Appco Sale Approved

Bankruptcy judge OKs procedures, schedule to put 47 Appalachian Oil sites on block

Published in CSP Daily News

GREENEVILLE, Tenn. -- Judge Marsha Parsons of the U.S. Bankruptcy Court for the Eastern District of Tennessee yesterday gave final approval for the prompt sale of the assets of Appalachian Oil Co. Inc. (Appco), Blountsville, Tenn., a company in Chapter 11 bankruptcy proceedings. The action designates NRC Realty Advisors LLC as the agent to execute the sale of 47 gas stations and c-stores operated by Appco in northeastern Tennessee, southwestern Virginia and eastern Kentucky.

The court also approved yesterday the sale procedures and NRC's accelerated sales schedule. "We feel confident that we have a strong and viable business for sale, and we've had a tremendous amount of interest and unsolicited calls both to me and to NRC asking, 'When is the company going to be officially for sale?'," NRC's Andy Weber, the court-appointed chief restructuring officer for the sites, told CSP Daily News in mid-May.

Weber is responsible for all operational and financial matters of the company, as well as all efforts to market and sell the company's assets, part of a broader agreement between Appalachian Oil and its creditors, including principal secured creditor Greystone Business Credit II LLC, New York, to facilitate a sale of the company and its assets.

Weber added, "The chain itself in its geography lends itself to three distinct regions. One is Kentucky, another is southwest Virginia, and the third in northeastern Tennessee. There are a lot of regional operators in those markets that may simply be interested in their region. We have the ability and we will certainly consider somebody who wants to take the entire chain, as well."

Weber said that the chain has "shed a few stores" as part of court dealings with landlords. "At one point, they had 60-plus and now we're down to 50 [now 47]," he said at the time. "But that's a good group of stores that are all profitable, and yes, they're back in stock and servicing the customers." Many of the stores closed their doors for several weeks when financial issue made maintaining supply both in the stores and at the pumps a problem.

Appco filed for Chapter 11 bankruptcy protection on Feb. 9, 2009, 17 months after being purchased by Dallas-based Titan Global Holdings Inc. in September 2007.

"Titan worked to ensure the best possible outcome at this stage. Unfortunately, Greystone's subprime hedge fund practices have put the company in this position. Titan will continue to review its options and work in the best interests of the employees and vendors," Blois Olson, executive vice president of Minneapolis-based Tunheim Partners, a spokesperson for Titan Global Holdings' legal counsel, told CSP Daily News.

All of the stores are leasehold properties. As reported in a CSP Daily News Flash yesterday, under the newly approved terms, Appco's stations will be offered for sale in a "buy one, some or all" format; 26 stores have been subdivided into small groups of stores operating under six regional master leases. Bids on master lease stores must include all stores within each regional master lease.

A complete list of stores is available online at www.nrc.com/906, or by calling the NRC Customer Service Center at (800) 747-3342, extension 906.

A Confidential Information Memorandum (CIM) will be available to prospective bidders as of June 11 that will contain information on the sealed-bid procedures and relevant information about the properties, including store attributes, financial summaries and lease details. Bidders will have approximately four weeks to prepare their bids, with final bids to be submitted no later than July 9.

Prospective bidders who have accepted the CIM will have access to data through an online "Virtual Deal Room" (VDR) for use in evaluating individual stores and preparing their bids. The VDR will include standard due diligence information as well as a copy of the purchase and sale agreement.

NRC, Appco, Appco's creditors and the bankruptcy court expect to move quickly in evaluating all bids and selecting those to be accepted, they said. All sales are expected to close within 10 days of court acceptance of the winning bids.

Chicago-based NRC has extensive experience in the sale of c-stores and gas stations, including sales of whole operating companies. NRC's sealed-bid sale process has been used for the disposition of thousands of retail petroleum stations and convenience stores by other companies, it said, including major oil companies, over the past 20 years. It provides real estate and financial advisory services to the c-store and petroleum industries. Also, NRC specializes in the accelerated sale of North American commercial and residential real estate. Since its inception in 1989, NRC has sold more than 10,000 properties, it said. Clients have included BP, Shell and Sunoco; White Hen Pantry; GE Capital and Fifth Third Bank; and Kmart.

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