Several major companies in the automotive industry faced financial struggles leading to Chapter 11 bankruptcy filings this year.
Electric vehicle manufacturer Fisker Group, based in Manhattan Beach, California, filed for Chapter 11 protection on June 18. The company attributed its financial difficulties to various market and macroeconomic challenges.
The auto parts industry has not been spared, with 20 German EV auto parts manufacturers filing for bankruptcy in the first half of 2024. In the United States, Wheel Pros, operating as an auto parts distributor and retailer under the Hoonigan brand, filed for a prepackaged Chapter 11 bankruptcy on September 9. This filing aims to eliminate $1.2 billion in debt and provide approximately $570 million in new capital through an exit facility. This followed the December 2023 Chapter 11 filing by PartsID, an e-commerce auto parts retailer.
Additionally, Stanley Oil & Lubricants, a distressed 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 followed a U.S. District Court judge granting one of Stanley’s suppliers a preliminary injunction in a trademark and copyright infringement lawsuit, which froze certain assets and halted some business activities. Stanley Oil listed up to $50,000 in assets and between $1 million to $10 million in debts in its petition, indicating that no funds would be available to pay unsecured creditors after administrative expenses.
The bankruptcy filing by Stanley Oil came after U.S. District Judge Nina R. Morrison granted a preliminary injunction to General Petroleum GmbH, a Germany-based manufacturer of lubricants. The injunction prohibited Stanley Oil from manufacturing, importing, distributing, and selling any products using General Petroleum’s trademarks or confusingly similar marks and froze assets related to the alleged illegal activities.
The dispute between Stanley Oil and General Petroleum began in August 2019 when Stanley Oil started purchasing petroleum products from General Petroleum to sell in the United States. This agreement led to a five-year conflict over trademarks, copyrights, and other business dealings. General Petroleum filed a lawsuit on March 28, 2024, alleging multiple claims, including trademark and copyright infringement and deceptive trade practices.
Settlement discussions occurred for several weeks but ended around June 12 after Stanley Oil replaced its counsel. Subsequently, General Petroleum sought a preliminary injunction on June 14. Judge Morrison ruled in favor of General Petroleum, noting a likelihood of success on the merits of their claims, including trademark infringement and trafficking in counterfeit goods.
Stanley Oil’s Chapter 11 bankruptcy filing imposes an automatic stay on any pending litigation. The company markets a range of lubricants and automotive products under various brands, as noted on its website.
Stanley Oil’s bankruptcy attorney did not immediately respond to requests for comment.
