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COLD SPRING, Ky. -- Petro Acquisitions Inc., the parent company of the Ameristop convenience store chain, has prepared to file for Chapter 11 bankruptcy before the end of the month, the company's lawyer told the Cincinnati Enquirer.
Petro Acquisitions, which is a parent to Ohio Valley AFM -- operator of the 140 convenience stores in Ohio, Kentucky and Indiana -- was expected to file an order late Monday providing the schedule for Chapter 11 proceedings with Hamilton County Common Pleas Court Judge William Mallory, said James Frooman, lawyer from the firm Frost Brown Todd for Petro Acquisitions, in the newspaper report.
"I'm not sure what the final agreed upon dates were [for the filing]," he said. "It should certainly be within the next week to 10 days, I believe."
Ameristop has been plagued with negative events since early September, when CSNews Online was the first to report the chain was suffering from two separate problems that had caught the eye of local media. A number of Ameristop franchise locations saw gas deliveries from the parent company stop because those operators had not yet signed lease agreements and were not making deposits, Ray Lynch, buyer for Ameristop, told CSNews Online at the time.
In addition, a separate issue over contracts with Coca-Cola was also plaguing the chain, which saw Coke products disappear from the shelves. As a result, 25 franchisees representing 44 stores are suing the chain, the Enquirer reported.
An "informal agreement" was reached that allowed franchisees to use store cash to pay for deliveries as they arrive so the stores can stay stocked and open, Marcia Andrew, the lawyer representing the franchisees, told the paper.
Later that month, CSNews Online reported Hamilton County Common Pleas Court Judge William Mallory appointed a third-party receiver to handle the Ameristop convenience chain's affairs, after the company's president, Don Bloom, resigned from his post.
The move was a result of a lawsuit filed by Walnut Investment Partners, a Cincinnati-based venture capital fund that owns 45 percent of Petro Acquisitions. The suit claimed Petro Acquisitions failed to pay their share of an investment deal.
In May 2004, Walnut and Petro Acquisitions agreed to a stock buyback deal where the convenience company would buy stock from the firm over four years, totaling 450 preferred shares for $8.75 million. As part of the agreement, Walnut had the right to sell Petro Acquisition stocks if payment was not made. The suit claims that Petro Acquisitions breached the contract when it failed to pay $2.5 million to Walnut, and as a result, Walnut entered negotiations with Hyde Park, Ohio-based Gilligan Oil Co., to buy its stock.
Shortly after, CSNews Online reported Gilligan Oil, operator of more than 40 convenience stores, was no longer held to its contract to acquire a stake in the Ameristop convenience store chain.
This was not the only lawsuit the company faced. A lawsuit in Butler County Common Pleas Court alleged that Petro Acquisitions owed KeyBank $500,000 -- a loan it took out for Liberty Distributing Co. -- which it failed to pay.