Gas City filed for Chapter 11 bankruptcy protection on Tuesday, citing more than 1,000 creditors and estimated liabilities of more than $100 million, as reported in a Morgan Keegan/CSP Daily News Flash yesterday. Published reports say that debt totals $365 million.[image-nocss]
Gas City Ltd. is a Frankfort, Ill.-based, family-owned and -operated petroleum marketer and convenience-store chain with 52 locations (including nine Steel City truckstops) in northeast Illinois, northwest Indiana, Florida and Arizona, according to CSPedia records. The company was founded in Chicago in 1966 with one convenience store by current president William J. McEnery.
According to court documents, Gas City's 10 largest creditors all are lenders, most in the Southeast suburbs of Chicago and in Northwest Indiana. The amounts owed to each range from $3.7 million to $19.5 million. The company also owes $6.3 million to GE Capital Corp., Overland Park, Kan., and $3.6 million to GE Commercial Finance, Scottsdale, Ariz.
Other major debts include $2.2 million owed to Valero Marketing & Supply Co., St. Louis; $2.1 million owed to BP Products North America, Warrenville, Ill., $1.9 million owed to Husky Marketing & Supply Co., Lima, Ohio; and $1.6 million due in country motor fuel taxes to the Illinois Department of Revenue.
Signs that McEnery and Gas City were struggling became clear last spring when PrivateBank issued a foreclosure filing on a $17 million loan, according to a report in Crain's Chicago Business.
Over 44 years, his holdings grew to include 59 gas stations, two casinos, a trucking company, real-estate investments, ice-cream stores, golf courses and even a provider of "elegant mobile restrooms," the report said. But he was not prepared for the impact of the recession and the real-estate collapse that have him fighting for control of his businesses with Chicago bankers, who loaned him about $365 million in recent years.
It is not known if the bankruptcy filing will extend to McEnery's other properties. The fact McEnery chose to file Chapter 11 bankruptcy suggests he intends to reorganize the business, rather than sell it off completely.
The emergency court hearing yesterday was expected to, among other things, declare A. Jeffrey Zappone as chief restructuring officer for Gas City, authorize using cash collateral to keep the Gas City stores in operation, and authorize Gas City to "maintain and administer certain customer programs and honor certain prepetition obligations related" to those programs.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.