Flying J, which has been operating under Chapter 11 bankruptcy proceedings since December, 2008, has reached a preliminary agreement with Pilot Travel Centers, which would allow the operator of truckstops and other businesses to emerge from bankruptcy.
Under terms of the agreement, subject to the U.S. Bankruptcy Court’s approval, Pilot will provide $100 million in debtor-in-possession financing for Flying J’s core travel business operations. The deal does not include any other Flying J assets.
“After a careful and exhaustive review of the alternatives available, we have concluded that a merger with Pilot represents the best possible outcome for Flying J, our creditors, our customers, and our employees,” said Crystal Call Maggelet, chairman of the board of Flying J. “Over the next few months, we will negotiate definitive agreements to merge our companies. This transaction will allow us to emerge from the bankruptcy process relatively quickly thereafter and to start a new chapter in the Flying J story.”
Flying J said it filed for bankruptcy protection after the sudden drop in oil prices and the disruption of the credit markets brought pressure on the company’s liquidity position. In addition to its travel center business, Flying J owns Longhorn Pipeline, Big West Oil, Flying J Oil & Gas, Haycock Petroleum and Transportation Alliance Bank.
“We believe that by combining Flying J and Pilot we will better serve our customers by more efficiently providing them with the products and services they need,” said Jimmy Haslam, Pilot CEO. “We look forward to working closely with Flying J and its employees during the Chapter 11 emergence process, and as we take the next steps of a new beginning for both of our companies.”
Pilot Travel Centers operates over 300 travel plazas in 41 states.