SMF Energy files for Chapter 11 reorganization, stock to resume trading at 7:50 (FUEL) 0.84 : Co and its subsidiaries, H & W Petroleum Company, Inc., SMF Services, Inc., and Streicher Realty, Inc., have filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code, in the United States Bankruptcy Court for the Southern District of Florida. Without considering any penalties or additional charges resulting from the Lender's declaration of the Events of Default, the current balance owed to the Lender under the Loan Agreement is approximately $11.2 mln, consisting of around $8 mln in revolving loans, a $2.2 mln unpaid balance of a Term Loan, and a $1.0 mln mortgage loan. It is the Company's current expectation that the Lender will consent to or support the Companies' use of the Lender's cash collateral to continue to operate only those portions of the Companies' business that have a discernible value as an ongoing enterprise. As a result, the Company expects that it will be required to promptly commence the liquidation of the assets of those portions of the Companies' business that are not believed to have a going concern value.
To date, the Company's efforts to reduce operating losses by increasing revenue and decreasing expenses have been unsuccessful. Competitive pressures have prevented the Company from increasing prices and, despite layoffs and other cost cutting measures, expenses have not been reduced in an amount sufficient to offset the decreased revenue since the change in pricing structure. The Company does, however, intend to continue to pursue strategic alternatives after the Voluntary Petitions for those portions of the Companies' business that have a discernible value as an ongoing enterprise.
