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Troubled motor oil company files for Chapter 11 bankruptcy

Financial distress has forced some major companies in the automotive industry to file for Chapter 11 bankruptcy this year.

Electric vehicle maker Fisker Group has been the lone automaker to file bankruptcy as it filed for Chapter 11 protection on June 18. The Manhattan Beach, Calif., EV maker blamed various market and macroeconomic headwinds for causing its financial distress that led to its bankruptcy.

Related: Iconic auto parts retailer files 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 U.S., however, Wheel Pros, which operates as auto parts distributor and retailer Hoonigan, filed for a prepackaged Chapter 11 bankruptcy on Sept. 9 that would eliminate $1.2 billion in debt and provide about $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 distressed petroleum products company Stanley Oil & Lubricants on Sept. 17 filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Eastern District of New York after a U.S. District Court judge granted one of the debtor’s suppliers a preliminary injunction against it in a trademark and copyright infringement lawsuit, freezing certain assets and halting certain business activities.

Related: Distressed shipping company files Chapter 7 bankruptcy to liquidate

The Melville, N.Y., debtor listed up to $50,000 in assets and $1 million to $10 million in debts in its petition. It indicated that no funds would be available to pay unsecured creditors after any administrative expenses were paid.

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

HUM Images/Getty Images

Stanley Oil loses preliminary injunction decision

Stanley Oil & Lubricants filed its bankruptcy petition 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 Frankfurt am Main, Germany-based General Petroleum GmbH, a manufacturer of automotive, industrial, and marine lubricants.

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The preliminary injunction enjoined Stanley Oil from manufacturing, importing, distributing, and selling any products using General Petroleum’s trademarks, or any confusingly similar marks and froze the debtor’s assets related to the alleged selling of its goods with counterfeit marks or other illegal activities.

Stanley Oil in August 2019 began doing business with General Petroleum, purchasing petroleum products from the company in Sharjah, UAE, to sell in the United States, court papers said. The agreement 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, cybersquatting, cancellation of fraudulently obtained trademark registration, and that the defendant was trafficking goods bearing counterfeit marks.

The parties subsequently held productive settlement discussions for several weeks and agreed to basic terms, according to court papers. The discussions ended around June 12 after the debtor replaced its counsel. On June 14, General Petroleum filed for a preliminary injunction.

Morrison found in favor of General Petroleum’s request for a preliminary injunction on all of the issues since the company demonstrated a likelihood that it would succeed on the merits of its trademark infringement, unfair competition, trafficking in counterfeit goods, copyright infringement, cybersquatting, and irreparable harm claims, the judgment said.

Stanley Oil’s Chapter 11 bankruptcy filing places an automatic stay on any pending litigation while its case proceeds.

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

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

Related: Veteran fund manager sees world of pain coming for stocks


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