NICEVILLE, Fla. -- Gasoline distributor and retailer Price Oil Inc., Niceville, Fla., has closed all but one of its 13 stores in Alabama and Florida, and filed for Chapter 11 bankruptcy protection following what the company called an unprofitable 2005 in court documents.
[Price Oil] had net sales of over $130 million in fiscal year 2004, state court documents filed late last week. In April 2005, [Price Oil] expanded their operations to include the c-store business. The increased debt, without commensurate increase in net revenues, has constricted working [image-nocss] capital and reduced cash flow in the debtors' combined operations.
The owners of the company, E. Myers Armstrong and Freida P. Armstrong, also cite financial difficulties caused by the escalating price of gasoline following hurricanes Katrina and Wilma. The rise in fuel costs has lowered margins in the distribution business, court documents state. As a result, in addition to the losses in the c-store business, the debtors have suffered lower profits in their core distribution business.
Attempts to reach the owners for comment were unsuccessful. Price Oil operated its stores under the Lion's Pride and Roadmaster Food Store brands. It supplies gasoline to more than 100 c-stores in Alabama and Florida.
The owners filed for bankruptcy protection on Dec. 23, 2005 in Alabama, and are now working with financial consultants Cahaba Capital Advisors LLC to restructure their financial affairs and develop a comprehensive business plan to emerge from bankruptcy in the future.
Part of that plan will include how to pay back some or all of the approximately $22 million Price Oil owes to its primary lender, Colonial Bank. Court records show the company also owes more than $6.2 million to a variety of suppliers and creditors, including $1.3 million each to ExxonMobil, CITGO Petroleum and Marathon Oil.
The first step the Armstrongs are taking to continue business operations is a request to the court to sell off the nonessential inventory in the stores the company has closed. The one store the Armstrongs did not close is a $3.5 million travel center near Birmingham International Airport in Alabama. The store opened with great fanfare in March 2004 as the company trumpeted its many profit centers, including gasoline, convenience items, barbecue food offering, car wash and a laundromat.
Price Oil is scheduled to be in bankruptcy court again on Friday, January 13, to address a motion regarding its use of cash collateral as the case makes its way through the court system.
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.