WEST CHESTER, Ohio -- The lawyer for troubled Petro Acquisitions Inc. said the West Chester, Ohio-based company is filing for bankruptcyas reported yesterday in a CSP Daily News Flashin order to reorganize, not liquidate.
In the past year, Petro Acquisitions, the parent company of the 140-site AmeriStop convenience store chain, has been under legal siege from, respectively, a venture-capital company, a bank and franchisees who want more timely payments to vendors. Petro Acquisitions has been under receivership since September, when president and majority [image-nocss] owner Don Bloom resigned.
Petro Acquisitions filed an order in Hamilton County Common Pleas Court Monday providing the schedule for Chapter 11 proceedings, according to its lawyer, James Frooman of the law firm Frost Brown Todd.
Most of the interested parties want to see this company in Chapter 11 bankruptcy so that we can put Humpty Dumpty back together again, Frooman told CSP Daily News. I'm not sure what the outcome will be, but it's so that we can do things within the bankruptcy that we simply can't get done outside of bankruptcy.
Frooman said there will be more than one Chapter 11 filing because of the number of entities under the Petro Acquisition umbrella. Most prominent are Ohio Valley AFM, Waco Acquisitions and Gillespie Acquisitions, according to Frooman. He said that under each of those, the Ameristop stores are incorporated.
Frooman said that while the most spectacular of the concerns for Petro Acquisitions is the lawsuit filed in 2006 by Walnut Investment Partners, a 45% owner of Petro Acquisitions, it was not the event that forced the filing. To say that the problems began there, nothing's ever that simple, he said. There were financial issues before the litigation commenced; the financial issues got worse after and have continued to deteriorate.
The lawsuit, since settled, claimed that Petro Acquisitions breached a contract to pay all of the $8.75 million in a share-buyback deal. When Bloom, owner of 55% of the company's stock, resigned, Walnut headed back to court to ask for a third-party receivership on September 11 because it had not yet been paid.
A separate lawsuit in Butler County Common Pleas Court alleges that Petro Acquisitions owes $500,000 to KeyBank of Cleveland for a loan it guaranteed for a third party that failed to pay. Also, according to the Cincinnati Enquirer, at least 25 franchisees representing 44 area stores asked to sign onto Walnut's lawsuit, alleging that Ohio Valley AFM Inc. has failed to pay vendors on a timely basis, resulting in the stoppage of grocery and gasoline deliveries.
According to the newspaper, an "informal agreement" has been reached with Petro's receiver, Leonard Z. Eppel, to allow the franchisees to use store cash to pay for deliveries as they arrive so the stores can stay stocked and open, said Marcia Andrew, the lawyer representing the franchisees.
Cold Spring, Ohio-based AmeriStop ranked 24th on the 2005 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 in 2006.
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