Troubled motor oil company files for Chapter 11 bankruptcy
According to The Street, Financial challenges have prompted several major companies in the automotive sector to seek Chapter 11 bankruptcy protection this year.
Fisker Group’s Bankruptcy
Electric vehicle maker Fisker Group has emerged as the only automaker to file for bankruptcy, submitting its Chapter 11 petition on June 18. The California-based EV manufacturer attributed its financial difficulties to various market and macroeconomic factors that contributed to its distress.
Auto Parts Sector Impact
The global auto parts industry has also felt the strain, with 20 German EV auto parts manufacturers filing for bankruptcy in the first half of 2024. This trend reflects broader challenges facing the automotive supply chain.
Wheel Pros and PartsID
In the U.S., Wheel Pros, operating under the auto parts distributor and retailer Hoonigan, filed for a prepackaged Chapter 11 bankruptcy on September 9. This move is set to eliminate $1.2 billion in debt and secure approximately $570 million in new capital through an exit facility. Wheel Pros’ bankruptcy follows a December 2023 Chapter 11 filing by PartsID, which runs an e-commerce auto parts retail business.
Stanley Oil & Lubricants Files for Bankruptcy
Distressed petroleum products company Stanley Oil & Lubricants filed for Chapter 11 protection on September 17 in the U.S. Bankruptcy Court for the Eastern District of New York. This filing came after a U.S. District Court judge granted a preliminary injunction to one of Stanley Oil’s suppliers, General Petroleum GmbH, regarding trademark and copyright infringement. This injunction froze certain assets and halted some of Stanley Oil’s business activities.
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Stanley Oil, based in Melville, N.Y., reported assets valued at up to $50,000 and debts ranging from $1 million to $10 million in its bankruptcy petition. The company indicated that there would be no funds available to pay unsecured creditors after covering administrative expenses.
Legal Troubles for Stanley Oil
The bankruptcy filing followed a September 11 ruling by U.S. District Judge Nina R. Morrison, who granted a preliminary injunction that prohibited Stanley Oil from manufacturing, importing, distributing, or selling any products bearing General Petroleum’s trademarks or similar marks. This injunction also froze assets related to the alleged sale of goods with counterfeit marks.
Stanley Oil began its relationship with General Petroleum in August 2019, purchasing petroleum products for sale in the United States. This partnership led to a protracted dispute over trademarks, copyrights, and business practices.
General Petroleum filed a lawsuit against Stanley Oil on March 28, 2024, accusing it of trademark and copyright infringement, unfair competition, and other deceptive practices. Although the parties engaged in settlement discussions, they collapsed around June 12, after Stanley Oil changed its legal counsel. General Petroleum subsequently sought a preliminary injunction on June 14.
Judge Morrison ruled in favor of General Petroleum’s request, determining that the company had demonstrated a likelihood of success on its claims of trademark infringement, unfair competition, and related issues, establishing the risk of irreparable harm.
