Sunday, July 12, 2009
Appco employees finally see light at the end of the tunnel
Source: NET News Service
The bids are in, and this week is number-crunching time for the real estate company leading the bankruptcy-driven sale of the Appco convenience store chain.
Despite the many challenges that have faced the company in the months before and since its Feb. 9 Chapter 11 filing, the man primarily responsible for Appco's sale hopes the 47 stores still in operation will be turning a profit for someone in the not-too-distant future.
"The sales procedures approved by the court require a closing within 30 days, so our expectation would be that by the middle of August a transition would take place with the new ownership," Appco Chief Restructuring Officer Andy Weber said Friday.
Weber, whom bankruptcy Judge Marsha Parsons appointed April 14 and tasked with preparing Appco for sale, works for NRC Realty Advisors, the Chicago-based company overseeing the bid and sale process. The bid deadline was Thursday, and Weber said "we hope to have a final selection by the end of next week (this Friday)."
The biggest questions at this point, Weber said, are whether the stores will stay with one company or be split among several, and just how much the sale will bring to help pay off Appco's nearly $20 million in pre-bankruptcy debts. Those debts include more than $11 million in "secured debt" to lender Greystone Business Credit, and more than $7 million in debt to dozens of unsecured creditors ranging from gasoline suppliers and landlords to Western Union and Pet Dairy.
"We know we have strategic and financial buyers who are proposing on the entire business," Weber said.
That "entire business" is a pared-down one compared to September 2007, when Dallas-based Titan Global Holdings bought the profitable and stable chain from longtime owner Jim MacLean in a leveraged buyout. At that time, Appco had about 55 stores in Northeast Tennessee, Southwest Virginia and Southeast Kentucky, and also supplied fuel to about 165 independent convenience stores.
MacLean retained ownership of some of the store buildings and property, while to decrease its debt load, Titan immediately sold the buildings and property it had obtained for $15 million (half the purchase price). This left the new Appco operating stores that were leased instead of owned.
That arrangement didn't cause Appco's problems, though, and in fact the current bidders are showing a willingness to buy stores that also will come with lease payments.
Titan, though, had difficulties with various other companies it owned, and Appco's