Metro Fuel Oil hearing on case conversion pushed back by two months

By Kali Hays

New York, Dec. 2 – Metro Fuel Oil Corp.’s hearing on the possible conversion of its Chapter 11 bankruptcy case to Chapter 7 has been adjourned to Jan. 22 from Dec. 2, according to a Tuesday entry with the U.S. Bankruptcy Court for the Eastern District of New York.

As previously reported, the company’s creditor, Bayside Fuel Oil Depot Corp., and its U.S. trustee requested that its case be converted to Chapter 7 bankruptcy in March, with Bayside claiming the company’s inability to confirm a plan is due to administrative insolvency.

Bayside withdrew its motion after a settlement allowing $6.23 million of claims against Metro Fuel was approved in September.

The trustee maintains that Metro Fuel’s operating reports “demonstrate continuing losses” and “as the debtors have ceased operations and do not appear to be able to confirm a plan” conversion is necessary.

“There are substantial assets available in this case, including cash and valuable causes of action, and conversion provides an avenue for an independent trustee to liquidate and distribute assets and litigate or resolve causes of action for the benefit of creditors,” the trustee’s motion stated.

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.

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