US refinery firm files for Chapter 11

23/12/2008

Flying J, a privately held refiner, producer and pipeline controller, has filed for Chapter 11 bankruptcy protection in the US, it has emerged.

The company's president and chief executive Philip J Adams said that it had run into insurmountable liquidity problems in recent months and needed to file for protection while it undertakes a substantial restructuring programme.

Flying J is involved in the distillation of a host of crude derivatives such as heating oil, DERV and petrol for sale in US markets.

According to Reuters, its main creditors are Zion Bancorp, ConocoPhillips and Barry Petroleum, although Bloomberg also reports that the company ran into trouble after Bank of American NA seized a "substantial sum of cash" from an arm of the business due to a violation of a loan agreement.

The company does not expect that redundancies will be made as a result of the restructuring process, while DERV and petrol supplies are expected to continue.