APPCO Bankruptcy Not Dismissed
GREENEVILLE, Tenn. – Despite some poor handling by the APPCO convenience store chain's owner before it declared Chapter 11 June 10, its bankruptcy case will not be dismissed as a "bad faith filing," Bankruptcy Judge Sharon Parsons ruled Tuesday, according to a TimesNews.net report.
Parsons denied a motion for dismissal by APPCO's former owner, Jim MacLean -- who owns 28 of the chain's 47 store properties. MacLean's lawyer, Rick Bearfield, argued that APPCO's parent, Sunshine Energy filed bankruptcy only because MacLean had begun repossessing store properties and the filing would put the remaining stores under a protective "stay," the report stated.
Parsons said while that may be largely true, "filing bankruptcy on the eve of foreclosure is not unusual." While Sunshine showed "reckless disregard of the state court proceedings" that led to possession being granted to MacLean's company, "in my view this is not a case that falls into the 'it stinks' category," Parsons was quoted as saying by the Web site. "I do not see this case as an abuse of the bankruptcy process."
Bearfield had argued that since Sunshine didn't owe any other creditors money, the filing was a way to protect assets.
MacLean will retain possession of the 12 stores taken back before June 10. Parsons also heard a motion from Bearfield earlier this week, asking that MacLean be granted a "relief from stay" and allowed to repossess the remaining nine stores it owns in Tennessee, according to the report.
State court judges granted MacLean the right to take back those additional stores, but they weren't repossessed before the filing, the report stated.
Parsons also mandated on the recommendation of Patricia Foster, the trustee in the case, that Sunshine needed to establish separate bank accounts for the three separate limited liability corporations in the case -- two in Tennessee and one in Virginia, the Web site reported.
Up to this point, revenues from the stores were "swept" into an account controlled by the parent company, Sunshine Energy, which also runs Crescent Oil convenience stores in Kansas that were also bought out of bankruptcy last September. She also said the local Sunshine LLCs must account for all their payments for goods and services to protect the bankruptcy estate.