Dive Brief:
- SQRL Service Stations’s non-real-estate assets from 406 convenience stores it used to operate are set to be auctioned off next month, according to a motion filed with the U.S. Bankruptcy Court for the Northern District of Texas.
- Although the leases for all SQRL c-stores were terminated last year, each lease was only for the property itself, according to the motion. This means anyone can acquire the non-real-estate assets, which are now up for sale about four months after SQRL’s owner, Gas Hub LLC, was forced into Chapter 7 bankruptcy.
- Suitors have until the end of the month to submit a bid, although there’s no set date for the auction, according to the motion. As of March 26, the only bid has come from Jamal Hizam, Gas Hub’s CEO, who is attempting to recoup some of the assets he lost in bankruptcy last year.
Dive Insight:
When SQRL shifted to Chapter 7 bankruptcy last November, the company’s trustee, Ann Burns, determined that the only way to recoup value from the business would be liquidating its assets. This included SQRL’s non-real-estate property, which may include any furniture, fixtures or equipment.
Although anyone can bid for these assets, Burns is notably inviting the landlords for these c-stores to do so. Many of these landlords — including individuals and real estate companies — have lost millions due to SQRL’s negligence and mismanagement over the past two years.
Hizam, whose Gas Hub business acquired the leases for hundreds of SQRL c-stores for $17 million last April, filed for Chapter 11 bankruptcy last August with over $1 billion in debt. By November, after failing to establish a debtor-in-possession bank account and provide proof of adequate insurance, Gas Hub was forced to liquidate its assets, which included all of its ties to SQRL.
Although he no longer has the leases, Hizam is looking to recoup the non-real-estate assets for 100 of the SQRL properties he lost, according to the motion. Instead of Gas Hub, he’s submitting his $50,0000 auction bid through a company called BZ Mart Inc.
Nearly half of these 100 c-stores are in Louisiana, while the rest are scattered across Alabama, Arkansas, Florida, Iowa, Missouri, Oklahoma, Pennsylvania and Texas.
Burns emphasized in the motion that there is “no warranty of any kind” that SQRL Service Stations owns any personal property at any of its former convenience stores.
