A trustee representing Appco's estate and charged with looking after the interests of creditors, however, described the events since Appco's February 9 Chapter 11 reorganization filing [image-nocss] as "putting bandages on an open wound" and expressed grave doubts about Appco's prospects for successful reorganization.
Judge Marcia Phillips Parsons allowed Blountville, Tenn.-based Appco, which Titan bought for $30 million in September 2007, to pursue fuel agreements with two gasoline suppliers that company representatives said will allow it to get fuel to its 58 convenience stores within days, said the report. Those stores have been without gasoline for nearly two months, and supplies of groceries, beer, cigarettes and other store items have dwindled to nearly nothing since then.
Friday's hearing also revealed, however, that Parsons has not been completely impressed with how representatives of Appco's parent company have progressed in finding financing since the Chapter 11 filing, and that trustee Patricia Foster is even more worried about their prospects, the report added.
"I don't know the state of the post-petition liabilities that are still outstanding, and those are normally things that I hear in these types of hearings," Parsons told the newspaper. She added, however, that the fuel agreements with PM Terminals, Roanoke, Va., and Mountain Express Oil Co., Woodstock, Ga., seem to offer a chance for Appco to raise some money through its business. "It would appear that this is the best chance of getting some revenue back in so the debtor can meet the rent and the utility obligations that are coming up," she said.
A lawyer for Appco's main secured creditor, Greystone Business Credit, suggested that "best chance" was slim at best. Glenn Rose spent much of the sometimes contentious three-hour hearing suggesting Appco's representatives have failed to produce the kinds of documents and proof that would show they are moving toward a legitimate recovery and reorganization, the report said.
Rose said rent on Appco's stores is due Sunday and totals about $350,000, that utility providers can legally begin cutting off utilities once a bankruptcy case is 20 days old and that Appco has various other expenses on the horizon and no clear plan to raise money.
"This debtor next week has $500,000 to $1 million worth of obligations that are going to come due and has no basis to fund those expenditures [other than] Greystone's cash collateral, and there's really no proof that that cash collateral's going to do anything other than go down a rabbit hole," Rose told the paper.
Titan borrowed most of the $30 million it used to buy Appco and owes Greystone about $11 million.
Appco's attorney, Mark Dessauer, and two Titan officers insisted during the hearing that they were nearing completion of debtor-in-possession (DIP) financing and agreements with grocery suppliers and other creditors. They said in addition to the gasoline they hope to have available next week, other c-store goods should follow soon.Click herefor previous CSP Daily News coverage.
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