Bidders line up to take over assets of longtime Naples distributor Evans Oil

Bloomberg reported that Evans Oil transported more than 50 million gallons of product and generated $3.5 million in earnings before interest, taxes, depreciation and amortization in 2010.

— At least three bidders have emerged for the assets of a Naples-based oil company.

Last year, Evans Oil Co. LLC, a local petroleum distributor, filed for Chapter 11 bankruptcy protection in federal court in Fort Myers. There's a squabble about which bidder should be chosen as the one allowed to make the first bid – and the one to beat.

Established in 1959, the company, with its headquarters off Horseshoe Drive South, distributes bulk oil, gas, diesel and other petroleum products. It's a major distributor for Chevron.

At a court hearing this week in Fort Myers, Daniel DeMarco, the Ohio attorney representing Evans Oil, said his client believes Florida Petroleum would have the higher and better offer and that it should be the one to set the bar for the competition.

But Fifth Third Bank, which spurred the bankruptcy filing, has another first bidder in mind: Atlas Oil Co., headquartered in Michigan.

The two offers are quite different, DeMarco said, because the one supported by Evans Oil would be an all-cash deal while the other introduced by Fifth Third would be heavily financed by the bank, to its own benefit.

Alan Statman, an Ohio attorney representing Fifth Third, argued the cash offer is a financed offer, too, as "people are lending them money."

Evans Oil, with its headquarters off Horseshoe Drive South, is searching for a new lender as Fifth Third Bank looks to aggressively collect more than $35.1 million in debt.

It appears the two offers could be several million dollars apart, but they've not been made public in court records. In federal court, there were talks of offers potentially valued at $14 million to $25 million.

Another interested bidder is Avfuel, a fuel distributor in the Midwest, whose Fort Lauderdale attorney, Alan Perlman, came to the court hearing Thursday.

"They are very interested. They are very sophisticated and they are properly capitalized to expand. We are just not sure what the requirements are going to be to bid," he said.

The opposing sides in the case said they'd be comfortable with the judge choosing the lead bidder. The bankruptcy judge, Barry Schermer, said he would schedule a hearing in Tampa for July 27 to make the decision.

The two sides also have been unable to agree on the bid procedures for the auction of the assets. That, too, is scheduled to be taken up at next week's hearing.

It appears the two offers could be several million dollars apart, but they've not been made public in court records. In federal court, there were talks of offers potentially valued at $14 million to $25 million.

The auction is slated for Aug. 9 and Evans Oil hopes to have its plan for reorganization confirmed by Sept. 13. The winning bidder at the auction would be the plan sponsor and would become the new owner of the company.

The reorganization plan will be a collaborative effort between the debtor and the sponsor, Perlman explained.

"It's not a shut-down," he said. "It's going to be a sale as a going concern and the ultimate contract that is approved by the court will form the basis of the plan and that plan, once confirmed, will create the emergence of the new enterprise from bankruptcy."

It's too soon to say what will become of the local company and its employees, including management. The company had about 70 employees at the time of the bankruptcy filing.

At the time of the filing, Evans Oil had more than 100 creditors.The company ran into trouble after Fifth Third unexpectedly looked to aggressively collect more than $35.1 million in debt. Evans Oil has been a profitable enterprise.

"I think the bank understands they won't be made whole under any sale," Perlman said.

__ Connect with Laura Layden at www.naplesnews.com/staff/laura_layden

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