Nineteen outlets of Pilot Travel Centers have been closed as a result of the bankruptcy of Mountain Express Oil.
Mountain Express, based in Alpharetta, Georgia, is a wholesale fuels and retail outlet operator that filed for Chapter 11 bankruptcy protection in the U.S.Bankruptcy Court for the Southern District of Texas in March.This week, that Chapter 11 filing was converted to a Chapter 7 petition, which is a liquidation of the company.
In a
statement posted on its website in March, Mountain Express said it had entered into a joint venture with Knoxville, Tennessee-based Pilot/Flying J to become Pilot’s largest dealer in the U.S.The timing of that relationship could not be determined.
“Mountain Express Oil Co.(MEX) and its affiliates are ceasing operations due to Chapter 7 liquidating bankruptcy,” a spokeswoman for Pilot said in an email to FreightWaves.“As a result, 19 of MEX’s dealer locations within our network are temporarily closed.Pilot Company will continue serving our valued customers at our more than 800 locations across North America.”
A screenshot circulating social media Friday that appeared to be signed by David Hughes, Pilot’s senior vice president for sales, listed 19 outlets that Huges said were “ceasing operations” due to Mountain Express’ bankruptcy.
It described the closures as “temporary,” with a list of alternate Pilot sites that customers could visit.
The 19 outlets listed on the Hughes document line up precisely with 19 outlets named in a Pilot filing in the bankruptcy case.
That filing, a notice of property interest, says Pilot’s property at the sites includes diesel and diesel exhaust fluid held in storage tanks; dispensing equipment; various pieces of sales-related equipment; and the storage tanks themselves.
The geographic reach of the 19 includes outlets in Alabama, Arkansas, Louisiana, Missouri, North Carolina, Pennsylvania, South Carolina, Kansas, Louisiana and North Dakota.
Pilot is an
80%-owned subsidiary of Berkshire Hathaway (NYSE: BRK.B) with ultimate plans to have Berkshire acquire 100% of the company.
Convenience store real estate complexity
Real estate relationships in the convenience store world can be complex; that is what
ultimately sank the last-minute bid by ARKO to acquire TravelCenters of America out from under BP, which had already announced a deal to acquire the travel center chain.
Ironically, ARKO
(NASDAQ: ARKO) earlier this month submitted a bid of $13.5 million for some of the assets of Mountain Express.
“We believe that our proposal will allow the Company to execute an orderly winding-down of (Mountain Express) while allowing for continued employment of a majority of the Company’s employees,” reads the Aug.4 offer letter to various attorneys and financial representatives.“Additionally, we believe that our proposal will provide the opportunity for the hundreds of the Company’s dealers to continue to operate their small businesses at the stations and provide for employment of their thousands of employees, as opposed to causing the creditors, employees, the dealers’ small businesses, and other Company stakeholders to be subject to a Chapter 7 liquidation.”
C-Store Dive, a news outlet that covers the convenience store industry, said the bid by ARKO subsidiary GPM Investments is now in mediation between GPM and the lender of debtor-in-possession financing, which has helped keep the company alive.
Fast rise, quick fall
Mountain Express operated convenience stores under numerous national brands, according to its website.
In the bankruptcy court’s order to convert the filing to Chapter 7, the judge said all those licenses are terminated.
Some of Mountain Express-operated convenience stores already had shut down, according to C-Store Dive.
Mountains Express’ recent history has been a story of a quick rise and fall.It was purchased by Turjo Wadud in March 2020 from its founders.
Wadud was described in the company announcement of the acquisition as a “series entrepreneur.”
It made several acquisitions, helped by a $205 million debt financing it acquired less than two years ago.That same month, October 2021, it also announced the acquisition of Brothers Food Mart, just seven months after another acquisition in March of the West Hill Ranch convenience store chain.
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