Getty Petroleum Marketing bankrupt amid lease, environmental issues

By Caroline Salls

Pittsburgh, Dec. 5 - Getty Petroleum Marketing Inc. and its Gasway Inc., Getty Terminals Corp. and PT Petro Corp. subsidiaries filed Chapter 11 bankruptcy Monday in the U.S. Bankruptcy Court for the Southern District of New York to enable Getty to maintain and enhance its growth and execute its transformation plan to remediate environmental issues and provide competitive services and prices, according to a news release.

Specifically, the company said the Chapter 11 process will allow it to continue normal business operations while it restructures its finances, addresses and resolves claims and resolves disputes with Getty Realty Corp., Bionol Clearfield LLC, Lukoil Americas Corp. and Lukoil North America LLC, which have negatively impacted Getty.

According to a statement filed with the court, the company needs to prevent Getty Realty from terminating its lease and resolve a dispute related to the remediation of environmental contamination to be profitable.

Once these issues are resolved, the debtors said they believe they would be able to obtain the funding needed to improve the condition of the Getty gas stations, which would mean increased revenues from higher rent and substantially increased gasoline sales.

Getty said it plans to complete the restructuring process as quickly as possible.

"The process of reorganization is a significant and positive step toward restoring the luster of one of America's most iconic brands - Getty," chairman and chief executive officer Bjorn Q. Aaserod said in the release.

"This action will enable Getty to emerge operationally stronger with a better balance sheet, hasten environmental cleanup and pave the way for the company to provide its service station operators, vendors and valued customers with the best possible service and pricing.

"I am confident that our management team's expertise and vision will prove an invaluable asset as we execute our strategic growth plan in our core markets moving forward."

Getty Petroleum has secured sufficient capital to fund operations through its reorganization and remains in ongoing, productive dialogue with its stakeholders regarding terms of the restructuring, the release said.

Debt details

According to court documents, Getty Petroleum Marketing has $50 million to $100 million in both assets and debt.

The company's largest unsecured creditors include:

• Bionol Clearfield LLC of Clearfield, Pa., with a $230 million arbitration award claim;

• Lukoil North America LLC, based in New York, with a $42 million contract claim;

• Getty Properties Corp. of Jericho, N.Y., with a $13.91 million lease dispute claim; and

• Akin Gump Strauss Hauer & Feld LLP of Washington, D.C., with a $1.9 million professional fees claim.

Cambridge Petroleum Holding Inc. owns 100% of the company's shares.

The company's lead counsel is Greenberg Traurig, LLP.

Getty Petroleum is an East Meadow, N.Y., distributor of motor and heating fuels. The Chapter 11 case number is 11-15606.

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