The January 29 filing cited by the newspaper indicates that Lykins Enterprises has 50 to 99 creditors. The company has assets of $50,000 or less and liabilities between $1 million and $10 million. The company's three largest unsecured [image-nocss] creditors are Chevron Oil Products, which it owes $841,444.28; Marathon, which it owes $480,085.07; and Shell Oil, which it owes $425,179.46, according to the report.
In the days after the initial filing, the report said, Lykins Eneterprises reached a deal with Chevron and Shell to continue receiving fuel and will pre-pay for petroleum products.
"The good news is we have valuable assets, and we are optimistic we will be able to meet our obligations going forward," Lykins Enterprises founder David O. Lykins Jr. told the newspaper. "We appreciate the support of our vendors and suppliers, but most of all, our customers in both wholesale and retail."
He added that customers will not see any difference in the company's day-to-day operations.
"We plan on revising our cash management system, tightening up our receivables and emerging from Chapter 11 as soon as possible," Lykins said.
Citing the bankruptcy filing, the paper said that the company first experienced cash flow problems in 2007 in the midst of a two-year expansion that saw the construction of four stores and the purchase of an additional one.
The filing also stated that an employee was found to be embezzling funds during that time period and "to compensate for the financial hardship," the company leased four of its 14 convenience stores.
The company's problems continued in 2008 as the price of oil fell and gasoline revenues declined, said the report. In mid-2009, the company lost about $1 million in a short time when the price of oil dropped, the filing stated.
Lykins Enterprises also blamed the growing presence of gas stations operated by large retailers like Wal-Mart that undercut their profit margins on gasoline, said the report. And the company said its short-term cash flows have been affected by confusion from its fuel suppliers, who have charged the company for purchases made by an unrelated Ohio business with a similar nameMilford, Ohio-based Lykins Cos. That company has not filed for bankruptcy.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.