Yonkers-based Petroleum Kings files for bankruptcy

Written on: February 13, 2017 by ICM

By Bill Heltzel, Westfair Online
A Yonkers fuel oil company that is fighting lawsuits with its supplier has filed for bankruptcy.
Petroleum Kings LLC filed for Chapter 11 reorganization on Feb. 2, four days before a trial was scheduled to begin in state Supreme Court in White Plains.
The company claims assets between $500,000 and $1 million but only $47,000 in liabilities. It is disputing claims by United Metro Energy Corp., a fuel oil supplier in Brooklyn.
Petroleum Kings is owned by Asmel Gonzalez of White Plains, and sells petroleum products to homes and businesses in the Bronx and Westchester County.
In 2014, United notified Petroleum Kings that it was blaming the company for missing fuel oil. United sued Gonzalez in federal court in Brooklyn. A federal judge dismissed the case on a jurisdictional issue but noted that Gonzalez may have committed perjury and insurance fraud.
In 2015, Petroleum Kings sued United Metro Energy in state Supreme Court in White Plains. United Metro Energy had won state contracts to supply diesel and heating oil to school districts and municipalities in the region. Petroleum Kings claimed it was not fully compensated for its role as a minority-owned business subcontractor entitled to 5 percent of the revenues. It claimed it was owed $5.1 million.
United countersued, claiming that Petroleum Kings had secretly siphoned more than 600,000 gallons of fuel oil worth $2.5 million.
After filing for bankruptcy court protection, Petroleum Kings filed motions to have the Supreme Court cases moved to federal bankruptcy court in White Plains.
Petroleum Kings believes it would have prevailed in the Supreme Court cases, attorney Anne Penachio wrote in the notice of removal, but a protracted trial would have hurt business. Litigating all of the issues in a single forum would streamline the process of resolving claims, she said, and enable the company to emerge more quickly from bankruptcy protection.
United Metro Energy’s attorney Robert T. Schmidt responded by asking bankruptcy court for a status conference at its earliest convenience.
Article courtesy of Westfair Communications