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FORT WORTH, Texas -- FFP Operating Partners L.P. Thursday became the latest convenience store casualty, announcing it has filed a Chapter 11 petition with the U.S. Bankruptcy Court for the Northern District of Texas, Fort Worth Division.
FFP operates approximately 280 convenience stores and gas stations in the Southwest under brands including Kwik Pantry, Nu-Way, Economy Drive-In, Taylor Food Mart and Drivers.
Like many of its peers in similar situations -- chains that included former retailing powerhouses such as Dairy Mart Convenience Stores, Convenience USA and Swifty Serve -- FFP became saddled with too much securitized debt while the competitive environment in the industry intensified, constraining the company's liquidity.
Still, Robert Byrnes, the company's president and CEO, said FFP had been working with its lenders and suppliers to conduct a debt restructuring, which it had hoped to complete without a Chapter 11 filing. A solid fiscal strategy could not be worked out.
"We have a very good core business around which we are going to reorganize, and we had hoped to do so without having to involve our trade vendors," Byrnes said. "Unfortunately, after one of our lenders sued us, we came to realize that the result we need to achieve for our creditors, employees and our other valued stakeholders can best be realized with the supervision of the bankruptcy court."
Byrnes expects that FFP's store operations will continue with little or no disruption as a result of the filing. "We have a long history of mutually profitable relations with our trade, a strong management team and loyal employees in our stores," he said. "We'll pull through this and emerge as a good borrower, strong partner with our vendors and a place our employees are proud to work."
Except for stores the company was evaluating as closure candidates before the Chapter 11 filing, FFP does not anticipate any additional store closings.
FFP has reportedly struggled financially for some time and was the subject of an unsolicited buyout bid.
Last August, FFP Partners rejected a buyout offer from San Francisco-based Sutter Holding Co. Inc. FFP said the board of trustees of its general partner has analyzed the offer and determined not to pursue the transaction. It didn't provide a reason why the board rejected the offer.
Joseph Leonardo, a member of FFP's board of directors, has been elected the company's chairman and will assist in the reorganization process. In addition, FFP has retained The Spectrum Capital Group, an Albuquerque, N.M.-based financial advisory firm specializing in restructurings, to provide strategic and financial advice during the Chapter 11 process.