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COLD SPRING, Ky. -- The businesses of 70 AmeriStop convenience store franchisees is likely not to be decided until later this month, after the parent company, Petro Acquisitions Inc., completes the sale of its assets, which include primary leases on those 70 locations, the Cincinnati Enquirer reported.
A hearing held last week in U.S. Bankruptcy Court in Cincinnati failed to determine whether franchise agreements for the convenience stores could be terminated, and if the prime leases held by the parent company could be sold at auction to the highest bidder, free of any existing sublease agreements, the report stated.
However, prior to last week's hearing, franchisees and lenders agreed to a solution through the parent company's assigned trustee, Richard Nelson of Cohen, Todd, Kite & Stanford, according to the report. As a result, Nelson asked the court to delay a decision on the franchise agreements until Feb. 20, after the auction of the company's assets, which would allow the prime leases on the locations to be sold at auction on Feb. 14 and 15, the report stated.
Under the agreement, the prime leases will be offered at auction individually with an agreement by the highest bidder to adhere to the existing sublease terms, or individually with no agreement to adhere to existing sublease arrangements, but most adhere to the court's decision on Feb. 20, the report stated.
In addition, sites can also be auctioned in a package as part of an offering for the rights to the entire AmeriStop franchise.
"If we didn't make this agreement, we were going to have to make a choice to go all or nothing on a hearing this week," Marcia Andrew of the Cincinnati law firm Taft Stettinius & Hollister, who represents 63 of the franchisees, told the paper. "We think the way the trustee has broken out these options will give the franchisees the fairest chance to come through this auction and still be in possession of their stores."
Meanwhile, franchisees are working to be eligible for the auction, according to Lance Little, owner of several franchises in northern Kentucky. "For now, we're the ones running the stores to keep these prime leases alive, and we just hope that we either get our independence or have our stores connected to a good franchisor."