Kiel Bros. sells properties in bulk

Byline: Terry Brennan

It took multiple bidding rounds before the $31.88 million offer by Bulk Petroleum Corp. captured an estimated 200 properties owned by bankrupt Kiel Bros. Oil Co.

Marinette, Wis.-based Bulk Petroleum bested the $28 million stalking-horse offer by Marathon Oil Co. in a seesaw auction that lasted late into the night Thursday, Oct. 28, said an attorney who requested anonymity.

Liquidating Kiel Bros. will present Bulk Petroleum’s winning bid for approval on Tuesday before Judge Basil Lorch III of the U.S. Bankruptcy Court for the Southern District of Indiana in Indianapolis.

Columbus, Ind.-based Kiel Bros., a convenience store operator and wholesale fuel dealer, will present Bulk Petroleum’s offer to the court even though an overbid auction process was designed to sell all of its 329 properties.

Kiel Bros. was still trying to auction off a total of 61 properties Friday that aren’t included in the Bulk Petroleum proposal, according to MarketplaceAdvisors of Scottsdale, Ariz., the M&A adviser to the debtor that is shopping the assets.

Debtor counsel Baker & Daniels did not return calls Friday.

With its bid, Bulk Petroleum is attempting to acquire an estimated 139 convenience stores along with multiple wholesale dealer fuel contracts after it failed to acquire Kiel Bros. four months ago.

That acquisition attempt was slated to close on June 30 but fizzled because of a lack of adequate financing.

The deal’s collapse led Kiel Bros. to file for Chapter 11 protection on June 15 in New Albany, Ind., before the case was transferred to Indianapolis two days later. The company listed $50.2 million in assets and $56.7 million in liabilities at filing.

Kiel Bros. operated 210 convenience stores and 90 wholesale fuel dealerships in Illinois, Indiana and Kentucky under the Tobacco Road brand at filing.

Roughly 170 bidders initially stepped forward with offers for some of the properties Kiel Bros. put up for auction.

The company whittled down the number by characterizing the best offers as stalking-horse bids. Overbid auctions were then held in Indianapolis on Thursday and Friday, and all the winning bids are scheduled to be presented at the sale hearing.

National City Bank of Indiana has rolled over its prepetition credit facility into a $23.5 million debtor-in-possession loan. Kiel Bros., meanwhile, was granted a 60-day extension on Oct. 6 on its exclusive right to file a plan of liquidation.

Gregg Budoi is shopping the assets for MarketplaceAdvisors. Jay Jaffe is debtor counsel at Baker & Daniels in Indianapolis.

Scott Hazan and Brett Miller represent the creditors in New York at Otterbourg, Steindler, Houston & Rosen PC.

COMPANY: Bulk Petroleum Corp.

COMPANY: Kiel Bros. Oil Co.

COMPANY: Marathon Oil Co.


COPYRIGHT 2004 Gale Group

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