Mounting Debt Forces C-store Operator Into Bankruptcy
CODY, Wyo. -- As the country's economic picture continues to cloud over, a family-owned convenience store chain in Wyoming is taking steps to turn the tides. Red Eagle Oil Inc., which operates 15 Red Eagle Food Stores gas stations/convenience stores, filed for Chapter 11 bankruptcy in Wyoming Federal Bankruptcy Court earlier this month.
In its filing, the company cited the economic downturn and an inability over the past two years to collect some money it is owed. Additional court documents indicate Red Eagle has not been able to pay many of its bills since April, according to the Powell Tribune. By filing for bankruptcy, the company hopes to reorganize, but has also said it does not expect to be able to pay creditors.
At a hearing last week, Judge Peter J. McNiff ruled that the company, which is owned by Dale, Judy, Bryan, Brad and Scott Hinze, can conduct business as usual. The next court date is slated for Aug. 22.
"While [Red Eagle Oil's] business has suffered in the midst of the current economic downturn, its stores have greater value as an operating enterprise than being closed and the assets sold piecemeal," the company's bankruptcy attorney, Bradley Hunsicker of Casper, wrote in a motion.
At last count, Red Eagle employs 114 people including owners, office staff, store clerks and truck drivers. The company owns all of its locations, including gas and merchandise. In addition, except for two stores in Cody, Wyo., a separate corporation owned by the Hinzes, Read Eagle LLC, owns the c-stores' land and buildings, according to the news outlet.
Red Eagle also sells fuel wholesale as a distributor, and hauls condensate, crude oil and other oil field commodities with a fleet of 26 trucks and 60 trailers.
Strapped by economic woes since 2009, Red Eagle has been hit with at least four lawsuits for allegedly failing to pay for its fuel and supplies. According to the media report, the unpaid debts claimed in those suits total more than $3.86 million. In one of the cases, Wyoming Federal District Court Judge Nancy Freudenthal ruled that Red Eagle must pay more than $1.3 million to DATS Trucking of Utah to settle that debt. The bankruptcy petition freezes all suits against the company.
In addition to the Red Eagle Food Stores, the Hinze family owns several other properties through separate corporations, including the One Stop Shoppe and Plaza Fuel sites in Powell, Wyo., and the Libations liquor store in Cody.