DENVER -- Western Convenience Stores is disputing it owes Suncor Energy $7 million, the largest unsecured debt listed in the c-store chain’s Chapter 11 bankruptcy protection filing.
The chain, which has 43 locations in Colorado and Nebraska, filed for bankruptcy protection Monday, as reported in a 21st Century Smoke/CSP Daily News Flash.
As a result of a forbearance agreement Western Convenience and Suncor Energy entered into on Dec. 23, 2014, Western Convenience owed Suncor $5.3 million, according to court documents filed by chain owner Hossein Taraghi.
In a court declaration accessed by CSP Daily News, Taraghi stated that while Western Convenience made all required payments until October 2015, the company’s “delay in obtaining a refinanced note from another lender due to the sale of the note by the prior lender, led to a claim of default by Suncor.”
Western Convenience disputes a default existed and last month sought a preliminary injunction to stop Suncor’s collection efforts, according to the declaration. That motion was denied.
Lee Kutner, a Kutner Brinen Garber attorney representing Western Convenience, told Denver news website the BusinessDen that the company never missed a payment to Suncor. He said nothing went wrong with Western’s business operations, and the bankruptcy filing came only after the delay in Western Convenience’s loan refinance.
“It took them a while to rewrite the loan and extend it,” Kutner told the news source. “They ultimately did that, but Suncor claimed a default under their forbearance agreement.”
Suncor claims a lien on all assets owned by Western Convenience. The Chapter 11 filing estimates Western’s assets are between $1 million and $10 million. Its liabilities also are estimated between $1 million and $10 million.
Aside from Suncor, Western Convenience’s other large debts include $4.2 million owed to bank VSD 4 LLC, $2.4 million owed to Offen Petroleum and $1.6 million owned to High Plains Bank.
As part of the declaration, Western Convenience is requesting the court’s permission to use its own cash collateral and access its existing bank accounts to pay for ongoing operating expenses, including inventory, employee wages, utilities, insurance and rents due for lease of store locations. The company employs about 369 people.
A court hearing before bankruptcy judge Thomas McNamara is set for 8:30 a.m. Thursday, Dec. 31, in Denver.
Centennial, Colo.-based Western Convenience Stores began in 1989 with one store and slowly grew to 12 stores until 2001, when growth accelerated. The majority of the chain’s units are in the greater Denver area, with a few—including a truckstop and two liquor stores—located in Nebraska. One Colorado location has a liquor store attached.
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