inc. and certain of its subsidiaries have filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court in Delaware, the company said Monday. The filing will allow the company 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 said it 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, according to a Flying J statement.

“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,” said J. Phillip Adams, Flying J president and CEO.  â€œWith 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 expects to move quickly to work through reorganization process and to meet its past obligations “in full” Adams explained.

“In the meantime, our team is focused on continuing business as usual,” Adams said. “We appreciate the support and understanding of our vendors and suppliers during this time.”

Flying J will be filing customary “First Day” motions to support its employees, customers and suppliers by providing for the company’s associates to continue to be paid in the usual manner, and for their medical, dental, life insurance, disability and other benefits to continue without disruption, the company said. Suppliers will be paid under normal terms for goods and services provided after the filing date of December 22.

Based in Ogden, Utah, Flying J Inc. is among the 20 largest private companies in America, with 2007 sales exceeding $16 billion. It employs over 16,000 people in the U.S. and Canada through its interstate operations, transportation, refining and supply, exploration and production, as well as its financial services and communications, divisions.

Kevin Jones of The Trucker staff can be reached for comment at [email protected].