A judge this morning appointed a third-party receiver to handle Ameristop’s affairs after Cincinnati-based venture capital fund suing the convenience-store chain for failure to pay in a stock deal asked for the move.
Ameristop has recently been making headlines for running out of gasoline supply as well as Coca-Cola products after many employees leaked that the chain was no paying its vendors. Since the news broke, president and majority owner Don Bloom resigned.
Walnut Investment Partners had recently settled a lawsuit against Petro Acquisitions Inc., which operates as Ameristop, but Walnut’s lawyer Joseph Callow Jr. said the recent departure of Bloom brought about the third-party request.
“The cooperation is still there, we’ll jointly be seeking a receiver,” Callow told the Cincinnati Enquirer. “Mr. Bloom owes Walnut money. We’re still trying to work it out, but the short-term solution is a temporary receiver.”
Walnut is a minority shareholder in Petro, owning 45% of the company. Bloom owned the rest. Petro franchises about 140 gas stations and convenience stores in Ohio, Kentucky and Indiana.
In May 2004, Walnut and Petro entered into an agreement in which Petro would buy back stock. Over four years, Petro would buy back 450 preferred shares for $8.75 million. As part of the agreement, Walnut had a right to sell Petro’s stocks if payment was not made.
Petro breached that contract last June, failing to pay $2.5 million it owed to Walnut, prompting Walnut to file the lawsuit.
Walnut entered into negotiations with Gilligan Oil Co. to buy the shares. Soon after, Walnut and Petro settled in March. Then last month, in a new court filing, Walnut alleged Petro 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, according to the Enquire.
After three hearings, Mallory last week ordered that Walnut may continue the sale of Petro shares to Gilligan Oil and Petro may continue to pursue the stock buyback with another company, but that Walnut has the right to approve or decline the transaction.