Flying J, Inc.

Background

Flying J was an $18 billion integrated oil company with operations in exploration, production, refining, transportation, wholesaling and retailing of petroleum products, including 250 travel plazas and over 16,000 employees.

It was a leveraged company with consolidated third party debt in excess of $1.3 billion. Its liquidity was impacted severely by a rapid decline in crude and refined product prices during the second half of 2008.

Project

A Zolfo Cooper senior professional was appointed Chief Restructuring Officer in Januray 2009, three weeks after emergency filing for Chapter 11. The Zolfo Cooper team’s immediate focus was managing the crisis and stabilizing the situation, including:

  • Stabilizing and managing cash to be able to operate without DIP financing, secure ongoing supply of products (despite liquidity constraints and significant vendor apprehension) and fund a plan of reorganization.
  • Designing a business plan that identified core assets and going forward strategy for resource allocation and liquidity.
  • Enhancing liquidity situation through austerity measures, including elimination of funding of non-performing assets, and sales of non-core assets.
  • Managing communications with all constituents including, the Court, the U.S. Trustee, the unsecured creditors committee, secured lenders, sureties and their respective professionals.
  • Administering the process and reducing claims from over $6 billion to approximately $1.5 billion prior to the confirmation of a plan of reorganization.

Outcome

Zolfo Cooper’s leadership and critical experience resulted in a restructured core entity with adjusted EBITDAR exceeding $325 million and a combination of asset sales and refinancing to fund an exit from Chapter 11. The Zolfo Cooper team managed a sale process of non-core assets that contributed $660 million to the estate to facilitate creditor recoveries. Flying J Equity Holders maintained 100% of their pre-filing equity position and creditors received 100% plus interest, in cash.