Struggling gas station chain files for Chapter 11 bankruptcy

According to MSN, The gas station and convenience store sector has faced significant distress in recent years, marked by bankruptcy filings and store closures. This industry, crucial for everyday consumer needs, has struggled with financial difficulties and operational shifts.

The Store Shuts Down

In July 2024, The Store convenience stores and gas stations, owned by Team Schierl Cos., was forced to close all 25 of its locations in Michigan and Wisconsin. The closure followed the Chapter 7 bankruptcy liquidation of its landlord, Mountain Express Oil Co., which filed for bankruptcy in August 2023. Mountain Express, based in Alpharetta, Ga., was established in 2000 and once distributed fuel to 828 fueling centers and 27 travel centers across 27 states. In 2022, The Store sold the land and buildings of its locations to Mountain Express while continuing to manage store operations, including equipment, inventory, staffing, and vendor relationships.

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Retail Strategy Shifts

Amid these financial struggles, a notable shift in the gas and convenience store sector this year is not solely driven by distress but also by evolving retail strategies aimed at future resilience. Shell plc, a major player in the industry, announced in March its plans to divest approximately 500 company-owned retail sites annually in 2024 and 2025. This move is part of Shell’s strategy to upgrade its retail network by expanding electric vehicle (EV) charging infrastructure and enhancing convenience offerings. According to Shell’s Energy Transition Strategy 2024 report, the company operated more than 46,000 Shell-branded retail locations, including 12,500 convenience stores worldwide, at the end of 2022. Shell also managed around 139,000 electric charge points, with over 28,000 located at Shell forecourts and other key locations.

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SQRL Service Stations Files for Chapter 11

Financial issues have also led the new owners of SQRL Service Stations in Florida to seek Chapter 11 bankruptcy protection. Filed in the U.S. Bankruptcy Court for the Northern District of Texas in Dallas, the Chapter 11 petition aims to restructure over $1.2 billion in unsecured debt. Gas Hub LLC, which acquired the chain of gas stations and convenience stores in April for $17 million, owes a significant portion of its debt to Blue Owl Capital, the previous owner of leases for numerous SQRL locations. Gas Hub’s attorney, Sidney Scheinberg, indicated that the company is currently assessing its assets and leases to protect and reorganize the business if possible.

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SQRL Service Stations filed its Chapter 11 petition on August 16, following an involuntary Chapter 7 liquidation petition filed on May 13 against SQRL Holdings and its founder, Blake Smith, for unpaid rent. In July, both parties involved in the Chapter 7 case jointly moved to dismiss the petition, with SQRL Service Stations planning to file for Chapter 11, which it did in August. However, Judge Bianca M. Rucker denied the motion to dismiss the involuntary Chapter 7 case. Blake Smith is not involved in the Chapter 11 proceedings.