On Dec. 22, 2008, driven by the recent precipitous decline in oil prices coupled with the disruption in the credit markets, Flying J and certain of its subsidiaries, including Longhorn Pipeline Holdings, filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court in Delaware. [image-nocss] As part of its efforts to maximize value for creditors, Flying J is pursuing the potential sale of Longhorn Pipeline.
All of Ogden, Utah-based Flying J's operations, including approximately 250 travel plazas and fuel stops, have remained open and have been serving customers in the normal course of business. The company has said that it plans to continue normal business operations as it moves through the reorganization process. The bankruptcy filing included Flying J's Big West refining and Longhorn Pipeline subsidiaries, which also have continued to operate. No other subsidiaries or affiliates, including the company's Canadian operations, were included in the filing or are subject to the reorganization proceedings.
(Click here for previous CSP Daily News coverage of Flying J's bankruptcy.)
The 700-mile Longhorn Pipeline transports gasoline and diesel refined products from the U.S. Gulf Coast's refining center in Houston to Crane and El Paso, Texas. It was placed in service in 2005, making it one of the most recent products pipelines to come into service in the United States. Longhorn Pipeline has recently operated at or near its current throughput capacity of 72,000 barrels per day. Further, its 18-inch-diameter pipe will permit a maximum design capacity in excess of 200,000 bpd.
Aegis Energy Advisors Corp. and The Blackstone Group have been selected to assist Longhorn Pipeline with the potential sale.
In late January, Flying J said that Crystal Call Maggelet, chairman, would add the duties of president and CEO, assuming operational leadership of the company. She succeedes J. Phillip Adams, who resigned as president and CEO.
At that time, the company also retained a chief restructuring officer, John Boken. A senior managing director from the firm of Zolfo Cooper, Boken will lead the company's overall restructuring process, serving as a liaison to our various creditor groups, working with Kirkland & Ellis on legal and Bankruptcy Court matters, and assisting The Blackstone Group on critical restructuring challenges. In addition, he will be working closely with Flying J management on addressing liquidity needs, resolving certain operating issues and in developing the business plans and financial forecasts necessary to chart the company's path out of Chapter 11. (Click here for previous coverage.)
Based in Ogden, Utah, Flying J Inc. is among the 20 largest private companies in America, with 2008 sales exceeding $18 billion. A fully integrated oil company, it employs more than 15,000 people in the United States and Canada through its interstate operations, transportation, refining and supply, exploration and production, as well as its financial services and communications, divisions.
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