APPCO’s Ex-Owner Wins Court Battle

APPCO’s former owner won the right to keep the 12 convenience store buildings he repossessed early this month, according to a ruling by Federal Bankruptcy Judge Marcia Parsons, the Johnson City Press reported.

After the decision, a representative for Jim MacLean said MacLean’s property companies plans to gain possession of the other 16 stores he owns around the Tri-Cities and try to lease them to another company.

“Our plan is to regain possession of the stores and bring to them a new tenant who is qualified to operate convenience stores and has the financial resources to operate them successfully,” said Jeff Benedict, APPCO’s former CEO and the president of MacLean’s property-management companies.

As the landlord for more than 28 APPCO stores owned by Sunshine Energy, MacLean’s companies had terminated the leases in March after it said Sunshine was delinquent in its rent payments, failed to pay back property taxes or carry out certain maintenance tasks.

MacLean gained default judgments on 22 of those stores in May and had repossessed and closed 12 of them, when Sunshine declared Chapter 11 bankruptcy June 10, stalling the process.

Sunshine, which had purchased the 47-store chain in September 2009 after Titan drove it into bankruptcy in February 2009, received a bankruptcy-mandated “automatic stay” on further repossessions when it filed – on a day MacLean’s company was about to close seven more stores.

Sunshine, owned by Florida billionaire and U.S. Senate candidate Jeff Greene, then filed a request to have the default judgments overturned and nine of the 12 closed stores returned.

In court last week, Sunshine’s attorney Mark Dessauer, argued that the lease terminations were invalid, maintenance requirements weren’t specific enough and Sunshine was misled into believing MacLean wasn’t really planning to begin closing stores.

Meanwhile, Benedict testified he sent multiple letters to Sunshine between January and March regarding the problems, and warned the buyer, Greene, last Aug. 31 that significant maintenance issues existed and they would be Sunshine’s responsibility. He also described a phone call to Sunshine attorney Roger Dade on May 4 to tell Dade about May 6 hearings over the properties and give him a chance to hire a local lawyer and get those hearings continued, the Johnson City Press reported.

Dade allegedly returned the call May 5, and Benedict said if he found a local attorney that attorney could call MacLean’s lawyer, Rick Bearfield, up until midnight that night – otherwise the default cases were going forward.

But Dade testified Wednesday he was “shocked” to learn June 2 that the store closings had begun.

In the end, Parson’s sided with MacLean, stating, “Nothing the debtors have suggested would provide a good defense at law.”

The result marks an uncertain future for “Sunshine East,” as the APPCO stores are known. If MacLean wins all 28 of his properties, that would leave just 19 other stores.

MacLean’s companies also have filed a motion to have the bankruptcy itself dismissed, claiming it was simply a method to prevent further property repossessions. That court case is scheduled to be heard July 12, but Benedict said other motions could be filed before then trying to allow for repossession through a “relief from stay,” despite the ongoing bankruptcy.

For more on the back story, visit:

http://www.cstoredecisions.com/article/10011/bankrupt-sunshine-wants-stores-back.html

 

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