Flying J declares Chapter 11

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From the company website:

FLYING J FILES TO REORGANIZE UNDER CHAPTER 11
All Operations Are Open and Conducting Business As Usual
Filing Will Allow Company to Address Near-Term Liquidity Pressures

Ogden, UT, December 22, 2008 – Flying J Inc. today announced that the Company 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 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 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.

J. Phillip Adams, Flying J President and Chief Executive Officer, said: “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. 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 good news is we have valuable assets, we do not expect layoffs will be necessary, and we are optimistic we will be able to generate substantial cash internally to allow us to meet our obligations going forward. “Our objective is to move through this process as quickly as possible and to work toward a solution that will address our short-term liquidity needs and allow us to meet our past obligations in full. In the meantime, our team is focused on continuing business as usual. We appreciate the support and understanding of our vendors and suppliers during this time,” Mr. Adams said.

The Company 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. Suppliers
will be paid under normal terms for goods and services provided after the filing date of December 22, 2008.
Flying J’s legal advisor is Kirkland & Ellis LLP and its financial advisor is The Blackstone Group L.P.

About Flying J Inc.
Based in Ogden, Utah, Flying J Inc. is among the 20 largest private companies in America, with 2007 sales exceeding $16 billion. This fully integrated oil company 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.
Media Inquiries Only:
Kekst and Company
Tom Davies, 212-521-4873
Wendi Kopsick, 212-521-4867
Peter Hill, 212-521-4859
# # #

[edgray]

From the company website:

FLYING J FILES TO REORGANIZE UNDER CHAPTER 11
All Operations Are Open and Conducting Business As Usual
Filing Will Allow Company to Address Near-Term Liquidity Pressures

Ogden, UT, December 22, 2008 – Flying J Inc. today announced that the Company 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 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 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.

J. Phillip Adams, Flying J President and Chief Executive Officer, said: “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. 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 good news is we have valuable assets, we do not expect layoffs will be necessary, and we are optimistic we will be able to generate substantial cash internally to allow us to meet our obligations going forward. “Our objective is to move through this process as quickly as possible and to work toward a solution that will address our short-term liquidity needs and allow us to meet our past obligations in full. In the meantime, our team is focused on continuing business as usual. We appreciate the support and understanding of our vendors and suppliers during this time,” Mr. Adams said.

The Company 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. Suppliers
will be paid under normal terms for goods and services provided after the filing date of December 22, 2008.
Flying J’s legal advisor is Kirkland & Ellis LLP and its financial advisor is The Blackstone Group L.P.

About Flying J Inc.
Based in Ogden, Utah, Flying J Inc. is among the 20 largest private companies in America, with 2007 sales exceeding $16 billion. This fully integrated oil company 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.
Media Inquiries Only:
Kekst and Company
Tom Davies, 212-521-4873
Wendi Kopsick, 212-521-4867
Peter Hill, 212-521-4859
# # #

[Dick & Pat]

That's sad to hear; hope they can work through this....their lending source probably bought some banks in China instead

[GaryKD]

It sounds like the J got caught on the wrong end of the oil price decline. They may have a large quantity of oil purchase obligations that they can not profit from (most likely take a loss on).

[tmar10]

I believe Gary is correct and the filing should allow them to negotiate or void futures contracts killing their cash flow. Slowed demand is another problem they have to deal with but without cash they are dead in the water. It appears they took appropriate action before they dug to big a hole.

[Ray,IN]

Sounds like a straight-up company trying to survive in a recession. Hope they do.

[rvgrandma]

Sure hope they make it through. They are one of our favorite places to stop for gas. Not always, but they are normally RV friendly for gas.

[DriVer]

OH Nooooo!

I hope that "The Hook" can make a comeback!

[Rocky 2]

When you look at their fuel website, notice how many locations are either short of or out of fuel to sell. This did not happen over night and can't be fixed immediately either.

[Route 66]

Not a good sign.

Flying J Gas

Flying J Diesel

[Ray,IN]

After reading the complete news story, It sounds like a stand-up company trying to survive this recession while keeping all employees working. I suspect they were trapped holding expensive oil futures when the bottom dropped out. Now, can't obtain credit to weather the storm.

[GaryKD]

The shortge of diesel seems to be only at the truck islands. Per Dirk's link, there is only one location having a RV diesel island supply problem. Maybe when the trucks start lining up at the RV island they can teach me how to get my coach/toad safely out, across and then leave the RV/auto area of the J.

[Explorer2]

We stopped at two different Flying J's the Dec 22 and 23rd along I-40 in NM and AZ both were out of unleaded gas.

Had wondered what was up (besides the bad weather)...now we know.

Enjoying AZ while we can!

[Phantomiz]

December 11 and 12 2008 stopped at every one along the I75 from North Ohio, Beverdams to Georgia, Lake Park. Business as usual. Didn't realize they were in trouble...

Again starting on Jan 1 2 and 3 2009. I did notice that in both trips, there were no line-ups. I was always the first to pump...

PhanTomiZ