Horizon Travel Plazas Files Chap. 11

Franklin, Tenn.-based Horizon Travel Plazas LLC, created in 2003 by former Mapco Express executives, has filed a petition for Chapter 11 bankruptcy in U.S. Bankruptcy Court in the Middle District of Tennessee, the Nashville Business Journal and Nashville Post reported.

Founded by former Mapco CEO James Alligood and Vice President of Business Development Steve Ramer, the convenience store chain has already shut down 11 of its 25 new stores in the Southeast, the publications reported.

The company’s format included large convenience stores that catered to car travelers in areas normally served by truck stops, and it quickly rolled out stores in Tennessee, Arkansas, Mississippi, Alabama and Georgia when it opened a few years ago.

But the economy had other plans. Attorney Elliott Jones of Drescher & Sharp, who filed the case yesterday, told the Nashville Post that three factors converged to squeeze the company:

  • Interchange Fees: As prices have risen, Horizon finds itself shelling out $160,000 a month more in card fees than it did a year ago. The companies that haul the fuel to the stores have also instituted a fuel surcharge to cover their increased costs.
  • High gas prices When wholesale gas prices go up as fast as they have lately, competitive pressures make it hard for retailers to raise their prices quickly and steeply enough to cover their costs.
  • Poor margins and lackluster in-store sales: Horizon is in a business where "you make a little money at the pump and a lot of money inside," Jones explained. Margins on the gas sales are thin at best, and the retailer counts on in-store sales to generate profits.

    Jones said he’ll file a plan with the Bankruptcy Court that is based on continuing to operate the 14 stores that remain open. "We believe those stores form the core of a viable company that can move forward as a reorganized entity," Jones told the Nashville Post.

    Some of Horizon’s bigger creditors, as listed on the bankruptcy filing:

  • H.T. Hackney Co. ($731,006.88)
  • Coca-Cola Enterprises Inc. ($230,080.79)
  • Hardin’s Sysco Food Services ($77,367.07)
  • Frito-Lay ($75,622.42)
  • U.S. Foodservice Inc. ($73,984.40)
  • Klinke Bros. Ice Cream Co. ($54,867.60)

    Others creditors included Krispy Kreme, Interstate Brands, Pepsi Cola, Robert Orr-Sysco, Sysco Food Services, Wood Fruitticher Grocery, Flav-O-Rich, Delta Beverage, Dairy Fresh of Alabama, Customized Distribution LLC, Cintas Corporation, Captivating Headgear, Buffalo Rock and BDT.

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