Financial distress has forced several major companies in the automotive industry to file for Chapter 11 bankruptcy this year.
Electric vehicle manufacturer Fisker Group is the only automaker to have filed for Chapter 11 protection, which it did on June 18. The company, based in Manhattan Beach, California, attributed its financial difficulties to various market and macroeconomic challenges leading to the bankruptcy.
The auto parts sector has also faced significant challenges globally, with 20 German EV auto parts manufacturers declaring bankruptcy in the first half of 2024.
In the United States, Wheel Pros, operating as the auto parts distributor and retailer Hoonigan, filed for a prepackaged Chapter 11 bankruptcy on September 9. This restructuring plan aims to eliminate $1.2 billion in debt and provide approximately $570 million in new capital through an exit facility. This filing followed PartsID’s Chapter 11 bankruptcy declaration in December 2023, an e-commerce auto parts retail business.
Most recently, Stanley Oil & Lubricants, a petroleum products company, filed for Chapter 11 protection on September 17 in the U.S. Bankruptcy Court for the Eastern District of New York. This decision came after a U.S. District Court judge issued a preliminary injunction against Stanley Oil in a trademark and copyright infringement case, which led to the freezing of certain assets and a halt to specific business activities.
Stanley Oil, based in Melville, New York, listed up to $50,000 in assets and liabilities ranging from $1 million to $10 million in its bankruptcy petition. The company indicated that no funds would be available to pay unsecured creditors after meeting any administrative expenses.
The bankruptcy filing followed a preliminary injunction granted by U.S. District Judge Nina R. Morrison on September 11 in favor of General Petroleum GmbH, a German-based manufacturer of automotive, industrial, and marine lubricants. General Petroleum had filed a lawsuit against Stanley Oil on March 28, 2024, alleging trademark infringement, copyright infringement, unfair competition, deceptive trade practices, breach of contract, cybersquatting, and the trafficking of goods bearing counterfeit marks.
Despite productive settlement discussions between the parties, these negotiations ended when Stanley Oil replaced its counsel on June 12, prompting General Petroleum to seek a preliminary injunction on June 14. Judge Morrison ruled in favor of General Petroleum’s request, citing the company’s likelihood of success on the merits of its claims and the potential for irreparable harm.
Stanley Oil’s Chapter 11 bankruptcy filing has placed an automatic stay on any pending litigation as the case proceeds. The company’s bankruptcy attorney has not responded to requests for comments.
Stanley Oil markets a variety of products, including automobile, industrial, and marine lubricants; automotive grease; additives and chemicals; brake fluid and coolant; and base oil, under various brands such as Stanley, Syntrol, Prime, and Hexagen, according to the company’s website.
