Luke and Rochelle Davis consider themselves fairly risk-averse people.
Besides the mortgage for their four-bedroom house in Topeka, Kansas, the couple owns all of their assets in full. Their white Ford Bronco, maroon Subaru Forester, Forest River Cherokee trailer and thousands of dollars worth of personal and household goods are all paid off. So is the 2004 Glastron bow rider speed boat Luke’s father gifted him before he passed away.
But the Davises, both 52, took a risk nearly five years ago when Rochelle’s mother, Cheryl Keller, needed help. It’s a decision that’s haunted them ever since.
Keller, 73, inherited a $1 million trust from her grandmother. The trust was previously invested in a strip mall near San Diego that featured a barbershop and laundromat. In late 2020, Keller sold the strip mall as part of a 1031 exchange, which let people swap from investing in one real estate property to another of similar value while deferring capital gains tax on the sale if they reinvest within 45 days.
After looking for several weeks, Keller found a vacant gas station for sale in Paris, Arkansas, a small town about 110 miles northwest of Little Rock. The site featured a self-serve car wash and a 3,000- square-foot convenience store branded as the Big Red Corner Store.
The asking price was a little over $2 million — close enough in value for Keller to make the 1031 exchange. The seller was a Georgia-based fuel company called Mountain Express Oil.
But Keller had no job and no income, and the bank refused to finance the other million so she could acquire the property. That’s when she asked her daughter and son-in-law to chip in to help make the deal happen.
The couple was hesitant. Their decades-long careers in the U.S. military — Luke was an officer in the Air National Guard and Rochelle was a nurse in the Army reserves — were a far cry from selling smokes, cokes and fuel. But Keller needed their support.
“All of it was way outside our league, to be honest,” Rochelle Davis said. “But we were reassured by the bank that this was a good investment.”
Two days before the 1031 deadline, Keller acquired the property for $2.2 million in a sale-leaseback deal with Mountain Express. The triple-net lease agreement meant that she would own the property with the Davises serving as guarantors, and Mountain Express would handle all operations, such as paying property taxes and making maintenance upgrades.
The Davises viewed the deal not only as a means to help Keller, but as a future investment for them and their two daughters, ages 14 and 10. They intended to refinance the property in a couple of years and then cash out.
As this all happened, Mountain Express was growing rapidly, acquiring and selling hundreds of c-stores via sale-leasebacks with about a billion dollars of financing to work with.
Little did the Davises and Keller know that behind the scenes, Mountain Express’ leaders were siphoning millions of dollars the company made through these transactions into separate entities they owned instead of upkeeping and improving the stores. Many of the c-stores Mountain Express leased were extremely neglected and ended up in dire condition, eventually leading to the company’s demise.
“I was just trying to do the right thing by my mother-in-law and her family's trust. And it's just turned into a nightmare.”
Luke Davis
Former guarantor of a Mountain Express-leased c-store
The Big Red Corner Store was no different. In January, the store was foreclosed on after sitting on the market for about a year. Just over four years after becoming guarantors for the property, the Davises filed for Chapter 7 bankruptcy.
Mountain Express’ negligence not only threw the Davis family and Keller into financial crisis, but fractured the relationship between Rochelle Davis and Keller, who’ve barely spoken to each other over the past several months. Keller was not available to be interviewed for this story.
“I think it is important for people to know this didn't just impact big real estate investment trusts — this impacted individual people,” Luke Davis said of Mountain Express’ negligence. “I was just trying to do the right thing by my mother-in-law and her family's trust. And it's just turned into a nightmare.”
An unexpected turn of events
The Davises acknowledged that the first risk they took — even before signing on as guarantors — was that neither they, nor Keller, visited the store before the deal was made.
They had their reasons for not making the trip to Paris. The Davis family lives in Kansas and Keller lives in Florida. They only had a few days to finalize the deal once Keller identified the location. Rochelle Davis was also recovering from chemotherapy after a bout with Hodgkin’s Lymphoma, making travel extremely difficult.
“It was just a really stressful time,” she said.
But the Davises trusted the bank’s recommendation that the store was a sound investment, as well as Mountain Express’ track record. When the deal closed, they took a hands-off approach to the store.
“When we were presented with the master lease agreement, it was pretty clear what the operator and tenant was responsible for,” Luke Davis said.
Mountain Express paid its rent every month for the first year and half. But the tides turned in March 2023 when the company notified the Davises and Keller that it was filing for Chapter 11 bankruptcy.
Left with many questions about their finances and future, the three tried emailing and calling Mountain Express. They never got a response. Then they tried calling attorneys working on the bankruptcy case, who said they couldn’t share any information.
Since the c-store had no phone line, the Davises resorted to social media to dig up some information. Through Facebook, they found the store’s manager, who had worked there since before Mountain Express bought it.
In talking with the manager, the Davises learned that the store hadn’t been as functional as they thought. The manager told them that the store would go weeks at a time without any fuel since Mountain Express wasn’t paying for deliveries and that, at some point, the store lost its alcohol and tobacco licenses.
“She had explained to me that [the store] had been on a pretty sharp decline for the last year,” Luke Davis said.
Mountain Express stopped paying rent in July 2023, the Davises said. A month later, the company shifted to Chapter 7 bankruptcy and ceased operations. This was also when the Davises learned from the manager — without any formal communication from Mountain Express — that the store had been shuttered.
“They told the manager, who we were in communication with, to just lock it up,” Rochelle Davis said.
When the couple saw news reports that other Mountain Express-leased gas stations around the country were being shut down and ransacked, they knew it was finally time to visit the store. Within 24 hours of receiving a court order allowing landlords to secure their properties, Luke Davis headed to Paris.
“We kind of immediately were like, ‘Wow, we have to go down to Arkansas right now,’” Rochelle Davis said.
A trip to Paris
After changing the locks and cleaning up perishable items that were still stocked on store shelves, Luke Davis tried to collect the location’s financial records. Contrary to what was stated in the lease agreement, Mountain Express didn’t keep any records from transactions made at the store, he said, adding that monthly and weekly receipts kept by the manager were all he had to work with.
“I did the best that I could to kind of piece together what [the store’s] financial operating history had been,” he said.
He began rummaging through those receipts and created spreadsheets to keep these records in one place. Rochelle Davis added that her husband discovered “interruptions in the supply chain,” where the store went weeks at a time without having any fuel, cigarettes and beer.
He also discovered that prior to the store closing down, the car wash’s heating unit died. Although the manager told him they reached out to Mountain Express to replace it, the company never did, and the water lines ended up freezing, “rendering the car wash inoperable,” he said.
Additionally, he learned that Mountain Express never owned the store’s gas pumps, instead leasing them from a third-party fuel supplier. When the store shuttered, that company started demanding the pumps be returned to them, or that they be paid “tens of thousands of dollars,” he said.
He said this was when it occurred to him that Mountain Express was being mismanaged at the corporate level.
“In retrospect, you can look and see that they purchased these properties, and there was never any maintenance [or] upkeep.”
A failed sale
With Mountain Express ignoring them, it was up to Keller to bring the store to a condition where it would eventually sell. But with her assets completely wiped out by this point, that responsibility — and the $1.2 million loan Keller took to acquire the store — fell on the Davises’ shoulders as guarantors of the property.
“[The trust] was her retirement fund… and with the roughly $1 million that she used as the investment for the purchase of this property, that's now gone,” Luke Davis said of his mother-in-law.
The Davises spent the next year paying tens of thousands of dollars out of pocket to keep the store running and to create “a clean report for any potential buyer,” he added.
At first, that included the store’s mortgage payments, but their lender eventually granted them a forbearance, allowing them to pause the payments. Still, they continued to pay the store’s property taxes, utility and electricity bills, and made various repairs at the location. They even spent about $3,000 on a tank-and-line test and repairs to ensure the underground fuel tanks were up to standards.
“My wife and I insisted on there being an emergency fund — it wasn't very big, just under $60,000,” Luke Davis said. “So we continued to pay the mortgage and the taxes and the utilities on the location, and that money is gone.”
By mid-2024, the store was being marketed on several commercial real estate websites. As the months passed without a sale, the financial hardship began to strain the Davis family.
“I can't explain to my kids why Mommy's crying, or [why] we can't go on this vacation right now, because we don't know what our financial situation is going to be in a couple of months,” Luke Davis said.
For a moment, it looked like a sale was on the horizon — the Davis family’s broker was in talks with a potential buyer for several weeks, Luke Davis said. Due to the store’s condition and history, he and his wife never expected to get the $1.2 million back, but they were at least hoping for around $600,000, he added.
But the buyer ultimately decided against the purchase. And in December, right around Christmas, the Davises were informed that the property would be foreclosed upon — forcing them to declare bankruptcy. They officially filed for Chapter 7 in the U.S. Bankruptcy Court for the District of Kansas on Jan. 14.
“Not only did Mountain Express take my family's trust fund and my mother's ability to take care of herself, but now I'm not even going to be able to take care of her."
Rochelle Davis
Former guarantor of a Mountain Express-leased c-store
Since then, the Davises said they’ve barely spoken with Keller.
Rochelle Davis found out that Keller came out of retirement to work at a grocery store and moved into a trailer home. When Mountain Express imploded, she tried to get her mother to come live with them in Kansas, but Keller refused.
“Not only did Mountain Express take my family's trust fund and my mother's ability to take care of herself, but now I'm not even going to be able to take care of her,” Rochelle Davis said.
Finding closure
Bankruptcy wasn’t the answer the couple hoped for, but Luke Davis admitted that he feels like a burden has been lifted off his chest now that there are no more questions. He said that he and Rochelle are preparing to “tighten the belt” with their finances and explain to their kids that they won’t “be doing a whole lot of extras for a while.”
They won’t lose their home, he said, but their credit is going to take a hit “for years to come.” They’ll have to pay tens of thousands of dollars in cash and assets — potentially handing over the Ford Bronco, Subaru, Cherokee trailer and even the speed boat his late father gifted him.
He said that once the dust settles from the bankruptcy, he’ll allow himself to move on.
“I'll at least feel some closure that I don't have to go back down to that store [and that] I don't have to answer any more emails to the bank or anybody else… that will be some closure.”
