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Gas City seeks settlement with BofA, lenders, creditors committee regarding sale proceeds
By Lisa Kerner
Charlotte, N.C., March 4 - Gas City, Ltd. asked the court to approve a proposed settlement agreement among the debtors, Bank of America, NA, some station lenders and the official committee of unsecured creditors, according to a Friday filing with the U.S. Bankruptcy Court for the Northern District of Illinois.
The company wants "to resolve potential disputes over the allocation and distribution of proceeds from the debtors' proposed sale and potential causes of action, including avoidance actions, among the settlement parties," the filing said.
Under the settlement, gross sale proceeds first will be used to pay real estate taxes and direct costs of the sale.
The resulting net sale proceeds then will be distributed pursuant to a "waterfall" of payments, shared in differing percentages, among the station lenders, pre-bankruptcy secured lender Bank of America, the committee and the debtors.
In addition, the settlement agreement will provide $6 million from net sale proceeds for the debtors' estates to satisfy accrued and unpaid Chapter 11 administrative expense claims as of the sale closing and administrative expenses incurred after closing in connection with concluding the Chapter 11 cases.
The debtors will release the station lenders, Bank of America and Gas City unsecured creditors from claims and causes of action, and the station lenders and Bank of America likewise will exchange releases.
Station lenders will be entitled to submit credit bids for their respective station collateral as part of the settlement, the filing said.
Gas City, a gas station and truck stop operator based in Frankfort, Ill., filed for bankruptcy on Oct. 26, 2010. The Chapter 11 case number is 10-47879.
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