APPCO Bankruptcy Hard on Store Managers

BLOUNTVILLE, Tenn. – As the APPCO convenience store chain treks through its second bankruptcy case in two years, former employees who worked at stores now closed and repossessed by chain's main landlord refuse to give up hope that an agreement will be put into place, allowing stores to reopen and employees to be rehired, according to a report by the Johnson City Press.

Nancy Rose, store manager of the APPCO located in Rogersville, Tenn., is one such employee. Her store was one of the 28 stores whose leases were terminated and were repossessed this spring by the chain's former owner, Jim MacLean, after current owner Sunshine Energy -- owned by a billionaire Florida businessman, Jeff Greene -- failed to keep current with rent, property taxes and repairs and later filed for Chapter 11, the newspaper reported.

More recently, her store closed in June, and its shelves are empty, while milk jugs have expiration dates of June 17. The only reason customers come to the store is for the bank that leases part of the store's space is still in operation, according to the report. Rose, along with her eight store employees and dozens of other former APPCO colleagues, are unemployed and are waiting as MacLean and his colleague, former APPCO CEO Jeff Benedict, finalize court arrangements so a new operator can be found to lease and run the stores. Another approximately 15 stores not repossessed by MacLean remain in operation around the region.

"All the girls are on unemployment, and they're just taking it check by check," Rose said of her work crew. "It's quite a cut in pay for them, but they're still hoping that something will happen here and we'll all be back as a group again." She added: "I'd like to have every one of the girls back again."

Former customer Betty West agrees. "Everybody loves the people that work here, and that's what it takes to make a store like this successful," West told the paper. "You've got to have the cashiers who are friendly and have a personality. I got my gas and cigarettes and drinks here, and I'm going elsewhere since they closed, but I would rather be right here because this is convenient for me. This is a great little store. I wish it was back open."

Rose told the paper it was difficult for APPCO's employees to cope with the depth of the troubles.

"We were all family, and when this started going down, it was really hurtful. We'd hear, 'well, so and so was laid off this week,' and next week another. It was very hurtful to see all that," she said in the report, noting it was a departure from the success APPCO saw during the roughly two decades that MacLean built the convenience store chain.

Rose said MacLean was closely involved with day-to-day operations, employees were treated well, and store managers earned bonuses based on store profits and several other incentive factors. When MacLean brought on Jeff Benedict as CEO, the company continued to be well-run, she told the paper. "I liked him from day No. 1, because I felt like he was very up front and honest," Rose said of Benedict. However, the stores were later sold to Titan Global Holdings, and investments were not made, causing the company to file chapter 11 in February 2009.

In early September 2009, employees were hopeful when they learned during a court hearing Greene was buying APPCO for $6.25 million of his own cash and would form Sunshine Energy, the report stated.

Rose was at that hearing and came away hopeful, telling the paper at the time: "We just need to get in with this new company and see what they require, how they want things run, and let's go for it."

However, money invested in the company by Sunshine went to poor decisions, such as changing the coffee vendor from Royal Cup, which Rose said had helped make APPCO's coffee highly popular.

"I don't know of a single store where the people liked that coffee, and it really hurt our business," she said in the report. "Above the store manager level, most people wouldn't say anything to Sunshine, because they didn't want to buck the system."

Because of this, Rose said maintenance issues went unaddressed, and late rent payments and unpaid property taxes prompted the repossessions.

"They wanted to go with the flow and not cause waves even though they knew it hurt business, because they knew they couldn't do anything. Well, now the flow's taken everybody into the gutter," she told the paper.

Meanwhile, Jeff Benedict has said he hopes to quickly strike a deal with another operator who can lease the 27 APPCO properties MacLean owns.

"If Mr. MacLean can find someone who will let the managers run the stores the way they know how and give them the resources to do it, we'll be down here welcoming those customers back with open arms," concluded Rose.

This ad will auto-close in 10 seconds