Hundreds of prepaid heating oil customers await Pettit bankruptcy word

By Paul Gottlieb
Peninsula Daily News

PORT TOWNSEND — Pettit Oil Co.’s Nov. 25 bankruptcy filing affected hundreds of prepaid heating oil customers, including homeowners on the North Olympic Peninsula.

They are among the 1,195 individuals, families and businesses from throughout the nation named as Pettit’s creditors in documents filed as of Friday at U.S. Bankruptcy Court in Tacoma.

Of the total, 87 creditors live in Clallam and Jefferson counties, from Neah Bay to Port Townsend.

The Lakewood-based company is in Chapter 7 proceedings after shutting its many doors for good Jan. 19.

According to Puget Sound Business Journal, Pettit was Washington state’s 33rd largest company in 2011 — and that was two years before buying Tacoma-based SC Fuels, the largest petroleum distributor on the West Coast.

Pettit distributed heating oil across 12 counties and ran distribution centers in Port Angeles, Port Townsend, Forks, Bremerton, Everett, Hoquiam and Lakewood.

In business for 75 years, the company employed about 200 people.

The Doyle Family Trust of Port Angeles, which leased property to Pettit, and William Hurt of Port Townsend, one of the company’s 10,000 mostly Western Washington customers, have filed claims to receive money they say is owed them.

The vast majority of creditors have not filed claims, which total $9.9 million and 142 claims as of late Friday afternoon, according to the claims register for the case.

Hurt filed a claim for $407 remaining on his and his wife, Candace’s, prepaid heating oil account.

“It’s something that set up back a little bit,” he said last week.

That $407 would cover a visit to their grandchildren or a month of their “allowance” for nonessentials, said Hurt, a retired oil field worker.

“It doesn’t put a big pinch on us, but it is kind of upsetting.

“I don’t like the idea of paying ahead, and we won’t do it again.

“You’re loaning them $900 for three or four months.”

Larry and Genelle Doyle, trustees of the Doyle Family Trust, have already leased land, a building and a bulk plant occupied by Pettit west of downtown Port Angeles to Aberdeen-based Masco Petroleum, which has aggressively pushed to fill the void left by Pettit’s departure.

Last summer, Pettit extended its lease to 2019 and now owes the couple $4,972 in back rent, according to their claim.

“Everything was going fine, Pettit still had several years on their lease, then all of a sudden, broadsided, bankruptcy,” Larry Doyle, a former Port Angeles mayor, said Friday.

“I don’t think Pettit will have enough assets to pay it back.”

Chris Sather, Pettit’s president when the Nov. 25 bankruptcy petition was filed, could not be reached for comment.

The company also does not have an attorney of record, according to bankruptcy court records.

A June 5 deadline has been set for creditors — including former Pettit Oil customers with prepaid oil accounts — to file proof-of claim forms available at

The court’s help-desk phone number is 253-882-3939.

In the past two months, Masco has signed up to 1,000 heating oil and card-lock-fuel customers in Clallam and Jefferson counties, owner Jim Mason said Friday.

One thing his company does not do is offer prepaid heating oil accounts.

“There’s no reason to have anyone prepay,” Mason said.

“The typical heating oil delivery is not that much money unless you have a huge tank.”

Mason said most owners of oil-heated homes buy 25-50 gallons at a time at roughly $3 a gallon, spending up to $150 to fill the tank.

Of Masco’s approximately 500 new heating-oil customers in Clallam and Jefferson counties, “the theme we hear is that they had prepaid accounts,” Mason said.

Those accounts ranged from about $300 to more than $1,000.

“We hear those stories every day up in Port Angeles or Port Townsend or here in Grays Harbor County,” Mason said.

“So often, it’s elderly people.

“It really is heartbreaking.”

Mason said the company has spent more than $6 million to buy and lease former Pettit properties, including purchase of a former Pettit site at 23 Seton Road in Port Townsend.

In addition, Masco has hired a dozen former Pettit Oil employees and purchased 10 fuel-delivery trucks for nearly $1 million, including two vehicles that were scheduled to arrive Friday to serve Jefferson County customers, Mason said.

“With the new trucks in and a bulk plant, we will begin serving that area much better than we have,” he said.

Bankruptcy proceedings are being coordinated by trustee and Seattle lawyer Kathryn Ellis and Ellis’ attorney, Deborah Crabbe of Seattle.

A former Pettit employee has been hired to compile a list of Pettit’s former home-heating oil customers, Crabbe said last week.

“We did that because when we went through the creditor mailing matrix, we realized hundreds if not thousands of people had not been notified of the bankruptcy filing,” she said.

“Most of those people who had not been notified are home heating oil customers.”

Crabbe predicted at least a year will pass before it’s known how much of Pettit’s liquidated assets will be disbursed to the company’s customers.

“It takes that period of time to liquidate the assets,” she said.

A bankruptcy court hearing is scheduled Thursday to consider selling a card-lock site in Elma to Masco.

The company’s Chapter 11 bankruptcy petition in November to reorganize for protection against creditors was followed by a Jan. 17 Chapter 7 petition, which seeks protection to allow company assets to be sold to pay debts.

In a court filing, then-company lawyer Brian Budsberg, the company’s former lawyer, said the company was “financially too weak to be profitable” after buying S.C. Fuels.

Pettit cited $18.7 million in assets and $22 million in liabilities in its Nov. 25 petition, with the largest secured creditors listed as KeyBank, owed $11.3 million, and U.S. Bank, owed $8.8 million.

Neither KeyBank nor U.S. Bank has filed claims, according to the claims register.


Senior Staff Writer Paul Gottlieb can be reached at 360-452-2345, ext. 5060, or at

Last modified: March 22. 2014 6:17PM
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