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According to a news release issued by Getty Realty, the U.S. Bankruptcy Court, Southern District of New York, issued an order yesterday for GPMI to pay Getty Realty $3 million by Jan. 17 and another $9 million on Feb. 5. The court ruled that GPMI owes that amount in unpaid December 2011 and January 2012 rent per its master lease with Getty Realty.
"We welcome the decision of the bankruptcy court requiring [GPMI] to comply with its post-bankruptcy obligations under the master lease," David B. Driscoll, president and CEO of Getty Realty, said this morning. "The company intends to continue to protect its interests with respect to the master lease and pursue all other rights and remedies available to it as appropriate. We remain confident of the long-term value in the portfolio subject to the master lease and [are] optimistic about the future of our company."
Under the master lease, GPMI must pay about $4.9 million in monthly rent, and it is also responsible for payments of taxes, maintenance, repair, insurance, environmental and other operating expenses, explained Getty Realty, which served its largest tenant -- operating about 800 of its stores -- with a formal notice of eviction and termination of the master lease due to non-payment and late payment of rent.
GPMI has long argued that Getty Realty "failed to perform environmental remediation," and it could therefore offset the costs for such remediation against its monthly rent. Getty Realty, meanwhile, has fired back by saying the claims are "completely without merit."
GPMI sub-leases many of its locations under the master lease to independent convenience store owners. In a CSNews Online exclusive story appearing on Dec. 6, c-store owners said questions remained about the future of their stores following GPMI's bankruptcy declaration.
"We're confused about what's going on," Joel Silver, owner of 331 West Avenue Gas Station LLC, which leases one of the few Getty-branded c-store/gas stations in Connecticut, told CSNews Online then. "I've heard a lot of rumors such as having a conference call among all of the Connecticut [GPMI] retailers to discuss what's going on. Then, I heard that all the stations will operate as normal. The worse scenario I heard is that we can be evicted. That is a possibility, but you'd think it wouldn't benefit anybody if that happened."
But GPMI Chief Executive Bjorn Aaserod, in an exclusive interview with CSNews Online, said the company's independent c-store owners can expect no changes at their stores in the future. "I think it's fair to say the person who operates the convenience store or gas station should experience business as usual," he said.
Aaserod also added that the bankruptcy court was allowing GPMI to pay commissions to gas station owners, even those earned prior to the bankruptcy filing.
Getty Realty is the largest publicly-traded real estate investment trust. It owns and operates about 1,155 c-stores and gas stations, primarily located in the Northeast.