The U.S. outposts of Danish shipping-fuel supplier OW Bunker had been valued at $1 billion in March — but by this month, the company is at the brink of collapsing.
On Thursday, Nov. 13, OW Bunker filed for Chapter 11 bankruptcy at the U.S. Bankruptcy Court in Bridgeport, CT. According to Bloomberg, the company listed assets of about $50 million, with its total debt exceeding $100 million.
The bankruptcy comes after news of massive internal fraud that cost the company $125 million. OW Bunker, which sells approximately 7% of the fuel used by the global shipping industry, lost another $150 million as a result of bad risk management.
In the U.S., Chapter 11 bankruptcy allows companies and organizations to create a court-approved debt restructuring plan. Of the approximately 1,071,932 bankruptcies filed throughout the U.S. in 2013, about 8,980 of them were Chapter 11 bankruptcies.
It seems unlikely that OW Bunker will be able to salvage itself with this bankruptcy, however. Both the Danish and American units of OW Bunker have ceased operations since the filings, Bloomberg reports.
“Without the provision of new, significant credit facilities in the immediate future, it is not possible to save the remaining business,” Chairman Niels Henrik Jensen said on the company website. “It is now clear that such facilities will not be made available.”
Before its bankruptcy, OW Bunker had operated in 29 countries. Its units in Singapore have been at the center of the company’s internal fraud concerns. Two OW Bunker units in Singapore have been sued for $19.8 million, according to Bloomberg.
As OW Bunker’s Chapter 11 bankruptcy moves forward, it may become more clear as to how the company landed itself in so much debt, especially since it had been Denmark’s second-largest IPO just eight months ago.
“This process will take some time to untangle,” Michael Enright, a lawyer for the subsidiaries, said in a Nov. 14 court filing.