Refining Cracks and Credit
At first glance, the news was stunning: Ogden, Utah-based Flying J Inc., one of the nation’s 20 largest private companies, files for Chapter 11 bankruptcy protection. But at its root? The collapse in oil prices and clenched credit markets.
Flying J’s president and CEO, J. Phillip Adams, explained that the company, operator of refineries in North Salt Lake, Utah, and Bakersfield, Calif., and 250 travel centers, used oil as collateral. As crude plunged, the $18-billion company was forced to write downthe collateral’s value by $100 a barrel, defaulting on some loans and unable to tap new credit.