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COLD SPRING, Ky. -- A judge yesterday appointed a third-party receiver to handle the Ameristop convenience chain's affairs, following the resignation of the company's president, Don Bloom, last week, reported the Cincinnati Enquirer.
Walnut Investment Partners, a Cincinnati-based venture capital fund is suing Ameristop, which is operated by Ohio Valley AFM, a subsidiary to Petro Acquisitions Inc., for failure to pay in an investment deal, the report stated. Walnut holds a 45 percent stake in Petro, according to the report.
"The cooperation is still there, we'll jointly be seeking a receiver," Walnut's lawyer, Joseph Callow Jr., told the paper. "Mr. Bloom owes Walnut money. We're still trying to work it out, but the short-term solution is a temporary receiver."
In May 2004, Walnut and Petro agreed that the convenience company would buy back stock from the venture capital firm, the report stated. Over four years, Petro would buy back 450 preferred shares for $8.75 million, according to the report.
As part of the agreement, Walnut held the right to sell Petro's stocks if payment was not made. The lawsuit claims that last June, Petro breached the contract when it failed to pay $2.5 million to Walnut, which prompted the lawsuit. As a result, Walnut entered negotiations with Hyde Park, Ohio-based Gilligan Oil Co., to buy its shares, the report stated, citing the lawsuit.
The firm had settled a lawsuit against Petro, according to the report. However, Callow told the paper the recent departure of Bloom necessitated the receiver request, which was granted by Hamilton County Common Pleas Court Judge William Mallory, the report stated.
The lawsuit alleges Bloom told Gilligan Oil that Walnut does not have authority to negotiate and make a sale of the shares, according to the report. After three hearings, Mallory ordered that Walnut can continue the sale of Petro shares to Gilligan Oil and Petro can continue to sell its shares to other companies, but that Walnut has the right to approve the transaction, the report stated.
However, it's not the only legal battle the company is facing. A lawsuit in Butler County Common Pleas Court alleges that parent company Petro owes KeyBank $500,000, a loan it took out for Liberty Distributing Co., which it failed to pay. That lawsuit is pending, the report stated.
A call to Ohio Valley AFM for comment was not returned by press time.
In addition, Ohio Valley AFM Inc., operator of the 140-store AmeriStop superette and convenience chain, has other problems relating to contracts with its franchisees, CSNews Online reported last week.
At a few franchise locations, including the AmeriStop in Wilder, Ky., the company stopped deliveries of gas because those franchisees have not signed lease agreements, Ray Lynch, buyer for AmeriStop, told CSNews Online at the time.
"We own the gas equipment, and we have a dispute between a few stores, so we withheld gas from them. It's just a dispute issue," he said, clarifying previously published local reports that stated the company was not paying its vendors or creditors.