“We welcome the fact that the process will now have structure and the supervision of the Bankruptcy Court to protect the value of our estate,” says Getty Realty Corp. CEO.
Getty Realty Corp. has announced that Getty Petroleum Marketing Inc. (GPM), the company’s largest tenant, has filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court, Southern District of New York.
Getty Realty Corp. had previously disclosed that it had served GPM with a formal notice of termination of the Master Lease as a result of GPM’s nonpayment of November 2011 rent. The company notified GPM that it was terminating the Master Lease and exercising its right to take possession of the premises underlying the Master Lease effective Dec. 12, 2011.
The company will continue to protect its interests and pursue appropriate actions against GPM, seek possession of the unitary premises underlying the Master Lease and pursue all other rights and remedies available to it. Getty Realty Corp. cannot provide any assurance regarding the ultimate resolution of GPM’s bankruptcy.
“We welcome the fact that the process will now have structure and the supervision of the Bankruptcy Court to protect the value of our estate,” said David Driscoll, president and CEO of Getty Realty Corp. “We plan to continue our efforts to repossess our properties. Over time we intend to reposition the portfolio of properties subject to the Master Lease in order to maximize the value of the portfolio. We are fortunate to have completed two acquisitions in 2011 that significantly reduced our dependence on GPM. These new portfolios as well as other assets owned outside of the Master Lease continue to perform and meet our expectations. Notwithstanding the filing by GPM today, we remain optimistic about the future of our company.”
As a result of the foregoing developments, it is likely that the company will be required to increase the deferred rent receivable reserve, record additional impairment charges, accrue for environmental liabilities. It is also likely that the company will incur significant costs associated with proceedings against GPM and a repositioning of the Master Lease portfolio. Getty Realty Corp. has not determined the amounts of any such costs or potential adjustments to its financial statements. These developments could materially adversely affect the company’s business, financial condition, revenues, operating expenses, results of operations, liquidity, ability to pay dividends or stock price.
For more information on the risks associated with the Getty Petroleum Realty’s relationship with GPM, see the disclosure under the caption “Risk Factors” in the company’s Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2010, the company’s subsequent Quarterly Reports on Form 10-Q and as updated by the company’s subsequent periodic reports filed under the Securities Exchange Act of 1934, as amended and the company’s other filings made with the Securities and Exchange Commission.
Getty Realty Corp. is the largest publicly-traded real estate investment trust in the U.S., specializing in ownership, leasing and financing of retail motor fuel and convenience store properties and petroleum distribution terminals. The company owns and leases approximately 1,155 properties nationwide.