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TULSA, Okla. -- Five months after the company filed for Chapter 11 bankruptcy protection, Git-N-Go's assets are on the auction block, reported the Springfield, Mo.-based News Leader.
Tuesday in Tulsa, Kum & Go and Sinclair Oil Corp. will bid for ownership of the Tulsa-based convenience store chain. The bid will start at $6.8 million plus an estimated $4 million for inventory.
Until 10 days ago, only Kum & Go had expressed interest in Git-N-Go's 76 stores in Oklahoma and Missouri. But Sinclair Oil entered the picture by bankruptcy court permission after the official deadline for competing bids had passed. This development bodes well for Git-N-Go's creditors but dismayed Kum & Go.
"We remain shell-shocked, put it that way," said James Brandt, general counsel for West Des Moines, Iowa-based Kum & Go. "We're not quite sure how to respond to what has transpired."
The company has filed several objections to Sinclair Oil's entrance into the bidding. "Kum & Go asserts that it remains the only 'Qualified Bidder,'" the company wrote in a June 10 objection filed with the U.S. Bankruptcy Court for the northern district of Oklahoma.
The dispute started in early June when Sinclair Oil suddenly expressed interest in the Git-N-Go properties, 36 of which are in southwest Missouri.
"We came in at the 12th hour, really," said Larry Rogers, Sinclair Oil's general manager of retail marketing. "We took a good, hard look and saw the potential ... and decided that it was a good strategic fit."
The Git-N-Go properties made particular sense to Sinclair Oil because the company owns a Tulsa refinery but no convenience stores in Tulsa or Springfield, Rogers said. The only problem was that Sinclair Oil's decision on the properties fell after the bankruptcy court's deadline for competing bids.
But Sinclair's offer of $6.8 million was significantly higher than Kum & Go's $6.2 million offer, even taking into account Kum & Go's negotiated "breakup" fee of $300,000 should the property go to another party. In addition, Sinclair Oil agreed to buy more of the company's assets and inventory than Kum & Go.
Taking these factors into consideration, the creditors' committee asked the court for an extension on the bid deadline. "The enhanced value that would be represented by the Sinclair bid brings into question whether the Kum & Go bid will offer a fair value for the debtor's assets," said John Leininger, the attorney for the creditors' committee, in a June 10 court petition. The court granted the extension.