Troubled motor oil company files for Chapter 11 bankruptcy
The automotive industry has faced significant challenges this year, forcing several major companies to file for Chapter 11 bankruptcy.
Fisker Group’s Bankruptcy Filing
Electric vehicle manufacturer Fisker Group became the only automaker to file for bankruptcy this year, seeking Chapter 11 protection on June 18. The California-based EV maker cited various market pressures and macroeconomic headwinds as the primary causes of its financial difficulties.
Impact on the Auto Parts Segment
The global auto parts industry has not been immune to these challenges. In the first half of 2024 alone, 20 German EV auto parts manufacturers declared bankruptcy. In the United States, Wheel Pros, an auto parts distributor and retailer operating as Hoonigan, filed for prepackaged Chapter 11 bankruptcy on September 9. This filing aims to eliminate $1.2 billion in debt and secure approximately $570 million in new capital through an exit facility.
Other Notable Bankruptcy Filings
Following Wheel Pros, PartsID, an e-commerce auto parts retailer, also filed for Chapter 11 bankruptcy in December 2023. Most recently, Stanley Oil & Lubricants filed for Chapter 11 protection on September 17 in the U.S. Bankruptcy Court for the Eastern District of New York. This decision came after a U.S. District Court judge granted one of Stanley’s suppliers a preliminary injunction in a trademark and copyright infringement lawsuit, which resulted in frozen assets and halted certain business operations.
Stanley Oil’s bankruptcy petition revealed that the company has up to $50,000 in assets and between $1 million and $10 million in debts. It also indicated that there would be no funds available to pay unsecured creditors after administrative expenses are covered.
Legal Troubles for Stanley Oil
Stanley Oil’s financial troubles were exacerbated by a preliminary injunction granted by U.S. District Judge Nina R. Morrison on September 11. The injunction, sought by General Petroleum GmbH—a German manufacturer of automotive and industrial lubricants—barred Stanley Oil from manufacturing, importing, distributing, or selling any products using General Petroleum’s trademarks or any similar marks. This legal action effectively froze Stanley Oil’s assets related to the alleged sale of goods with counterfeit marks.
The dispute began in August 2019 when Stanley Oil started purchasing petroleum products from General Petroleum for sale in the U.S. Over the following years, the relationship soured, leading to a five-year legal battle involving trademark and copyright disputes. General Petroleum filed a lawsuit against Stanley Oil on March 28, 2024, accusing the company of various infringements, including trademark infringement, copyright infringement, and unfair competition.
Despite attempts at settlement discussions, these efforts fell apart in June, prompting General Petroleum to seek a preliminary injunction. The court ruled in favor of General Petroleum, stating it demonstrated a likelihood of success on its claims of trademark infringement and other illegal practices.
Stanley Oil’s Chapter 11 filing automatically stays any ongoing litigation as the case progresses, and the company’s bankruptcy attorney has not yet commented on the situation. Stanley Oil markets a range of products, including automotive, industrial, and marine lubricants, as well as additives and chemicals, under various brand names like Stanley, Syntrol, Prime, and Hexagen.
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