Update: Bunkers International Files for Chapter 11 Bankruptcy With Debts of $40 Million

Bunkers International said the Chapter 11 filing was necessary to avoid the arrest of vessels it had recently bunkered

• Update 1 - Added debt details, comments from the company's bankruptcy attorney

Bunkers International Corp. (Bunkers International) late Friday announced in an emailed statement that it has filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code.

"The companies were forced to take this action after their primary lender ceased lending and swept all available cash," the company said in a statement.

Bunkers International says that it intends to continue to operate during the Chapter 11 process and will "restructure its debts in an efficient manner," with CEO and founder John Canal understood to be seeking new financing arrangements.

"Although the Bankruptcy Code does not allow the company to pay for goods and services incurred prior to the filing date, the company will be current on all post‐filing obligations," Bunkers International said.

Scott Shuker, the company's bankruptcy attorney, said the Orlando, Florida-based bunker business had not missed any payments, but had failed to meet one of the technical conditions for its credit facility.

The Chapter 11 filing was then necessary to avoid the arrest of vessels it had recently bunkered, he added.

The company is understood to have cited almost $40 million in debts, and listed $1 million in debts to American Express as well as to companies in a number of international locations including Venezuela, Curacao, and Singapore.

"The company didn't miss payments, it was a technical default. The lender cut off funding which forced the company to shrink. If we didn't file for bankruptcy, some of the ships that were recently fueled could have been seized," Shuker was quoted as saying.

Bunkers International was founded in 1995 and reported revenues of about $740 million in 2014.

The company provides physical supply, trading, and brokering services from a number of global locating including those in the U.S., Singapore, Greece, and the United Kingdom, and says it is the largest marine fuel supplier in Colombia through its BunkersOil Colombia joint venture with Vanoil, S.A..

In 2013 Bunkers International formed Mobile, Alabama based-Atlantic Gulf Bunkering LLC, which has a supply operation in the U.S. Gulf market.