Getty Realty Corp. (NYSE-GTY) (the “Company”) announced today that Getty Petroleum Marketing, Inc. (“Marketing”), the Company’s largest tenant, has filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court, Southern District of New York. The Company had previously disclosed that it had served Marketing with a formal notice of termination of the Master Lease (the “Notice”) as a result of Marketing’s nonpayment of November 2011 rent. Pursuant to the Notice, the Company notified Marketing that it was terminating the Master Lease and exercising its right to take possession of the premises underlying the Master Lease effective December 12, 2011. The Company will continue to protect its interests and pursue appropriate actions against Marketing, seek possession of the unitary premises underlying the Master Lease and pursue all other rights and remedies available to it. The Company cannot provide any assurance regarding the ultimate resolution of Marketing's bankruptcy.
David B. Driscoll, President and CEO of the Company commented, "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. 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 Marketing. 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 Marketing 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 Marketing and a repositioning of the Master Lease portfolio. The Company 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.