Flying J Inc and Pilot Travel Centers LLC have entered into a preliminary merger agreement that will provide a framework for Flying J’s core travel plaza business to emerge from Chapter 11 bankruptcy protection.
Under terms of the letter of intent filed with the US Bankruptcy Court in Delaware, the value indicated would allow all Flying J creditor obligations to be paid in full. Pilot has also agreed to provide $100 million in debtor-in-possession financing for Flying J’s operations, subject to court approval and various conditions.
“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.
The preliminary merger agreement with Pilot pertains specifically to Flying J’s core travel plaza business, and it excludes Longhorn Pipeline, Big West Oil, Flying J Oil & Gas, Haycock Petroleum, and Transportation Alliance Bank. Flying J is pursuing or evaluating alternatives for each of these other businesses.
Flying J filed for Chapter 11 protections December 22, 2008, after a precipitous drop in oil prices and disruption in the credit markets brought to bear significant short-term pressure on the company’s liquidity position.
Based in Ogden UT, Flying J is among the 20 largest private companies in America, with 2007 sales exceeding $16 billion.
Pilot Travel Centers is the nation’s largest retail operator of travel centers, operating in 41 states with more than 300 retail interstate properties. The company is headquartered in Knoxville TN.