Appco Landlord May Evict Stores
GREENEVILLE, Tenn. -- Bankrupt 57-unit convenience chain Appalachian Oil Co. (Appco) could face eviction from more than half its stores after a motion was filed in U.S. Bankruptcy Court last week by the convenience retailer's biggest landlord, who also owned the chain until late 2007, the Kingsport Times News reported.
The lawyers for Management Properties Inc., which manages 33 Appco stores and other Appco properties for former owner Jim MacLean, filed in court for "relief from the automatic stay" that typically protects bankrupt companies from creditors, according to the report. The motion also asks for a guarantee that Appco and its parent company, Titan Global Holdings, can provide owed back rent to Management Properties since Appco’s Feb. 9, Chapter 11 bankruptcy filing.
The motion's April 8, hearing is one day after Appco’s final hearing on its "post-petition" financing, where its largest secured creditor, Greystone Business Capital, provided $500,000 in funds to pay salaries, utilities and other costs. The budget for that agreement called for Appco's payment of $150,000 from store proceeds to Management Properties for the week of March 16, but last week's motion claims Appco paid just half that amount March 20, and still owes $198,362 in "post-petition" rent and $162,854 in additional rent, according to the report. The motion applies only to rent due since Appco’s Chapter 11 filing.
"Our very strong preference is for Appco to pay their rent and continue on with their business plan," Jeff Benedict, president of Management Properties and the former CEO of Appco, told the Times News. "However, if that proves impossible, we need to be able to move to protect ourselves."
Unlike other creditors who can withhold goods during a Chapter 11 reorganization, landlords may have no alternative than to pursue lease termination to avoid increasing debts, he told the paper.
"The motions ask that the bankruptcy court either assure us that the rent will be paid or allow us to seek the return of the properties," Benedict said, adding there are roughly 30 related properties in addition to the 33 Appco convenience stores. "Unfortunately, there is a great deal of rent past due, as well as the 2008 property taxes on the properties, which under the leases Appco was obligated to pay."
He added: "Because the unpaid rent increases with every passing day, we need to be in a position to recover the properties if that becomes necessary."
Related News:
-- Appco Re-Stocks Stores Thanks to Refinancing
-- Appco's Unsecured Creditors Owed $7.2M
The lawyers for Management Properties Inc., which manages 33 Appco stores and other Appco properties for former owner Jim MacLean, filed in court for "relief from the automatic stay" that typically protects bankrupt companies from creditors, according to the report. The motion also asks for a guarantee that Appco and its parent company, Titan Global Holdings, can provide owed back rent to Management Properties since Appco’s Feb. 9, Chapter 11 bankruptcy filing.
The motion's April 8, hearing is one day after Appco’s final hearing on its "post-petition" financing, where its largest secured creditor, Greystone Business Capital, provided $500,000 in funds to pay salaries, utilities and other costs. The budget for that agreement called for Appco's payment of $150,000 from store proceeds to Management Properties for the week of March 16, but last week's motion claims Appco paid just half that amount March 20, and still owes $198,362 in "post-petition" rent and $162,854 in additional rent, according to the report. The motion applies only to rent due since Appco’s Chapter 11 filing.
"Our very strong preference is for Appco to pay their rent and continue on with their business plan," Jeff Benedict, president of Management Properties and the former CEO of Appco, told the Times News. "However, if that proves impossible, we need to be able to move to protect ourselves."
Unlike other creditors who can withhold goods during a Chapter 11 reorganization, landlords may have no alternative than to pursue lease termination to avoid increasing debts, he told the paper.
"The motions ask that the bankruptcy court either assure us that the rent will be paid or allow us to seek the return of the properties," Benedict said, adding there are roughly 30 related properties in addition to the 33 Appco convenience stores. "Unfortunately, there is a great deal of rent past due, as well as the 2008 property taxes on the properties, which under the leases Appco was obligated to pay."
He added: "Because the unpaid rent increases with every passing day, we need to be in a position to recover the properties if that becomes necessary."
Related News:
-- Appco Re-Stocks Stores Thanks to Refinancing
-- Appco's Unsecured Creditors Owed $7.2M