A trustee representing Appco’s estate and charged with looking after the interests of creditors, however, described the events since Appco’s Feb. 9 Chapter 11 reorganization filing as “putting bandages on an open wound” and expressed grave doubts about Appco’s prospects for successful reorganization.
Judge Marcia Phillips Parsons allowed Blountville-based Appco — which Titan bought for $30 million in September 2007 — to pursue fuel agreements with two gas suppliers that company representatives said will allow it to get gas to its 58 convenience stores within days. Those stores have been without gas for nearly two months, and supplies of groceries, beer, cigarettes and other store items have dwindled to nearly nothing since then.
Friday’s hearing also revealed, however, that Parsons has not been completely impressed with how representatives of Appco’s parent company have progressed in finding financing since the Chapter 11 filing, and that trustee Patricia Foster is even more worried about their prospects.
“I don’t know the state of the post-petition liabilities that are still outstanding, and those are normally things that I hear in these types of hearings,” Parsons said.
She added, however, that the fuel agreements with PM Terminals of Roanoke, Va., and Mountain Express Oil Co. of Woodstock, Ga., seem to offer a chance for Appco to raise some money through its business.
“It would appear that this is the best chance of getting some revenue back in so the debtor can meet the rent and the utility obligations that are coming up,” Parsons said.
A lawyer for Appco’s main secured creditor, Greystone Business Credit, suggested that “best chance” was slim at best. Glenn Rose spent much of the sometimes contentious three-hour hearing suggesting Appco’s representatives have failed to produce the kinds of documents and proof that would show they are moving toward a legitimate recovery and reorganization.
Rose said rent on Appco’s stores is due Sunday and totals about $350,000, that utility providers can legally begin cutting off utilities once a bankruptcy case is 20 days old, and that Appco has various other expenses on the horizon and no clear plan to raise money.
“This debtor next week has $500,000 to $1 million worth of obligations that are going to come due and has no basis to fund those expenditures (other than) Greystone’s cash collateral, and there’s really no proof that that cash collateral’s going to do anything other than go down a rabbit hole,” Rose said.
Titan borrowed most of the $30 million it used to buy Appco and owes Greystone about $11 million.
Appco’s attorney, Mark Dessauer, and two Titan officers insisted during the hearing that they were nearing completion of debtor-in-possession financing and agreements with grocery suppliers and other creditors.
They said in addition to the gas they hope to have available next week, other convenience store goods should follow soon.