North Carolina Oil Company Seeks Debt Relief in Chapter 7 Bankruptcy
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North Carolina Oil Company Seeks Debt Relief in Chapter 7 Bankruptcy

September 11, 2012

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An oil company based in Morganton, North Carolina is filing for Chapter 7 bankruptcy in a U.S. Bankruptcy Court in Asheville, according to a report from The News Herald.

Sources say that McCombs Oil and Propane Company, which had offices in four different North Carolina towns, also shut down its operations and told reporters that it plans to transfer its accounts to nearby Burke Oil Company.

When individuals file for Chapter 7 bankruptcy (over 1 million per year on average), provided they meet the terms of the Chapter 7 means test, they usually discharge some or all of their debts after selling off some of their non-exempt assets.

When companies file for Chapter 7, however, they often try to sell off as many of their assets as possible in order to meet their debts. In the case of McCombs Oil, the company will be assigned a bankruptcy court trustee who will be given the task of selling the oil group’s various assets in order to repay its creditors.

After the completion of the sale, the company will officially stop operating. According to local sources, the financial struggles of the oil company came as quite a surprise, especially since the company, which is currently owned by Tom McCombs, has been operating for nearly 50 years.

Apparently, McCombs told his workers about the bankruptcy only one day before the company filed.

The owner refused to answer calls from local reporters, but employees willing to be interviewed by the The News Herald suggested that business had been slow for the company, which makes many home deliveries, due to a warm winter and hot summer, both of which reduced consumers’ need for heating oil.

According to one employee, the company had a "real strong customer base" but its revenues sunk dramatically because local residents "didn’t burn hardly any oil this past year."

Unfortunately for the employees, the firm’s workers were not going to continue receiving any of their previous benefits, and sources do not know whether the new owner, Burke Oil, will retain any of the company’s former employees.


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