OVERLAND PARK, Kansas -- In what the court itself is calling a “complex” case, Gas-Mart USA Inc. has filed a Chapter 11 voluntary bankruptcy petition in U.S. Bankruptcy Court in the Western District of Missouri.
As reported in a 2st Century Smoke/CSP Daily News Flash, court documents show that Gas-Mart has total alleged secured debts of approximately $25 million, more than $9 million in alleged priority claims and more than $12 million in alleged unsecured non-priority debts. There are more than 700 parties in interest in the cases, the documents said.
Affiliated bankruptcy cases include Aving-Rice LLC, Fran Transport & Oil Co. and G&G Enterprises.
On July 2, 2015, Gas-Mart shareholders, or debtors, filed four separate voluntary petitions for relief under Chapter 11 of the bankruptcy code. Each debtor remains in possession of its assets and continues to operate as debtor-in-possession.
According to the court documents, the parties agreed on the appointment of a custodian, John Sopinski. Since the appointment of the custodian, one group of shareholders and the CEO John Tittle Jr. have attempted to frustrate the efforts of the custodian. The bankruptcy petitions were filed without the knowledge of the custodian despite court orders.
Sopinki has filed a motion to dismiss the bankruptcy or appoint him Chapter 11 trustee.
On July 2, Tittle commenced this bankruptcy case. These filings were initiated by 50% of the shareholders of Gas-Mart (David George, Michael George, and George Family Trust). The other 50% shareholders are the Abraham J. Gustin Revocable Trust and Gregory J. Gustin (Abe Gustin died in 2010, and the redemption of his trust’s 25% interest in Gas-Mart and G&G Enterprises has been the subject of litigation for over three years in the District Court of Johnson County, Kansas, also involving the alleged misappropriation of funds from G&G Enterprises by the Georges).
The court documents allege that Tittle “did not like having to work under Sopinski.” Tittle met with and Sopinski in late June to discuss restructuring plans that Tittle was supposed to be formulating. Tittle told Sopinski that he wanted to buy the business after it got turned around with the Georges as his partners, and that “Sopinski’s salary should be cut in half because the company could not afford both of their salaries and he was not really necessary.”
The bankruptcy was filed without the knowledge or input of Sopinski or the other 50% shareholders. On July 3, 2015, after the bankruptcy was filed, Tittle told Sopinski that Tittle had told the Georges and the Gas-Mart employees not to tell Sopinski that bankruptcy petition being as filed.
The bankruptcy filing seeks to continue to pay employee wages and store operating expenses.
Overland Park, Kansas-based Gas-Mart USA, a high-volume distributor of motor fuel sold under the Phillips 66 and Conoco brands, has 108 convenience-store and gas-station locations in Illinois, Wisconsin, Indiana, Iowa and Nebraska.
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