COLD SPRING, Ky. -- Owners of 59 regional AmeriStop franchises have placed $6.9 million on the table in an attempt to keep control of their convenience stores. They hoped to learn late yesterday whether they would be successful, said The Cincinnati Enquirer.
In November, Petro Acquisitions Inc., the parent company of the Cold Spring, Ky.-based AmeriStop chain, filed for Chapter 11 bankruptcy with debt estimated between $1 million and $100 million, according to court documents. (Click here for details.)
Since then, franchise owners in Ohio and northern Kentucky have been fighting to hold on to their businesses. Last month, the franchisees learned that the leases for the stores they operated were among the assets to be auctioned, said the report. The auction proceeds will be used to pay off more than $11.2 million Petro Acquisitions owes Wells Fargo Bank and Drawbridge Special Opportunities Fund.
The financing paid for bankruptcy proceedings, according to court documents.
As part of the original franchise agreement, franchisees subleased their stores from Petro Acquisitions.
The franchisees' lawyer, Marcia Andrew of downtown law firm Taft Stettinius & Hollister, has argued that selling the prime leases to the highest bidder could put her clients out of business. (Click here for details.)
Despite their concerns, and formal objection to the sale of the leases, the franchisees agreed earlier this month to move forward with an auction.
Last week, according to the report, the franchisees banded together to bid on 59 prime leases, competing with Hyde Park, Ohio-based Gilligan Oil Co., the owner of local Exxon, Shell and Sunoco stores. (Click here for details.)
Ultimately, their collective bid of $6.9 million in cash apparently held up, despite Gilligan's bid of $7.1 million, Andrew told the newspaper.
Included in the franchisee's bid is their agreement to release all claims against Petro Acquisitions, which included—among other allegations—claims that the company overcharged franchisees for fuel, failed to pass through rebates and failed to pay vendors, resulting in damages that could exceed $10 million, Andrew said.
"They really pulled together as a team to get this done," she told the Enquirer.
The results of the auction are not final, however, until approved by U.S. Bankruptcy Court Judge Burton Perlman, the report said. A hearing was scheduled for yesterday afternoon.
Lance Little, who owns several franchises in northern Kentucky, said the owners of the 59 franchise store are planning to form a limited liability company in hopes of continuing the AmeriStop name. "I think we're pretty relieved that this is almost over and we're going to have our independence," Little told the paper.
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