Convenience Store Chain Exits Chapter 11 bankruptcy

by San Antonio Attorney

After due diligence, gas and convenience store chain Western Convenience Stores has successfully climbed out of bankruptcy, thanks to a financial restructuring plan implemented last August 31.  The deal provided Western and all of its affiliate companies with an adequate credit facility that enabled the struggling business to get back on its feet.

Court documents reveal that Western, an independent gas and convenience store chain with branches in Colorado, Western Nebraska and the greater Denver area, was forced to file for Chapter 11 bankruptcy late last year when a creditor accused the company of breaching a contract signed last 2014.  The creditor then threatened to seize 37 of the company’s 43 branches—thus leaving Western with no choice but to file for bankruptcy in order to survive.  The bankruptcy allowed Western to continue full business operations without having to deal with constant pressure from frustrated creditors.

“The financial reorganization agreement was a very complex one.  It involved a lot of hard work and tricky negotiations which we could not have resolved without help.  We are very grateful to our colleagues from Garrison, for their exemplary skill in handling a highly volatile situation,” said Petroleum Equity Group CEO Ken Shriber.  Petroleum Equity Group serves as the sole industry consultant on fuels and convenience stores who, together with Garrison, helped Western craft an equitable debt restructuring plan.

Chapter 11 is a type of bankruptcy that involves the reorganization of a debtor’s business affairs, financial obligations and remaining assets.  This option is usually open to large corporations who incur equally large debts, but small enterprises may also avail of this type of bankruptcy if necessary.  Filing for Chapter 11 bankruptcy allows the struggling party to formulate a reorganization plan that will allow them to settle their obligations equitably.  This includes cutting expenses or looking for new ways to earn money, while briefly holding creditors off.  This is different from Chapter 7 bankruptcy, wherein the bankrupt company needs to close and sell off their remaining assets in order to settle outstanding debts.  Despite all of its benefits for eligible businesses, Chapter 11 bankruptcy is significantly more expensive and more complicated compared to Chapter 7 bankruptcy.

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