Armbruster Loses 18 Stations in Settlement
Keeps two units after bankruptcy deal
CLEVELAND -- Ohio State Senator Jeff Armbruster (R-North Ridgeville) will continue to own two Shell gas stations, but has lost 18 of his other stations to a buyout as part of a recent bankruptcy settlement, reported The Morning Journal. Armbruster Energy Enterprises LLC and Pinzone Armbruster Inc. both filed for Chapter 11, or reorganization bankruptcy, in November 2004, according to court records.
Last month, an agreement was reached in the two cases that closed Armbruster Energy, but left Pinzone running, Armbruster said. It is very difficult to be [image-nocss] an entrepreneur in today's world and today's economy. We take risks beyond what most people do, Armbruster told the newspaper. It was a pretty sad day for us. But it wasn't our choice, and what can we do?
In mid-August, federal Judge Arthur Harris approved a purchase agreement in which Shell Oil Products US (SOPUS) bought Armbruster's 18 stations, including inventory and all assets, according to the report, citing Armbruster and court documents.
Armbruster's last day running Armbruster Energy was August 17, he said.
I've been successful in this business for 33 out of 35 years, said Armbruster, who opened his first station in 1969. It's unfortunate for everyone. But I have a great family, good health and a lot of friends. At least I think I have a lot of friends.
The gas stations will be run temporarily by Convenience Management Services Inc., a branch of Strasburger Enterprises Inc.
Strasburger attorney Roger Ingram told the paper that Shell still owns all the properties, as it did when Armbruster operated the stations. CMS will simply be operating the stations on a lease-basis, Ingram said.
The plan is to sell the entire Columbus market to someone else, Armbruster said.
He said he could not discuss the price Shell paid to purchase the stations, but said the money was put in an escrow account under the control of Cleveland Title, according to court records. Cleveland Title, with the help of a U.S. trustee, will distribute the money among the creditors owed money by Armbruster at the time of his bankruptcy filing, said the report.
Despite the buyout, all of Armbruster's 185 employees have retained their jobs under CMS, he said. CMS has been nothing but honorable in their transactions with me. I was able to work out an agreement for all of my employees. I think that's pretty commendable for the two of us, he said, noting the only former Armbruster Energy employees that no longer received a paycheck are he and his wife, Lee, who co-owned the company.
Armbruster's other company, Pinzone, had its bankruptcy case dismissed, the report said, and he continues to own one station under its name in Amherst Township. He also owns a Shell station in Eaton Township, he said.
But Armbruster said he did not totally take the blame for the buyout. Of the 71 companies that own multiple stations under Shell, like Armbruster, he claims about 15% to 20% have been forced to foreclose, said the report. He blamed the trend on what he called faulty sales model numbersfigures Shell gives its operators to guide them in ordering inventory and predicting revenue. Armbruster said the stations have to base their sales plan off of Shell's numbers, which were wrong, and therefore, caused owners to incorrectly budget their businesses.
Armbruster's allegation was backed up in a civil complaint filed in July in the U.S. District Court for the Western District of Missouri, the report said. Sentis Group Inc., which owns 29 Kansas City, Mo., Shell stations, explained that Shell takes a percentage of expected income from stations as rent, whether the stations are meeting their goal sales or not. And operating under Shell's expected figures, Sentis alleged its stations lost money for about two years. It is now suing for at least $75,000 in damages, according to the suit, the report said.