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CHICAGO, Ill. -- Gas City Ltd., a Frankfort, Ill.-based chain of independent gas stations, filed for Chapter 11 bankruptcy protection this week, according to a Crain's report.
The troubled company -- founded in 1966 by William McEnery and now including 51 gas stations located mainly in the south suburbs and also in Indiana, Arizona and Florida -- listed assets of between $50 million and $100 million, and estimated liabilities of between $100 million and $500 million in its bankruptcy filing, the report stated.
Gas City's plan is to sell its gas stations and the properties they sit on as quickly as possible, according to filings in the case. The stations are on track to generate revenue of $450 million this year and earnings before interest, depreciation, amortization and rent of about $18 million.
Appearing Wednesday before U.S. Bankruptcy Court Judge Eugene Wedoff, Gas City's attorney Mark Thomas said: "We have many parties that have expressed serious interest in these assets." He declined to identify potential buyers, Crain's reported.
McEnery's businesses have fallen behind on payments to the top banks in the city. The list of the 20 largest unsecured creditors was topped by nine banks and commercial lenders. The largest unsecured creditor was Merrillville, Ind.-based Centier Bank, with $19.5 million; followed by Aurora-based Old Second National Bank, with $19.2 million, the report stated.
Hickory Hills-based Standard Bank & Trust Co., on whose board McEnery sat until 2008 by virtue of a 3.5-percent equity stake, was listed as the third-largest unsecured creditor, with $14.1 million. Rounding out the top 10 were: Chicago-based MB Financial Bank ($10.5 million); Integra Bank N.A. in Bridgeview ($8.5 million); Elmhurst Suburban Bank & Trust ($8.5 million); GE Capital Corp. ($6.3 million); Rosemont-based Banco Popular North America ($6.2 million); Hammond, Ind.-based Citizens Financial Services ($3.7 million); and GE Commercial Finance ($3.6 million).
Another major creditor is the state of Illinois, which is owed $1.6 million in fuel taxes, according to the bankruptcy petition. Gas City has negotiated a monthly payment plan with the state to pay down that debt, according to late Tuesday's bankruptcy filing.
The bankruptcy could shape up to be a potentially contentious proceeding, as the sale of the gas stations isn't likely to generate nearly enough to satisfy all the lenders, the report noted.
Sources have indicated that McEnery's businesses owe about $365 million to 17 banks. The bankruptcy petition identifies about $285 million owed to the banks by Gas City and the trust controlled by McEnery, which owns most of the land the stations occupy.
The bank with the largest piece is Charlotte, N.C.-based Bank of America Corp., which has about $30 million outstanding to Gas City, according to the filing. Gas City also is proposing to take out a debtor-in-possession line of credit with Bank of America in order to procure surety bonds needed to keep its various state licenses, the report stated.
In addition to Thomas, Paul Possinger of Proskauer Rose LLP is representing Gas City. Daniel Zazove, partner with Perkins Coie LLP, is representing McEnery's trust.