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Wednesday, June 10, 2009

Appco chain clears last hurdle to sale

Source: Times News
By Jeff Keeling

GREENEVILLE - The Appco convenience store chain cleared its last hurdle to a sale in bankruptcy court Wednesday, drawing praise from every party except the holding company that had steered it into insolvency in the first place.

Judge Marsha Parsons unequivocally approved a "compromise and settlement" that could save 300-plus jobs, maximize payment to creditors, and make it easier for Appco Chief Restructuring Officer (CRO) Andy Weber to market Appco's 47 remaining stores.

While everyone from Appco's landlords and its lender to creditors gave something up in the deal, only Titan Global Holdings - which bought Appco from longtime owner Jim MacLean in a September 2007 leveraged buyout - objected to the settlement.

Parsons, though, rejected Titan attorney Gene Humphreys' argument that a technicality involving "leasehold mortgages" and lender Greystone Business Credit needed to be pursued further in court. Appco filed for Chapter 11 bankruptcy protection Feb. 9.

"The delay is not in the best interest of the estate," Parsons said. "The only way this case can produce any money is through a sale. Frankly, Titan hasn't offered a ëPlan B' if this settlement doesn't take place."

David Marks, Titan's chairman, attended the hearing but didn't speak and instructed Humphreys at the end of the hearing to withdraw a motion for a separate trustee to oversee the sale. That motion had been based on a contention Weber is too closely linked to Greystone and hadn't adequately researched possible claims against the lender.

"I don't remember Titan objecting when Mr. Weber was appointed," Parsons said. "I have to question why Titan is coming in on the eve of this sale and raising things that should have been raised earlier."

The hearing could mark the end of the line for Titan's involvement with Appco, which diminished greatly when Weber was appointed CRO on April 14. Since early 2008, the Dallas-based company has seen each of the handful of companies it controlled fall into Chapter 11 bankruptcy or outright liquidation, and seen its share price drop from the 40 to 50 cent range to below a penny.

Much of Wednesday's hearing was spent with Weber on the stand, explaining the work he's done to prepare Appco for sale, including firing Titan CEO Bryan Chance in early May.

"I didn't see any value (in keeping Chance)," Weber said. "He was in Dallas. He never made it up here to discuss with me what was best for the debtor. And apparently he was working another case in Kansas (the b