Mataya shuts down 7 gas stations

Copyright © 2009
Gallup Independent
By Gaye Brown de Alvarez
Staff writer

GALLUP — In January there were eight. In June there was one.

Mataya’s gas stations once dotted the landscape, then suddenly they were all shut down.

Not only were the gas stations and convenience stores closed down, the Indian Capital Distributing Co., the wholesale distributor of gasoline in the area since 1975, is a shell of its former self. The employees are gone and five empty tractor trailers sit on the lot.

“I had eight places,” owner Mike Mataya said in an interview Wednesday. “We filed for Chapter 11 bankruptcy on April 14 and then the bank called our credit line. Normally you have an opportunity to reorganize, but the bank convinced the judge we were not viable so we closed the doors.”

When asked about Indian Capitol Distributing, Mataya said there was a trustee appointed by the court who was there at the facility to make a decision whether or not to keep the fuel distributing business.

Ex-employee Joyce Rivera would not say anything about her former employer, she told the Independent. She no longer works at the facility. In fact, during their heyday, Mataya had 82 employees. When he shut the doors, he said, he had to lay off 23 people.

But Jim Sheppard of Gallup Flying Service was not too happy about Mataya’s bankruptcy.

“He owes us money,” Sheppard said in an interview Tuesday. “We never got a truck load of fuel. He sells us low-lead aviation fuel. We sell it for $4.95 a gallon. Two weeks before he closed the door, we were even. Now, he owes me a lot.” He wouldn’t say what was owed to him.

In his bankruptcy filing papers from the U.S. Bankruptcy Court, District of New Mexico, Indian Capital Distributing lists its creditor’s names; millions is owned to banks, including First Federal Bank of Gallup and millions more is owned to fuel distributors. An open account by the city of St. John’s lists a claim of $106,000.

But the biggest debtor is the state of New Mexico. Mataya owes the state $11.5 million in unpaid fuel taxes, according to the Chapter 11 papers.

“That’s a disputed amount,” Mataya said and added that was fuel distributed to the Navajo Nation and it was involved in a double taxation dispute. This had never happened before, he said. In 1999, the state came in and did an audit and it was determined that fuel sold on the reservation to independently-owned Native American stores should have had taxes paid to the tribe and the state.

When asked about double taxation, Rick Homans, the state’s cabinet secretary for Taxation and Revenue stated in an e-mail:

“The actual bankruptcy filing and the Department’s proof of claim are public documents from the courts (the POC we filed is attached showing the $14M claim by TRD).  No other information in our records would be considered public information that TRD could provide.” The state’s Original Proof of Claim for Prepetition Taxes states that Indian Capitol Distributing “still is indebted (or liable) to this claimant in the total sum of $14,002,527.25.

The taxation of fuel sold on Indian land has been a bone of contention for many states. Mataya said that the fuel he sold wasn’t even to any stations in the state of New Mexico, and information provided by the Taxation and Revenue Department shows the initial tax amount to be $8,776,617.09 with $5,227,683.23 listed as penalty and interest.

There is one Mataya station left.

“I’m still operating Mataya Travel Plaza on the west end of town,” Mataya said. “It’s on the south side of the street.

Because we’re on a cash collateral hold, we’re making an attempt to pay creditors personally.”