Getty Petroleum Marketing reaches lease agreement with Getty Realty

By Jim Witters

Wilmington, Del., March 9 - Getty Petroleum Marketing Inc. has reached agreement with Getty Realty Corp. and the official committee of unsecured creditors concerning the transition of control of properties previously leased to the debtors, according to a company press release and an 8-K form filed with the Securities and Exchange Commission on Friday.

The stipulation agreement states that the debtors have paid Getty Realty $10.3 million of $19 million of fixed rent due for Dec. 5 through March 31. The debtors are expected to pay $1.5 million more before April 1.

All unpaid amounts due under the master lease for periods after the filing of the bankruptcy petition become due April 30.

The stipulation agreement

• Establishes April 30 as the date by which the debtors must either assume or reject the unitary master lease with Getty Realty;

• Provides that Getty Realty may take back individual or groups of properties before rejection of the master lease for the purpose of re-leasing, selling, licensing or otherwise disposing of them. Such take-backs will reduce the rent due from the debtors;

• States that, after rejection of the master lease, Getty Realty will take possession of all remaining properties subject to the master lease; and

• Caps at $10.5 million Getty Realty's aggregate administrative priority claim related to the period from Dec. 5 to April 30.

Getty Realty stated it "believes that by entering into the stipulation, it will be able to avoid possible contentious and costly litigation, improve its ability to capture cash flow relating to the properties subject to the master lease, minimize disruption to the properties that could occur from cessation of gas sales by the operators thereof, and permit the company to take greater control of the process for orderly recapture and re-letting or other re-disposition of its properties."

A hearing on the approval of the stipulation agreement is scheduled for April 2 in the U.S. Bankruptcy Court for the Southern District of New York.

Getty Petroleum, an East Meadow, N.Y., distributor of motor and heating fuels, filed for bankruptcy on Dec. 5. Its Chapter 11 case number is 11-15606.

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