Dive Brief:

• Convenience retailer Mountain Express Oil Co. has been approved to receive more than $37.8 million in debtor-in-possession financing as it seeks a buyer amid its bankruptcy case, according to court documents in the U.S. Bankruptcy Court for the Southern District of Texas.
• Mountain Express will use the money to pay certain costs, fees and expenses related to its Chapter 11 bankruptcy case; roll up and convert all prepetition obligations; and have money for working capital and other general corporate purposes, according to court documents.
• After Mountain Express filed for bankruptcy in mid-March, court documents and a source familiar with the situation confirmed that the retailer would need to reach certain “milestones” toward a sale as part of an agreement with its lenders for post-petition financing in the amount of $28.6 million.

Dive Insight:

Although a timeline regarding a sale of Mountain Express’s assets remains uncertain, new court documents note that the retailer has an “immediate” need to use the $37.8 million towards selling the entire company.

Additionally, the documents state that the DIP order is in the “best interest” of Mountain Express’s estates and creditors, since it will improve Mountain Express’s prospects of “a successful marketing process for the sale of substantially all of their assets.”

According to court documents, Mountain Express’s updated “case milestones” give the retailer 86 days from its March 18 petition date to establish a bidding process for the sale of its assets, 130 days to begin an auction for said assets and 150 days to close a sale.

Founded in 2000, Alpharetta, Georgia-based Mountain Express Oil distributes fuel to 855 locations around the country, including 27 travel centers, and operates about 171 retail stores. The retailer filed for bankruptcy about 17 months after it completed a $205 million debt financing to support its growth initiatives, which included reaching 100 company-operated stores by the end of 2021.

All company-owned or affiliated c-stores, travel centers and fuel centers in Mountain Express’s network are operating as normal during this period. 

Mountain Express did not respond by press time to an inquiry from C-Store Dive for more details on its recent funding approval.