FUEL..nothing new just a little bit easier to read..
SMF Energy Corp. , a publicly traded company based in Fort Lauderdale, filed for Chapter 11 bankruptcy on Sunday after Wells Fargo Bank filed a notice of default on its financing.
According to the Wells Fargo letter, one of the conditions prompting default was the existence of a 'government investigation' but no further details about the investigation were disclosed.
On its bankruptcy petition, the company cited debt of $25 million and assets of $37 million.
SMF Energy (NASDAQ: FUEL) is a distributor of fuel products to commercial industries. Three subsidiaries also filed for bankruptcy: SMF Services, Streicher Realty and H&W Petroleum Co.
SMF’s stock tumbled 54 cents per share in morning trading to 30 cents per share, a new 52-week low. The 52-week high was $4.22 on Feb. 15. The company’s share price had often benefitted during periods of higher oil prices .
The companies said in a statement they hope to operate as "debtors in possession" under jurisdiction of the bankruptcy court, and they expect their lender to allow them to access cash collateral to do that.
SMF said in a news release that Wells Fargo filed a default notice April 13 on $11.2 million outstanding in a loan agreement with the bank, consisting of about $8 million in revolving loans, a $2.2 million unpaid balance of a term loan, and a $1 million mortgage loan.
SMF said it expects to be required to liquidate some portions of its assets.
On March 16, the company had signaled that it expected a substantial reduction in sales revenue and earnings because of changes in its pricing structure, that it was cutting where it could, and was considering “an overhaul of its business model” including possible staff reductions and renegotiated debt.
On March 22, the company appointed Soneet Kapila of Kapila & Co., as a chief restructuring officer. Bankruptcy counsel to SMF is Paul Battista of Genovese Joblove & Battista.
The company acknowledged in a news release that “efforts to reduce operating losses by increasing revenue and decreasing expenses have been unsuccessful.”
