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COLUMBUS, Ind. -- Kiel Bros. Oil Co. Inc. filed voluntary petitions for protection under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court in the Southern District of Indiana. During the Chapter 11 process, Kiel and its Tobacco Road convenience stores and wholesale fuel supply business will continue to operate normally.
Also, Gregory Pence resigned as president of the company and David Roll, formerly the company's chief financial officer, has been appointed president, effective immediately. Additionally, a previously announced definitive asset purchase agreement, whereby Bulk Petroleum Corp. was to acquire substantially all of Kiel's convenience store locations and its wholesale fuel supply business, has been terminated. The transaction could not be completed because Bulk Petroleum's financing was not in place.
Roll said the vast majority of Kiel's 210 stores and 90 wholesale-fuel dealer locations in three states will remain open for business as usual, and all of the company's more than 1,350 employees should report to work as normal. He said employees' paychecks and benefits are protected, and management does not envision layoffs.
Roll said Kiel elected to seek court protection to give it time to examine all ways in which to maximize value in the company. He added that the investment banking and asset-sale advisory firm of MarketplaceAdvisors has been retained to serve in a chief restructuring officer role and to assist the company in exploring all strategic alternatives, including a sale of substantially all of the company's assets.
As part of its Chapter 11 filing, Kiel has filed a motion seeking court approval to obtain a debtor-in-possession (DIP) credit facility of up to $23.8 million with National City Bank. Pending a further hearing, Kiel is seeking immediate authorization to use the DIP facility. The DIP financing will be used for employee salaries and benefits, ongoing operations, and other working capital needs.
"We believe our DIP financing will provide us with ample funds to cover the company's financial needs throughout the bankruptcy process," said Roll. "Effective today, Kiel begins new relationships with its vendors and other business partners. Our suppliers should continue to deliver as usual. They should rest assured they will be paid promptly on agreed-to terms for goods and services rendered from this point forward."