Wednesday, April 15, 2009
Appco convenience store chain to be put up for sale
Source: TimesNewsNetBy Jeff Keeling
GREENEVILLE - The bankrupt Appco convenience store chain is going up for sale, and a brand-new boss is coming in to make the company as attractive to a buyer as possible.
"Welcome and good luck, Mr. Weber," federal bankruptcy Judge Marsha Parsons said Tuesday upon the introduction of Andy Weber, who will act as Appco's "chief restructuring officer" beginning imm e d i a t e l y.
"Thank you," Weber responded. "I've got my work cut out."
Tuesday's agreement, formalized in a court order, involved an admission by Titan Global Holdings - a Richardson, Texas, company that borrowed $30 million to buy Appco from longtime owner Jim MacLean in September 2007 - that it didn't have the resources to get the company back on its feet. Appco's 58 stores in Tennessee, Virginia and Kentucky began showing financial strain around Christmas and, after weeks without gas or many other essentials, Appco filed Chapter 11 on Feb. 9.
Nearly six weeks later, Titan CEO Bryan Chance and Appco got enough financing to get gas and groceries back in the stores. In the past couple weeks, however, Appco's landlords (including MacLean, who still owns more than 25 store properties) filed motions that would allow them to evict Appco for non-payment of rent that came due after the bankruptcy. (Pre-petition debts are protected during bankruptcy proceedings.)
In a hearing last week, the lawyer for Appco's main lender, Greystone Business Credit, said Appco wasn't coming anywhere close to meeting its budgeted revenues, had no chance of returning to viability under Titan, and ought to be sold.
Tuesday's order confirms that Appco "has insufficient cash to obtain and pay for reasonable amounts of inventory and costs of administration, including payroll, absent the funding provided for herein. Absent immediate steps to address these issues, Debtor will be unable to continue business operations as a going concern."
The order calls for Appco's current board of directors to resign and not interfere with the restructuring process, and says Titan will not "have any responsibility over operations or financial matters of (Appco)."
Greystone lawyer Glenn Rose said Weber's task will be to operate Appco with an eye toward selling it as quickly and profitably as possible.
"The higher the price the better, and the more that can be brought in, the better return the unsecured creditors will have on what they're owed," Rose said.
Tuesday's agreement included Greystone's promise to add $1.5 milli