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RICHMOND, Va. -- Rennie Petroleum Co. has filed for reorganization under federal bankruptcy law. Started in 1985 with a single service station, Rennie's now has 24 convenience stores, compared with a peak of 40 in the mid-1990s.
According to a report by the Times-Dispatch, the company listed assets of $4.67 million and liabilities of $7.98 million. Liabilities include $3.76 million in unsecured, nongovernmental claims. The company listed its largest unsecured creditor as CITGO Petroleum Corp. of Tulsa, Okla., with a $3.3 million claim.
Owner Donald J. Rennie told the newspaper that he regretted having to file for bankruptcy protection. "We . . . are optimistic that we will succeed and emerge from Chapter 11 as soon as possible," he said, adding that the business will continue to operate as usual, and has no plans to close stores. Gross revenue last year exceeded $100 million.
In the bankruptcy filing, the company said its business changed for the worse in the early part of the decade when major oil companies began selling gasoline to their own stations cheaper than they sold it to wholesale purchasers such as Rennie. To stay competitive, Rennie said, it lost 15 cents a gallon on sales and laid off staff, subleased stores and cut expenses.
Beginning in 2003, Rennie said increased competition from rivals, such as Sheetz, Wawa and Sam's Club resulted in reduced sales and profit margins. Cash flow declined while rents continued to rise, the company said in the bankruptcy filing.
Gross profit from retail gasoline sales was down 60 percent last year from prior years, Rennie told the Times-Dispatch.
In the court filing, the company said it is locked into a uncompetitive fuel-supply contract. The contract also requires Rennie to pay credit card fees that the company says cost more than independent card services would charge.
The company also said it has been unable to secure financing to replace outdated and worn car-wash equipment and has lost 40 percent of its car-wash business, which provided a significant portion of the company's profit, the report said.
"The economics of the retail petroleum industry generally and this company specifically have changed in recent years," said David K. Spiro, attorney for Rennie Petroleum. "The goal … is to adjust to those changes, return to profitability and develop a plan, which will keep the company in business while generating the highest return to the company's creditors."
Rennie Petroleum has 24 retail locations, but only seven stores are operated by Rennie employees. Nine convenience stores are leased to tenants at locations where Rennie maintains control of the gasoline pumps and car washes, and in eight others, Rennie has leased the entire operation, but delivers fuel, the newspaper said.