HomeInsuranceMountain Express trustee agrees on $23M settlement with insurance firm

Mountain Express trustee agrees on $23M settlement with insurance firm

Mountain Express Oil Company’s Chapter 7 bankruptcy trustee is set to handle a multi-million-dollar settlement as the former c-store and fuel retailer’s legal proceedings continue.

Fidelity National Title Insurance Company, an escrow agent that assisted in the proposed sale of over 20 Mountain Express-owned convenience stores in Wisconsin and Michigan in 2022, has agreed to pay $23.2 million to the trustee, Janet Northrup, according to a March 22 filing with the U.S. Bankruptcy Court for the Southern District of Texas Houston Division.

Northrup and Fidelity will meet with Chief U.S. Judge Eduardo Rodriguez on April 4 to approve the settlement. If approved, it will end a dispute that began last October when Northrup issued a complaint against Fidelity and Mountain Portfolio Owners, an affiliate of Blue Owl Real Estate Capital LLC.

Blue Owl is the parent company of Oak Street Capital, which had financially supported Mountain Express’ rapid growth back in 2021.

In the October complaint, Northrup claimed that Fidelity did not record the deeds to the c-stores in Wisconsin and Michigan, which MPO “attempted to acquire” from Mountain Express for $87 million in March 2022, according to the complaint.

At the time Mountain Express filed for Chapter 11 bankruptcy a year later, the deeds to those stores remained unrecorded by Fidelity, according to the complaint.

Northrup’s October complaint aimed to avoid having the unrecorded deals result in the transfer of these properties from Mountain Express to MPO. It also aimed to recover all funds held and received by Fidelity relating to these convenience stores, court documents show.

Although Fidelity and MPO responded by late November with counterclaims against Northrup, in early January the parties agreed to mediate the case. By this month, they agreed on the settlement. 

According to court documents, once the settlement is approved, Northrup will not disburse any of the funds for a week. The $23.2 million will then be given to Mountain Express’ bankruptcy creditors, a source with first-hand knowledge of the matter confirmed.

Fidelity National Title Insurance Company is a subsidiary of Jacksonville, Florida-based Fidelity National Financial Inc. Besides escrow services, the company offers title insurance policies, closing and other title-related services, according to its website.

A spokesperson from Fidelity Financial did not respond by press time to a request to comment on the settlement.

Mountain Express filed for Chapter 11 bankruptcy protection in March 2023. Five months later, a proposed sale to Arko Corp. — which also receives financing from Oak Street via Blue Owl — fell through, and the fuel and convenience retailer shifted to Chapter 7 bankruptcy, thus commencing the liquidation of its assets and terminating all operations.

In September 2023, Mountain Express agreed to sell the intellectual property rights for 20-plus convenience stores in Wisconsin and Michigan. The locations — which operate under The Store banner — were initially owned by Team Schierl Companies, which executed a sale-leaseback agreement with Mountain Express for them in early 2022. 

Northrup agreed to sell the intellectual property rights for these locations back to Schierl for $1 million and the dismissal of ongoing legal claims Schierl had against Mountain Express

Source link

latest articles

explore more