CINCINNATI -- A Cincinnati venture capital fund suing the AmeriStop convenience store chain for failure to pay in a stock deal was back in court yesterday, said The Enquirer. It asked a judge to appoint a third-party receiver to handle the company's affairs after AmeriStop president and majority owner Don Bloom resigned last week.
Walnut Investment Partners had settled its lawsuit against Petro Acquisitions Inc., which operates as AmeriStop, and was scheduled to update Hamilton County Common Pleas Judge William Mallory Jr. But Walnut Investment Partners [image-nocss] lawyer Joseph Callow Jr. said the recent departure of Bloom makes the request necessary, said the report.
The cooperation is still there, we'll jointly be seeking a receiver, Callow told the newspaper. Bloom owes Walnut money. We're still trying to work it out, but the short-term solution is a temporary receiver.
A call to AmeriStop's vice president Bill Zembrodt was not returned, the paper said. Lawyer James Frooman, who represents Petro Acquisitions, also did not return a phone call. A message left at Bloom's home was not returned.
It is not the only legal problem AmeriStop is facing, the report said. A lawsuit in Butler County Common Pleas Court alleges Petro Acquisitions owes KeyBank $500,000, a loan it guaranteed for Liberty Distributing Co., which failed to pay. The relationship between Liberty and Petro Acquisitions isn't clear from filings in the case, which is pending, the report added.
The case involving Walnut Investments is outlined in Hamilton County court documents. Walnut is a minority shareholder in Petro Acquisitions, owning 45% of the company.
Petro Acquisitions franchises about 140 gas stations and c-stores in Ohio, Kentucky and Indiana. AmeriStop operates three retail formats under the banners AmeriStop Market, AmeriStop Express and AmeriStop Express Drive-Thru.
On its website, Walnutwhich reportedly had $400 million under management in 2006says its investments are made primarily for the value appreciation on a multiple to investment basis and are planned so that, within a two to five year time frame, the Walnut Group can exit the project through various strategies (management buyout, IPO, sale or merger).
Bloom owns the other 55% of Petro Acquisitions, according to the lawsuit.
AmeriStop is headquartered in Cold Spring, Ohio. According to the Enquirer, in 2005, it ranked 24th on the Deloitte Cincinnati USA 100 list of the region's largest privately held companies with revenues of $231 million. The company did not participate in the ranking last year.
In May 2004, Walnut and Petro Acquisitions entered into an agreement in which Petro Acquisitions would buy back stock from Walnut Investment Partners. Over four years, Petro Acquisitions would buy back 450 preferred shares for $8.75 million. As part of the agreement, Walnut had a right to sell Petro Acquisitions' stocks if payment was not made.
The lawsuit alleges that last June, Petro Acquisitions breached that contract when it failed to pay $2.5 million it owed to Walnut, prompting Walnut to file the lawsuit.
Walnut entered into negotiations with Cincinnati-based Gilligan Oil Co. to buy the shares, according to the lawsuit.
Walnut and Petro Acquisitions settled in March, the report said.
Callow said the settlement is confidential and would not disclose details.
But then last month, in a new court filing, Walnut alleged Petro Acquisitions and Bloom breached the agreement. The lawsuit alleges Bloom was telling Gilligan Oil that Walnut does not have the authority to negotiate and make such a sale.
After three hearings, Mallory last week ordered that Walnut may continue the sale of Petro Acquisitions shares to Gilligan Oil, and Petro Acquisitions may continue to pursue the stock buyback with another company, but that Walnut has the right to approveor not approvethe transaction. At that time, said the report, Mallory told both sides he expects updated information on both discussions, according to court documents.
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