Court compromise completes sale of stores to Road Ranger, Village Pantry, others
CINCINNATI -- With two sides of an AmeriStop franchisee battle agreeing in court to reach a compromise on their contracts, the future of more than 60 AmeriStop convenience stores was decided with a flood of store acquisitions being completed in the past two weeks.
Led by Road Ranger LLC closing on the purchase of 11 AmeriStop stores in Kentucky and Ohio and Village Pantry Inc. acquiring nine stores in central Ohio, as reported in CSP Daily News Flashes yesterday, bankrupt parent company Petro Acquisitions raised about $46.5 million for the sale of the stores.
For 179-store Village [image-nocss] Pantry, the $15.6 million acquisition is a step toward a previously promised doubling of its size.
“We are delighted to add this important Ohio market (northwest of Columbus) to our growing Midwest footprint,” Mick Parker, president and CEO, said in a press release. “We expect to take advantage of the economies of scale offered by this transaction and better positioned to enhance the value proposition for our loyal customers as we continue to introduce new merchandising concepts.”
Village Pantry and its parent company Sun Capital Partners also were the runner-up bidders for eight other stores in Kentucky. Most of those sites, however, went to Road Ranger, based in Rockford, Ill.
“Road Ranger is excited about its acquisition of these former AmeriStop sites, and is looking forward to expanding rapidly in the near future through the strategic acquisition of groups of stores and companies that fit Road Ranger 's criteria,” Dan Arnold, founder and president, said in a statement.
The rest of the AmeriStop stores were sold one, two and three at a time to individual businessmen or small investment groups, according to court documents.
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.
Hearings were held in February in U.S. Bankruptcy Court in Cincinnati to determine whether franchise agreements could be terminated and if the prime leases on 63 convenience stores could be sold at auction to the highest bidder free of any liens or sublease agreements. Selling the assets will go to pay off more than $11.2 million Petro owes to Wells Fargo Bank and Drawbridge Special Opportunities Fund for financing it got to pay for bankruptcy proceedings, according to court documents.
Franchisees, which sublease their stores from Petro, objected to selling the prime leases. They argued that such a move would violate their rights under federal bankruptcy laws and could put them out of business. Conversely, Wells Fargo and Drawbridge argued that the leases are fair game for an auction, which is the best course of action in order to recoup money owed to the two entities.
On February 20, both sides agreed to a compromise that paved the way for the auction to be completed.
Indianapolis-based Village Pantry, an affiliate of private investment firm Sun Capital Partners Inc., is a regional c-store chain operating 179 company-owned locations in Indiana and Ohio.
Based in Rockford, Ill., Road Ranger is a Midwest retail petroleum c-store chains with annual revenues of approximately $650 million. All stores operate under the Road Ranger banner and are located in Illinois, Iowa, Indiana, Missouri and Wisconsin. NRC Realty Advisors, Chicago, served as financial advisor to Road Ranger in the AmeriStop transaction.