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By Mehgan Belanger
RICHMOND, Va. -- CSNews Online has learned that Zota Petroleums Corp., a dealer and operator of 13 convenience stores, purchased a 29-unit Rennie's convenience store chain from Rennie Petroleum, which filed for reorganization under federal bankruptcy laws in January 2007.
The stores went to auction on Oct. 2, through Matrix Capital Markets, and Zota Petroleums was the highest bidder for the stores, Shashi Zota, of Zota Petroleums, told CSNews Online. The deal was completed on Jan. 4, 2008, he said.
"There were a lot of big companies going after these stores," said Zota. "We are fortunate to get this company."
Zota, who was also a dealer for Rennie Petroleum for four years, had purchased two properties from Rennie three years ago, and was a dealer to four others for the past three years, he told CSNews Online.
"I was in the same business doing the same things. I know how to run the business profitably," he said. "I've been in this business for a long time. I've been in [convenience] retail for the past 20 years. Everyone knows me in the market, so when something comes up, I always get the first look."
The former Rennie Petroleum employees will remain with the stores, according to Zota. "We are going to keep everything as it is. We are not going to change anything," he said. Six of the stores were company-operated, 11 units had their gas provided by Rennie and the remainder were dealers, he said.
Zota plans to grow his business, and is currently working on a few deals, he told CSNews Online.
Rennie Petroleum began in 1985 with a single service station, and reached its peak in the mid-1990s with 40 locations, CSNews Online reported in January 2007.
During the reorganization process, the company listed assets of $4.67 million and liabilities of $7.98 million, which included $3.76 million in unsecured, nongovernmental claims. The company's largest unsecured creditor was CITGO Petroleum Corp. of Tulsa, Okla., with a $3.3 million claim.
Owner Donald J. Rennie told the Times-Dispatch in January 2007 that he regretted having to file for bankruptcy protection. "We are optimistic that we will succeed and emerge from Chapter 11 as soon as possible," he said, adding that the business will continue to operate as usual, and has no plans to close stores.
In the bankruptcy filing, the company stated the business suffered when major oil companies began selling gasoline to their own stations cheaper than they sold it to wholesale purchasers in the beginning of the decade. To remain competitive, Rennie lost 15 cents a gallon on sales and laid off staff, subleased stores and cut expenses, according to the report.
"The economics of the retail petroleum industry generally and this company specifically have changed in recent years," David K. Spiro, attorney for Rennie Petroleum, told the Times-Dispatch in January. "The goal is to adjust to those changes, return to profitability and develop a plan, which will keep the company in business while generating the highest return to the company's creditors."