SANTA ANA, Calif. — EZ Lube, the largest privately held oil change company in California, has entered into an asset purchase agreement with EZ Lube Acquisition Company LLC, an affiliate of its existing lenders, on the sale of substantially all of its assets.
In accordance with the terms of this agreement and to facilitate the sale transaction, EZ Lube LLC and its affiliate Xpress Lube-Tech filed voluntary petitions for reorganization under Chapter 11 of the bankruptcy code. The proposed transaction, which is subject to approval by the bankruptcy court, contemplates, among other things, the assumption of certain liabilities by the buyer, subject to closing of the proposed transaction. Subject to court approval, qualifying bidders will have an opportunity to submit higher and better offers through a court-supervised competitive bidding process.
“Today’s actions represent positive news for our customers, employees and other constituents,” said President and Chief Executive Officer Marc Graham. “Completing the sale through the Chapter 11 process will allow us to significantly reduce our debt and undertake an orderly transition of ownership. Throughout the sale process, servicing our customers and providing valuable preventative maintenance services is our priority.”
In order to provide uninterrupted operations at its 82 locations and ensure that its vendor relationships remain intact, the company has obtained a commitment for debtor-in-possession (DIP) financing from its current senior lender Goldman Sachs Specialty Lending Group, L.P. Subject to the Bankruptcy Court’s approval of this DIP financing commitment, these funds will be used to fund operations and other costs during the sale process and Chapter 11 cases.
Graham emphasized that neither employees nor customers of its 82 oil change stores are expected to notice any difference in operations as a result of the filing.
“Daily operations will continue as usual, store hours will remain the same and all aspects of the business will proceed as usual,” he said. The company has requested the court’s permission to continue to honor gift certificates and coupons as well as warranties and VIP program.
“Looking ahead, we believe the action begun today will result in a more competitive future for EZ Lube,” said Graham.
The company filed its voluntary petitions in the U.S. Bankruptcy Court for the District of Delaware in Wilmington.