A leading provider of petroleum, SMF Energy Corporation has recently filed a notice of Chapter 11 bankruptcy after defaulting on a loan. The company, based out of Florida also provides a distribution service for petroleum, transportation, and emergency response services to many different U.S. industries. They provide customers with commercial mobile and bulk fueling, in addition to integrated out-sourced management of fuel. SMF Energy Corp. delivers their fuel to customers on a regular basis, and as needed in emergency situations. With a fleet of over 200 commercial vehicles operating in 34 different locations throughout the United States, the company owns over 800 fueling tanks that can hold over 1.7 million gallons of fuel.
Recently, however, reports have noted that the popular fueling company has gone into default on a loan, according to the principal lender. The company allegedly owes $11.2 million with its current loan agreement with Wells Fargo & Co, not including the penalties for failing to pay the initial loan. Reports from NASDAQ state that the company, along with the subsidiaries SMF Services, Inc., H & W Petroleum Company, Inc. and Streicher Realty, Inc., have all filed a voluntary petition for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code. The company filed their petition in the United States Bankruptcy Court, Southern District of Florida, according to reports, after being notified on April 13 of their default on the loan. They have announced a plan to operate as "debtors in possession" with a close watch being made by the Court.
In addition to filing their bankruptcy petition, the principal lender of the company declared SMF Energy Corp. unable to access any of its own collections for any accounts receivable. The company, which owes a substantial amount to their principal lender, is said to have owed $8 million in revolving loans, $2.2 million in past due payments of the Term Loan, and $1 million for a mortgage loan. The lender is expected to allow the company to continue operations as debtors in possession and may require the company to liquidate the assets that are not considered to have a going concern value. As of March 16, the company projected that a large loss will occur for the quarter ending March 31, and announced plans to make up for these losses. On the 22 of March, the company then announced that it had appointed a Chief Restructuring Officer to assist with the company's efforts to reduce the expenses and therefore increase revenue. Reports note, however, that these efforts to reduce costs have thus far been unsuccessful.
Similar to many other companies and organizations throughout the United States, SMF Energy Corp. was simply unable to cut costs of production to make up for lost revenue over the last few years. With the current economic situation, this company is not the only one who has been forced to resolve their financial situation with Chapter 11 bankruptcy protection. Many other companies throughout the country have already filed their petitions, resolved their debts and exited bankruptcy status in a timely manner.
If you are a business owner seeking the protection of your company as you restructure your finances and work to pay back your debts, then Chapter 11 bankruptcy may be the best solution for you. As a process under the United States Bankruptcy Code, a Chapter 11 petition allows a business to reorganize their debts over a period of time to ensure the protection and overall well-being of the company. A bankruptcy attorney will be able to provide you and your company with the legal protection and advice you need at a time such as this. Don't hesitate to involve your local bankruptcy attorney if you are in need of assistance with overwhelming debt, as a consumer or a business owner.