Reb of Florida Seeks Bankruptcy Protection
Chapter 11 filings triggered by judgments entered against joint-venture marketer, legal fees
Published in CSP Daily News
STUART, Fla. -- Southeast marketer Reb of Florida Inc. has filed for Chapter 11 bankruptcy protection, CSP Daily News has learned. Early filings by the Stuart, Fla.-based company put secured and unsecured claims at around $14 million. Creditors include ChevronTexaco, Shell, Marathon, four large common carriers and several banks.
In a separate case, Reb owner Daniel W. McCravy III also is seeking personal Chapter 11 protection, court filings show. His 20 largest unsecured creditors include ChevronTexaco and CITGO. He personally guaranteed fuel purchases from the two suppliers for $815,000 and $183,000, respectively.
In first-day filings, Reb is seeking court permission to continue paying Chevron and Motiva Enterprises, Shell's East Coast marketing arm, on net 10-day terms so the refiners do not call in their letters of credit. Reb said it sells from $500,000 to $1 million-worth of gasoline daily through dealers. It is also seeking permission to continue paying four common carriers, including Kenan Transport Co. and Southfork Transportation LLC. Its total weekly tab with the four firms usually runs around $30,000, it said in an October 27 filing.
Reb owns 20 branded stations and has supply agreements with approximately 100 sites, McCravy told CSP Daily News yesterday. In all, the company moves approximately 80 million gallons a year of fuel.
McCravy filed for bankruptcy protection because of judgments entered against a marketer with whom he did business in the past and legal fees that he incurred as a result.
Reb agreed several years ago to supply stations leased by Ali M. Jaferi, a businessman who operated multiple companies, including USA Grocers Group, Trico Petroleum and AJ Petroleum LLC. Jaferi subsequently used one of his companies, a 50-50 joint-venture company established with Reb called USAG Petro, to enter into various transactions that McCravy said he knew nothing about at the time.
Among those who sued Jaferi were a group of investors, Petroleum Realty LLC, which had leased 27 properties to Jaferi's enterprises. The group claimed it was owed in excess of $9 million because of alleged defaults on rent and insurance payments by the joint venture company.
Petroleum Realty alleged Jaferi operated a complex supply and distribution business in Florida and Georgia through more than 100 companies, divesting and concealing assets "in an effort to stymie creditors." It subsequently won damages against Jaferi in excess of $14 million, according to documents filed in a Florida state court, and forced Jaferi into Chapter 7 involuntary liquidation.
Jaferi has since returned to Pakistan, leaving McCravy to deal with the mess, according to Robert Furr, an attorney representing McCravy and his company. "Ali Jaferi had a company that my client unfortunately did business with," Furr told CSP Daily News.
"Probably the largest reason for the filing, besides what we're facing as a wholesaler in today's market, can be put down to the lawsuit that has been going on for years now involving Ali Jaferi," McCravy said yesterday, "but we'll come out of this in good shape."