October 19, 2012 4:13 pm
In a surprising move that occurs just over a year after its grand opening, Metro Biofuels is filing for bankruptcy along with its parent company, Metro Fuel Oil Corp., and eight subsidiaries. The company has a large facility at Enterprise Park in Calverton.
The corporation plans to continue doing business during the course of the Chapter 11bankruptcy, and the bankruptcy court has made $3 million in financing available in addition to its normal revenue to keep the company running.
Metro supplies and delivers biofuel alternatives and natural gas through the stimulus-funded rail spur leading to the Calverton facility. The company reportedly has $100 million in debt — about twice the amount of its assets. However, Metro Fuel Oil still hopes to raise capital and funds to meet its obligations and continue to supply products to residents and businesses in the area.
Business bankruptcy filings are not always indicative of a hopeless business situation. In fact, in many instances, companies that have been caught in circumstances due to market shifts can file for Chapter 11 reorganization to allow creditors to secure their positions and to reduce their debt load so that they can keep operating at peak capacity and making money to pay off outstanding debts.
When considering Chapter 11, it may be helpful to speak with an experienced attorney. In order to successfully complete the process, you must not only understand the complex inter-relationships that exist within a business’s corporate structure, but must also understand how to leverage bankruptcy protections to allow companies to continue their operations so that they are able to generate income to pay debts.
Source: Riverhead Patch, “Metro Fuel Oil Files for Bankruptcy,” Joseph Pinciaro, Oct. 1, 2012
Source: Bloomberg, “Metro Fuel Oil Files Bankruptcy in Brooklyn With Sale Plan,” Tiffany Kary, Sept. 27, 2012