Omaha Jiffy Lube franchisee files for bankruptcy protection
An Omaha company that claims to be the nation's largest Jiffy Lube fanchisee, Heartland Automotive Holdings, is seeking protection from creditors in a Chapter 11 bankruptcy filing.
Heartland, which has more than 4,000 employees and 438 oil-change stores in 20 states, has its headquarters at 11308 Davenport St. It has 17 stores in Nebraska, including eight in Omaha and six in Lincoln.
Eric Glover, chief executive, said in a press release that the privately held company sought protection in U.S. Bankruptcy Court in Fort Worth, Texas, in order to resolve disputes with Jiffy Lube International and to reorganize its finances.
A secretary at Glover’s office said he was unavailable to comment and referred questions to Ralph Tschantz, vice president, who did not immediately return a phone call Friday.
In court papers, the firm said it had assets of about $334 million and liabilities totaling about $396 million.
Glover said in the press release that the businesses would continue operating. Heartland Automotive Holdings has more than $8 million in cash on hand and an interim financing commitment of $10 million from its principal shareholder, Quad-C Management, Glover said.
He said the decision to file for protection from creditors was prompted by:
• The breakdown of negotiations with Jiffy Lube International to resolve long-standing disputes, including how to spend advertising dollars; revamping the chain’s image; and the level of support from Jiffy Lube International.
• A decline in financial performance precipitated by rising gas and oil costs.
“Based on the size and strength of our company,” Glover said in the press release, “we anticipate that our reorganization will provide a full recovery to all of our creditors, including our senior banks and Blackstone Mezzanine Holdings, as well as leaving existing equity in place.”
Glover said if the company cannot work out a solution with Jiffy Lube International, Heartland would ask the court to scrap its franchise agreements. Heartland then would proceed with a plan to exit Chapter 11 as a rebranded business.
“While we would prefer to find a solution that would permit us to continue as part of the Jiffy Lube network, we will not compromise the recoveries of our stakeholders and employees to do so,” Glover said.
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