GREENEVILLE, Tenn. -- It's back to court for the principals engaged in the fight over the former assets of Appalachian Oil. According to a report in the The Johnson City Press, Appco's owner, Sunshine Energy, wants its 12 closed convenience stores back. The stores' property owner, however, wants Sunshine's recently filed bankruptcy thrown out of court so it can repossess another 16 stores.
On Wednesday, a judge was slated to hear Appco owner Sunshine Energy's argument that its main landlord, a company controlled by former Appco owner Jim MacLean, should relinquish 12 [image-nocss] store properties it repossessed earlier in June, said the report. A court gave an order allowing for those repossessions based on nonpayment of rent and property taxes.
Also, in a few weeks, the judge will hear arguments from MacLean's company, Management Properties Inc. (MPI), that the bankruptcy filing was meant to thwart MPI's right to repossess the stores, and it will ask that the bankruptcy be dismissed.
An Appco location in Kingsport, Tenn., was the first store that closed, on June 2, and MPI was in the process of repossessing all its 28 properties when Sunshine (composed of three separate corporations) filed for bankruptcy protection June 10.
Now, Sunshine claims those repossessions were based on "unlawful detainer actions" and asks that Parsons "set aside ... the Tennessee state court actions" and rule that the Sunshine companies be awarded possessions of the locations, the report said.
In asking for an expedited hearing on its motion to reinstate leases and grant possession of the properties, Sunshine's attorney Mark Dessauer contended the company will be harmed by the stores' closures.
Titan Global Holdings, a Richardson, Texas-based company, paid longtime owner MacLean $30 million for the 60-store Appco chain in September 2007; it filed Chapter 11 bankruptcy in February 2009. MacLean's involvement with the company didn't completely end, though, because he retained ownership of about half the stores through MPI.
Last September, Appco sold again, out of bankruptcy court, for a much smaller sum. Florida Sunshine Investmentsprimarily owned by Florida billionaire businessman Jeff Greene purchased Appco, paying $6.25 million for 47 stores and more than 100 dealer contracts as part of the bankruptcy resolution.
MPI has claimed rent payments were chronically late, property taxes weren't paid per the lease contracts, and crucial store maintenance wasn't being performed.
And now, Sunshine has filed a motion for approval of debtor-in-possession financing of $750,000, which it would borrow from a California lender called Aviation Plaza Partners. Those funds would be used to pay May, June and July rents (totaling nearly $400,000), along with $148,000 in back property taxes.
The motion claims Sunshine "has no other source of cash to meet its past-due and current obligations under the leases," the report said.
(Click here for previous CSP Daily News coverage.)
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