Metro Fuel Oil approved to resolve claims through global settlement

By Kali Hays

New York, April 10 - Metro Fuel Oil Corp. obtained approval of a global settlement that resolves claims of bondholders, lenders and creditors and allows the company to avoid litigation, according to a Thursday order with the U.S. Bankruptcy Court for the Eastern District of New York.

Subsequent to the approval, Bayside Fuel Oil Depot Corp. filed an appeal of "each and every part" the order, according to a notice filed with the court.

As previously reported, specific parties to the settlement include Metro Fuel, its official committee of unsecured creditors, principals Paul J. Pullo Jr. and Gene V. Pullo, New York Commercial Bank, Valley National Bank, bondholders Rochester Fund Municipals and Limited Term New York Municipal Fund, which are advised by the OppenheimerFunds, Inc., indenture trustee U.S. Bank, NA, Trufund Financial Services, Inc., Hess Corp., Global Cos. LLC and Phillips 66 Co.

Under the settlement, the parties will receive a $17.5 million cash contribution from the Pullos. Of that amount, Metro Fuel will receive $2.7 million.

In addition, escrowed sale proceeds and cash on hand will be distributed to some of the settlement parties, including a distribution to the company's estates in the amount of $995,000, plus a $234,864 adjusted wind-down amount.

The settlement also includes a resolution of intercreditor claims over the allocation of liquid assets, including sale proceeds, in the amount of $16 million.

Metro Fuel said its estates are slated to receive a total distribution of $3.7 million on the settlement effective date, and the only estate claims not resolved by the agreement are claims filed against the Pullos in connection with a directors' and officers' liability insurance policy.

As previously reported, the company said it and the committee intend to wind down the Metro Fuel Chapter 11 cases by filing a motion to approve the structured dismissal or conversion of the cases, or a disclosure statement for a liquidating Chapter 11 plan within 60 days of the court's approval of the settlement.

The involuntary bankruptcy cases filed against the Pullos will be dismissed shortly after releases take effect under the settlement terms.

Metro Fuel is a Brooklyn, N.Y.-based energy company that supplies bioheat, biodiesel, heating oil, central air conditioning units, ultra low sulfur diesel fuel, natural gas and gasoline throughout the New York City metropolitan area and Long Island. The company filed for bankruptcy on Sept. 27, 2012 under Chapter 11 case number 12-46913.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.