Getty Petroleum Seeks Bankruptcy Protection for Oil Cleanup Costs
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Getty Petroleum Seeks Bankruptcy Protection for Oil Cleanup Costs

December 20, 2011


Getty Petroleum Marketing Inc., a major fuel marketer that serves as a liaison between oil distributors and gasoline retailers filed for bankruptcy this week after high environmental cleanup costs left the company in a financially vulnerable position.

In its bankruptcy petition, which was filed in U.S. Bankruptcy Court in Manhattan, the company claims that it had assets of more than $50 million, but that its total debts topped this lofty sum, as well, according to a recent report from Bloomberg BusinessWeek.

The largest creditor listed for the fuel marketer is Bionol Clearfield LLC, to whom Getty Petroleum owes $230 million after an arbitrator awarded Bionol that sum for a disputed ethanol supply contract. The key here, though, is that Getty seems to be disputing this claim.

While the bankruptcy judge will have to sort out the ramifications of this disputer creditor claim, Getty and its bankruptcy attorneys hope that the filing will help the company emerge "operationally stronger and with a better balance sheet."

In addition, the company spun its bankruptcy filing as an effort to "hasten environmental cleanup" of various spills for which Getty Petroleum holds some responsibility. The company also assured its contractors and employees that it would remain in business while it was filing bankruptcy.

According to a Getty press release, the company promise to continue purchasing and delivering gasoline to retailers, paying its truckers, compensating utility and maintenance companies, and continuing to "honor its environmental remediation obligations."

In its Chapter 11 bankruptcy filing, the company hopes to take advantage of corporate bankruptcy law and reorganize the group into a leaner, more profitable outfit.

The future still holds some promise for the relatively young company, which was started in 1997 during headier economic times. Currently, the company helps service 765 different leases between landlords and gas station operators.

In short, Getty Petroleum helps keep gas stations operating. The company’s financial struggles, however, ensure that it will likely emerge from bankruptcy with an entirely different look.

In fact, serious alterations to the company have already begun, as Getty Petroleum was recently purchased by Cambridge Petroleum Holding Inc. The buyer certainly hopes that bankruptcy will help stem the flow of leaking money from the firm’s cash wells.

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