Several key players in the automotive industry have declared Chapter 11 bankruptcy this year due to financial challenges.
Fisker Group, an electric vehicle manufacturer based in Manhattan Beach, California, filed for Chapter 11 protection on June 18. The company attributed its financial difficulties to various market and macroeconomic headwinds.
The auto parts sector has faced significant global challenges, particularly in Germany, where 20 electric vehicle auto parts manufacturers declared bankruptcy in the first half of 2024.
In the United States, Wheel Pros, operating as auto parts distributor and retailer Hoonigan, filed for a prepackaged Chapter 11 bankruptcy on September 9. This restructuring aims to eliminate $1.2 billion in debt and secure approximately $570 million in new capital through an exit facility. Wheel Pros’ filing follows the December 2023 Chapter 11 declaration by PartsID, an e-commerce auto parts retailer.
Additionally, Stanley Oil & Lubricants, a company dealing in petroleum products, sought Chapter 11 protection in the U.S. Bankruptcy Court for the Eastern District of New York on September 17. This filing followed a preliminary injunction granted by a U.S. District Court judge in favor of one of Stanley’s suppliers, leading to asset freezes and halting certain business activities. Stanley Oil reported between $1 million and $10 million in debts and up to $50,000 in assets, with no funds expected to be available for unsecured creditors after administrative expenses.
Judge Nina R. Morrison of the U.S. District Court for the Eastern District of New York granted a preliminary injunction to General Petroleum GmbH, a Frankfurt-based manufacturer of automotive, industrial, and marine lubricants, on September 11. The injunction prohibited Stanley Oil from manufacturing, importing, or selling products using General Petroleum’s trademarks or similar marks, and froze relevant assets.
Stanley Oil began its business relationship with General Petroleum in August 2019 by purchasing petroleum products to sell in the United States. This partnership eventually led to a five-year dispute over trademarks, copyrights, and business dealings. General Petroleum filed a lawsuit on March 28, 2024, against Stanley Oil, alleging trademark and copyright infringement, unfair competition, deceptive trade practices, and other claims.
Settlement discussions between the parties occurred but ceased on June 14,after the demise of the debtor’s counsel, and General Petroleum sought a preliminary injunction, which Judge Morrison later granted on all issues. She found General Petroleum demonstrated a likelihood of success on the merits of its claims, including trademark infringement, unfair competition, and trafficking in counterfeit goods.
Stanley Oil’s Chapter 11 filing instigates an automatic stay on pending litigation. The company markets various lubricants and related products under the brands Stanley, Syntrol, Prime, and Hexagen.
Stanley Oil’s bankruptcy attorney did not immediately respond to requests for comment.