Conway MacKenzie was engaged by an independent petroleum marketer and operator of retail gas stations. Its operations included 50 retail gas stations, including ten large truck stops located near interstate highway systems. The company employed approximately 900 employees and reported revenue and gross profit of over $325 million and $64 million, respectively, and $393 million and nearly $70 million, respectively, the following year. As a result of an overall downturn in the economy, fuel sales volumes declined from approximately 130 million gallons to less than 120 million gallons over a two year period. Although gas volumes improved since the initial decline, the company had insufficient cash flow to service payments on its mortgage loans and operating line of credit. Additionally, the company was burdened by debt payments due on ancillary and non-related land parcels and businesses. As a result, the company filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code and sold assets of the business under section 363 of the Bankruptcy Code.
Conway MacKenzie was engaged by the company to provide financial consulting and management services to assist in its day to day operations, restructuring and bankruptcy proceedings, as well as to assume the role of Chief Restructuring Officer. Additionally, Conway MacKenzie managed the section 363 sale process. Conway MacKenzie engagement services included:
- Monitoring and managing the company’s short-term liquidity, including daily cash flow forecasting and reporting, cash disbursement activity, budgeting and financial planning.
- Preparing long-term financial projections for each station and on a consolidated basis utilizing expected gallons and margin assumptions.
- Monitoring the company’s performance and compliance with lender and court reporting and variance requirements.
- Preparing and negotiating a restructuring plan with the company’s lenders that is in the best interests of the company’s creditors.
- Advising and assisting the company in the development of and communications with the company’s shareholders, professionals, advisors, employees and other stakeholders or parties in interest to the operations and restructuring efforts.
- Assisting in negotiations with lenders, suppliers, employees and taxing authorities.
- Assisting with the planning and filing of the bankruptcy case and administration of the bankruptcy case including preparation of filings and creditor claim analyses.
- Contacting more than 200 financial and strategic buyers in connection with the sale of the gas stations and related assets.
- Coordinating due diligence requests and manage a data room.
- Soliciting stalking horse proposals.
- Conducting auction for the sale of the company’s assets.
The restructuring and sale process resulted in significant proceeds for the company’s lenders and other creditors.