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BURNSVILLE, Minn. -- As a result of Twin Cities Stores Inc.'s Chapter 7 bankruptcy case, more than a dozen metro-area Oasis Market convenience stores and gas stations will be auctioned, the Minneapolis St. Paul Business Journal reported.
U.S. Bankruptcy Judge Dennis O'Brien ordered the auction last week of the 13 properties, which are closed, but excluded on-site car wash equipment owned by Shakopee-based Nu-Star Inc., according to the report. The stores to be sold are located in St. Paul, Eagan, Minnetonka, Hopkins, Burnsville, Robbinsdale, Brooklyn Park, New Brighton, Inver Grove Heights and Cannon Falls.
Carollton, Ga.-based Hagen Auction Co. Inc., operating as Hagen Realty Group, will sell the properties at auction in mid-November, with sales expected to close before the new year, the report stated. Attorney John Hedback, of the law firm Hedback, Arendt, Kohl & Carlson, who was appointed by the U.S. Bankruptcy Court to recover assets for Twin Cities' creditors.
"There are a couple of [stores] that are run down, but most of them have been operated in the last six months," Hedback said. "If that's what the buyers are going to do, they could open them up pretty quickly."
He added: "All of the stores are closed down, the warehouses have been vacated, there are no hard assets left besides what's in the stores [and] no inventory to speak of."
One store that would have been auctioned in St. Paul sold for $1.725 million July 30, to Semper Development, Hedback said. The company will replace that store with a Walgreens, according to city spokeswoman Janelle Tummel.
Twin Cities was strained by overexpansion in recent years and plagued by fuel and food shortages at its stores, the newspaper reported. Company Chairman Bruce Nelson estimated owing more than $13.2 million to Bank of America on the sites in a July court filing, the report stated. TCS also owed nearly $4 million in state gasoline taxes and at least $5.6 million to other creditors when it filed for bankruptcy.
Burnsville-based Twin Cities was founded by Nelson's RM Group Inc. in July 1994, the newspaper reported. Within two years, the company operated 72 Oasis Markets. The company made record profits in 1999 and 2000, and in 2001, RM Group and Twin Cities formed Twin Cities Avanti Stores (TCAS) to buy approximately 120 Minnesota, Wisconsin and South Dakota gas stations from Avanti Petroleum Inc., according to the report.
Those sites were "heavily leveraged," and out-state markets proved difficult to service and operate, according to court documents cited by the paper. TCAS filed for Chapter 11 bankruptcy in March 2003, later emerging in September 2004. However, the company was unprofitable despite selling assets, closing stores and cutting jobs.
More recently, gasoline supplier Marathon Petroleum Co. cut the companies off in 2009 when it couldn't pay for past deliveries. This caused store closures, while other stores remaining open suffered from "sporadic" gas availability and "minimal grocery and tobacco inventory," court documents stated.
TCS and TCAS owned or leased 61 retail locations as of June 30, 2009, when they filed for Chapter 11 in Minnesota's U.S. Bankruptcy Court. When the filing was submitted, 32 stores remained open. Independent dealers took over 25, while TCS and TCAS operated seven Oasis Market, Budget Mart, Happy Dan's and Food-n-Fuel stores. By June 30, 2010, both companies were in liquidation.
The founders and executives of TCS could not be reached by the newspaper, and the company's bankruptcy attorney, John Koneck of Minneapolis law firm Fredrikson & Byron, was unavailable for comment.
The 13 properties up for auction include (Store No., address, unpaid loan balance as of June 30, 2009):
• Store No. 541: 240 Blake Road N., Hopkins, $840,135.46
• Store No. 543: 4180 Lakeland Ave. N., Robbinsdale, $976,567.88
• Store No. 558: 5816 63rd Ave., Brooklyn Park, $904,762.76
• Store No. 559: 11 Silver Lake Road, New Brighton, $587,786.52
• Store No. 565: 6405 Minnetonka Blvd., Minnetonka, $303,637.59
• Store No. 575: 1301 Southview Blvd. S., St. Paul, $436,995.19
• Store No. 576: 3150 Dodd Road, Eagan, $1,371,506.67
• Store No. 578: 3240 57th St. E., Inver Grove Heights, $926,306.47
• Store No. 579: 1125 Main St. W., Cannon Falls, $509,827.25
• Store No. 582: 15114 Highway 7, Minnetonka, $560,092.29
• Store No. 600: 530 Blake Road N., Hopkins, $1,048,376.55
• Store No. 608: 1120 Seventh St. S., Hopkins, $433,916.35
• Store No. 619: 451 Burnsville Pkwy., Burnsville, $818,595.04