Mike LaVitola, founder of the Foxtrot convenience store chain, went on a sweet little media tour this week, using the language of resurrection. “We’re like a new startup again,” he told Crain’s Chicago Business, before rattling on about the glories of Foxtrot’s wine, cheese and breakfast tacos and deftly separating his “heartbroken” self from all of that bad stuff just a few weeks ago when Foxtrot fell into Chapter 7 bankruptcy, otherwise known as a liquidation without any plans for creditor repayment beyond the sale of assets.
“I still have my own questions as to what happened,” LaVitola told the business publication, painting himself, the founder, as just as confused as all the staffers who lost their jobs without notice, the landlords who lost a tenant and all the suppliers whose bills went unpaid. Let’s just say he should have been in a position to know more than most.
This and other following rosy stories also said that LaVitola was “working to repair relationships with vendors and employees,” which sounds good but sure is ambivalent language given that Foxtrot stiffed a whole bunch of small suppliers. Does “working to repair” mean making them whole? He does not seem to have been asked, but we doubt it.
LaVitola also said he’s “hoping for familiar faces when the stores reopen and familiar merchandise on the shelves.” We’d advise anyone with a brain attached to one of those familiar faces, or anyone who makes said familiar merchandise, to proceed with caution. There appears to us to be more going on here than the sunrise art you can find on the Foxtrot website.
C-Store Dive, a publication covering the convenience store industry, raised some serious questions about how the assets of Foxtrot were sold at an auction handled by J.P. Morgan Chase, where Further Point Enterprises, already an investor in the chain, acquired Foxtrot’s assets, for just $2.2 million. C-Store Dive’s headline called this a “completely ramrodded” auction and cited other attendees as believing that the intention was only ever to obtain one bid, even though $2.2 million did not seem like much for “Foxtrot’s inventory, intellectual property, accounts, chattel paper, documents, furniture, fixtures and equipment, general intangibles and goods.” Indeed not, especially given the Chicago media’s remarkable affection for these stores.
David Magruder of Further Point Enterprises is working with LaVitola, the front man. People are, of course, allowed to form new businesses from the same-named shells of old bankrupt entities, something that happens all the time, but various lawsuits in this case might further extend LaVitola’s heartbreak.
Donald Trump, a man familiar with bankruptcy, famously said that he had “used, brilliantly, the laws of the country” to his advantage. LaVitola would not be so crass, we assume, since that surely would offend the affluent young urbanites who patronize his high-end stores.
But what’s the difference, exactly?
