Troubled motor oil company files for Chapter 11 bankruptcy

Financial difficulties have forced some major auto companies to file for Chapter 11 bankruptcy this year.

Electric vehicle maker Fisker Group was the only automaker to file for bankruptcy as it filed for Chapter 11 protection on June 18. The Manhattan Beach, Calif.-based electric vehicle maker blamed various market and macroeconomic difficulties for causing the financial difficulties that led to the bankruptcy.

Related: Iconic Auto Parts Retailers File for Chapter 11 Bankruptcy

The auto parts segment has been hit pretty hard globally as 20 German EV auto parts manufacturers filed for bankruptcy in the first half of 2024.

In the US, however, Wheel Pros, which operates as a Hoonigan auto parts distributor and retailer, filed for prepackaged Chapter 11 bankruptcy on Sept. 9, which would eliminate $1.2 billion in debt and provide approximately $570 million in new capital through an exit facility.

Wheel Pros’ bankruptcy followed the December 2023 Chapter 11 filing by PartsID, which operates an e-commerce auto parts retail business.

And now struggling petroleum products company Stanley Oil & Lubricants filed for Chapter 11 protection on Sept. 17 in the U.S. Bankruptcy Court for the Eastern District of New York after a judge of US District Court granted one of the debtor’s suppliers a preliminary injunction against it. lawsuit for trademark and copyright infringement, freezing certain assets and stopping certain business activities.

Related: Troubled shipping company files for Chapter 7 bankruptcy for liquidation

In his petition, the Melville, NY, debtor listed assets of up to $50,000 and debts of $1 million to $10 million. It indicated that no funds would be available to pay unsecured creditors after paying any administrative costs.

Stanley Oil & Lubricants has filed for Chapter 11 bankruptcy protection. (Photo: HUM Images/Universal Images Group via Getty Images)

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Stanley Oil loses preliminary injunction

Stanley Oil & Lubricants filed for bankruptcy after U.S. District Judge Nina R. Morrison on Sept. 11 granted a preliminary injunction in the U.S. District Court for the Eastern District of New York to General Petroleum GmbH, a manufacturer based in Frankfurt am Main, Germany. of automotive, industrial and marine lubricants.

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The preliminary injunction ordered Stanley Oil to manufacture, import, distribute, and sell any products that used General Petroleum’s trademarks or any confusingly similar marks, and froze the debtor’s assets related to the alleged sale of its counterfeit-branded goods or other illegal activities.

Stanley Oil began doing business with General Petroleum in August 2019, buying petroleum products from the Sharjah, United Arab Emirates-based company to sell in the United States, court documents said. The deal led to a five-year dispute over trademarks, copyrights and other business dealings.

General Petroleum on March 28, 2024 filed a lawsuit against Stanley in the Eastern District of New York, alleging trademark infringement, copyright infringement, unfair competition, deceptive trade practices, breach of contract, cyber squatting, cancellation of trademark registration obtained fraudulently and that the defendant was trafficking goods bearing counterfeit marks.

The parties subsequently engaged in productive settlement discussions for several weeks and agreed to some basic terms, according to court documents. Talks ended around June 12 after the debtor replaced counsel. On June 14, General Petroleum filed a motion for preliminary injunction.

Morrison favored General Petroleum’s request for a preliminary injunction on all issues because the company had demonstrated a likelihood of success on the merits of trademark infringement, unfair competition, trafficking in counterfeit goods, copyright infringement, cyber occupation and irreparable. damage claims, the ruling said.

Stanley Oil’s Chapter 11 bankruptcy filing places an automatic stay on any pending litigation while the case plays out.

The debtor’s bankruptcy attorney did not immediately respond to a request for comment

Stanley Oil markets automotive, industrial and marine lubricants; grease for automobiles; additives and chemicals; brake fluid and coolant; and base oil, under the Stanley, Syntrol, Prime and Hexagen brands, according to its website.

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