Dive Brief:
- Mountain Express Oil has officially “rejected and terminated” all of its c-store leases and existing fuel supply agreements, and will pay its employees various unpaid wages amid its tumultuous bankruptcy case, according to an Aug. 24 filing in the U.S. Bankruptcy Court for the Southern District of Texas.
- The bankrupt retailer’s licenses for the third-party branding of its individual operating sites have also been terminated at this time, according to court documents. Each of these actions is effective immediately, court documents show.
- The decision to convert Mountain Express’ bankruptcy case to Chapter 7 was signed by Judge David Jones. This comes about eight days after the retailer requested the court’s permission to cease all operations and terminate its employees after its proposed $49 million sale to Arko Corp. — parent of c-store retailer GPM Investments — failed.
Dive Insight:
Mountain Express originally filed for Chapter 11 bankruptcy in March, but its case has now been converted to Chapter 7 as the company is liquidating its assets.
All elements of its business have been turned over to its Chapter 7 trustee, Janet Northrup. This includes all records and estate property under Mountain Express’ possession, control or custody, as well as any estate cash or other property held in escrow or trust, court documents show.
As its leases officially end, the court has ruled that any property owner on which an abandoned Mountain Express-leased c-store is situated “may immediately enter the premises and take reasonable actions to secure, protect and maintain the property.”
Many Mountain Express-leased c-stores have become vacant or vandalized over recent weeks and months as the retailer stopped supplying fuel to various locations.
At this time, Mountain Express debtor-in-possession lenders — who shut down the proposed Arko deal — will provide $1.5 million for various administrative expenses, including paying employees all unpaid wages.
According to court documents, some of the major retailers whose fuel supply contracts with Mountain Express have ended include Pilot Company, BP, Chevron, Gulf Oil, Marathon Petroleum and Phillips 66.
Founded in 2000, Alpharetta, Georgia-based Mountain Express Oil formerly distributed fuel to 855 locations around the country, including 27 travel centers, and operated about 171 retail stores.
