APPCO Stores to Remain Repossessed
GREENEVILLE, Tenn. -- A bankruptcy court judge here ruled last week that the main landlord and former owner of a dozen APPCO convenience stores may keep the locations, which it repossessed from the operator, Sunshine Energy, earlier this month, the Johnson City Press reported.
The ruling is the first by federal bankruptcy judge Marcia Parsons, who is overseeing Sunshine Energy's Chapter 11 filing. This is the second time in less than two years that the APPCO convenience store chain was involved in bankruptcy proceedings. Sunshine Energy bought the chain through a bankruptcy auction in September 2009 from Titan Global Holdings, which filed Chapter 11 in February 2009.
A representative from APPCO's landlord, Management Properties Inc. (MPI), said the company will work to gain possession of the other 16 stores it owns and try to lease them to another company, according to the report.
"Our plan is to regain possession of the stores and bring to them a new tenant who is qualified to operate convenience stores and has the financial resources to operate them successfully," Jeff Benedict, APPCO's former CEO and the president of MPI, told the paper.
MPI is landlord to 28 APPCO stores owned by Sunshine Energy, and terminated leases with Sunshine Energy in March after months of trying to get Sunshine to pay rent, back property taxes and carry out certain repairs and maintenance, the report stated. The company gained default judgments on 22 of those convenience stores in May, and had repossessed and closed 12 of them. Sunshine Energy later filed Chapter 11 bankruptcy June 10, giving it an "automatic stay" preventing further repossessions.
Sunshine Energy also filed a request to have nine of the 12 closed stores returned to it, which Parsons denied with this ruling.
Sunshine Energy attorney Mark Dessauer argued the lease terminations were invalid, maintenance requirements weren't specific enough and Sunshine was misled into believing MPI wasn't planning to begin closing stores, the Press reported.
Benedict testified he sent multiple letters to Sunshine Energy between January and March, and warned that significant maintenance issues existed that were Sunshine Energy's responsibility. He also described a May 4 phone call to Sunshine Energy's attorney Roger Dade, informing him of May 6 hearings over the repossession of the properties.
"The conduct by the debtors demonstrated a willful disregard of the state court proceedings," Parsons said in her opinion.
Parsons also sided with the landlords in the matter of Sunshine Energy's failure to perform maintenance and repairs as required by their leases.
The future of the APPCO convenience chain is still uncertain. If MPI were to repossess all 28 of its properties, 19 would still remain, according to the report.
MPI also filed a motion to have the bankruptcy itself dismissed, claiming it was a method to prevent further property repossessions. This motion will be heard July 12, but other motions attempting to allow for repossession through a "relief from stay," despite the ongoing bankruptcy proceedings, could be filed prior to the hearing next month.
Dessauer, who filed a motion for "debtor in possession" financing for Sunshine Energy, told the paper he would consult with Sunshine Energy to see whether or not it wanted to pursue that option.
Related News:
Bankrupt Sunshine Energy Wants APPCO Stores Back
APPCO's Sunshine Runs Out
The ruling is the first by federal bankruptcy judge Marcia Parsons, who is overseeing Sunshine Energy's Chapter 11 filing. This is the second time in less than two years that the APPCO convenience store chain was involved in bankruptcy proceedings. Sunshine Energy bought the chain through a bankruptcy auction in September 2009 from Titan Global Holdings, which filed Chapter 11 in February 2009.
A representative from APPCO's landlord, Management Properties Inc. (MPI), said the company will work to gain possession of the other 16 stores it owns and try to lease them to another company, according to the report.
"Our plan is to regain possession of the stores and bring to them a new tenant who is qualified to operate convenience stores and has the financial resources to operate them successfully," Jeff Benedict, APPCO's former CEO and the president of MPI, told the paper.
MPI is landlord to 28 APPCO stores owned by Sunshine Energy, and terminated leases with Sunshine Energy in March after months of trying to get Sunshine to pay rent, back property taxes and carry out certain repairs and maintenance, the report stated. The company gained default judgments on 22 of those convenience stores in May, and had repossessed and closed 12 of them. Sunshine Energy later filed Chapter 11 bankruptcy June 10, giving it an "automatic stay" preventing further repossessions.
Sunshine Energy also filed a request to have nine of the 12 closed stores returned to it, which Parsons denied with this ruling.
Sunshine Energy attorney Mark Dessauer argued the lease terminations were invalid, maintenance requirements weren't specific enough and Sunshine was misled into believing MPI wasn't planning to begin closing stores, the Press reported.
Benedict testified he sent multiple letters to Sunshine Energy between January and March, and warned that significant maintenance issues existed that were Sunshine Energy's responsibility. He also described a May 4 phone call to Sunshine Energy's attorney Roger Dade, informing him of May 6 hearings over the repossession of the properties.
"The conduct by the debtors demonstrated a willful disregard of the state court proceedings," Parsons said in her opinion.
Parsons also sided with the landlords in the matter of Sunshine Energy's failure to perform maintenance and repairs as required by their leases.
The future of the APPCO convenience chain is still uncertain. If MPI were to repossess all 28 of its properties, 19 would still remain, according to the report.
MPI also filed a motion to have the bankruptcy itself dismissed, claiming it was a method to prevent further property repossessions. This motion will be heard July 12, but other motions attempting to allow for repossession through a "relief from stay," despite the ongoing bankruptcy proceedings, could be filed prior to the hearing next month.
Dessauer, who filed a motion for "debtor in possession" financing for Sunshine Energy, told the paper he would consult with Sunshine Energy to see whether or not it wanted to pursue that option.
Related News:
Bankrupt Sunshine Energy Wants APPCO Stores Back
APPCO's Sunshine Runs Out