It all came crashing down in the early evening on Aug. 24, 2023.

Mountain Express Oil, which filed for Chapter 11 bankruptcy protection in March of that year, sent a notice to its 1,000-plus team members informing them their employment was coming to an end. The company was shifting to Chapter 7 bankruptcy and ceasing operations, and its staff would lose their jobs at 5 p.m. the following day.

“Despite everyone’s best efforts, it has unfortunately become impossible to continue to operate Mountain Express Oil and its affiliates,” read the notice, a copy of which was obtained by C-Store Dive.

Several months later, that notice is the last time many ex-employees said they have heard from Mountain Express. They did not receive a severance package or parting benefits, nor a phone call from their former managers.

This abrupt turn illuminates the chaos that has ensued since Mountain Express filed for bankruptcy last March. That chaos has included Mountain Express’ ongoing disputes with its bankruptcy lenders, as well as the company cutting off fuel to its subtenants, allegedly misleading employees about its future and ultimately failing to sell its assets in a courtroom battle that pitted the company against its lenders.

Reporting this story

This article draws from interviews with four former full-time employees of Mountain Express, two real estate owners who acquired stores from Mountain Express and leased them back to the company, and two attorneys who are familiar with Mountain Express’ bankruptcy case. The names of the four former employees and one property owner have been kept anonymous to prevent retaliation.

Beyond these interviews, we reviewed hundreds of pages of court documents containing Mountain Express’ financial statements, property records, lease agreements, company history and more. We also sat in virtually on multiple court hearings between Mountain Express’ bankruptcy lawyers and its lenders’ attorneys.

According to four former full-time Mountain Express employees, the company was a dysfunctional workplace for years, largely due to the aggressive — and unorthodox — growth strategy its former leaders implemented.

Not only did these ex-employees cite a lack of transparency from leadership regarding its strategy and major decisions, but they also noted there was unethical deal-making and financial mishandling happening behind the scenes. Court documents filed by Mountain Express’ Chapter 7 bankruptcy trustee from as recent as March 2024 indicated these mishandlings were happening.

The former team members spoke to C-Store Dive under anonymity to avoid retaliation. They worked across Mountain Express’ finance and operations divisions, which gave them a front row seat to the company’s internal operations. C-Store Dive also spoke with two real estate owners who acquired stores from Mountain Express and leased them back to the company, as well as multiple attorneys who are familiar with Mountain Express’ situation, for this story.

The past year has marked a stark shift for Mountain Express, which seemed to be on cloud nine after experiencing rapid growth.

“I worked harder in this job in two years than I ever worked in any job I've had before,” a former employee who worked in operations said. “The potential of the industry was great. But the execution of the company was terrible.”

A duotone illustration collage of multiple employees receiving and reading a termination letter on varied devices. The center features a person with a distressed desk. One collage square shows a hand holding a phone that reads. “To All Employees of Mountain Express Oil and Its Affiliates: Despite…”
Virginia Gabrielli for Industry Dive

Ambitious growth plans

Three years ago, Mountain Express received accolades for its ambitious growth strategy, including being named one of the top private companies in Atlanta by the Atlanta Business Chronicle in 2021.

Two individuals, Mountain Express’ former co-CEOs, standing on a stairway for a portrait.
Turjo Wadud and Lamar Frady 
Retrieved from Mountain Express

Mountain Express’ growth was spearheaded by then co-CEOs Lamar Frady and Turjo Wadud, who both joined the company in 2003 in senior management roles and became the co-owners and CEOs in March 2020. Their goal when taking over was to grow Mountain Express “into a multimillion dollar business,” according to the company’s Chapter 11 bankruptcy declaration filed by its chief restructuring officer.

According to multiple ex-employees, Frady and Wadud aspired to not only grow the company’s fuel supply footprint, but take Mountain Express public and sell a billion gallons of gasoline in the process.

But Frady and Wadud wanted to go even bigger still, pushing into areas Mountain Express had never been before. They wanted to turn the company — which had only been a fuel supplier since it was founded in 2000 — into a full-fledged retail operator.

Wadud and Frady did not respond to several requests to be interviewed for this story. Their attorneys declined to comment.

“Instead of staying a dealer-only jobber, they moved to go into retail,” one ex-employee who worked in operations said. “And that is what put the nail in the coffin, if you ask me.”

In June 2021, the company entered into a $1 billion agreement with real estate investment trust Oak Street Capital — the same firm that has funded acquisitions for GPM Investments, the c-store arm of Arko — in which Oak Street would finance Mountain Express’ acquisitions of c-stores and travel centers via sale-leaseback transactions. 

For more than a year after this agreement, Oak Street funded Mountain Express’ acquisitions of 286 properties across 60 sale-leaseback deals totalling more than $825 million, the Chapter 11 declaration shows. 

Oak Street did not respond by press time when reached to comment for this story.

How Mountain Express' sale-leaseback strategy failed


Sale-leasebacks, common practice in the c-store space, give retailers liquid capital that was once tied into their real estate, allowing operators to use these funds as they continue running their locations. Where did Mountain Express go wrong? Scroll down

Mountain Express undoubtedly made sizable profits from buying and selling locations.

But before buying locations, Mountain Express didn’t properly conduct initial site inspections for repair needs and environmental compliance.

In many of its deals, Mountain Express became responsible for repairs. However, two former employees noted that the company either took months to begin the work to these locations or ignored these responsibilities altogether.

Sources said Mountain Express wasn’t investing in repairing and remodeling the stores.

This, in turn, made the stores undesirable for shoppers and thus could not generate enough sales for its company-operated locations.

And in locations that were sublet, subtenants couldn't generate enough income for Mountain Express to pay the rent.

Amid all of this, some locations were vacant — neither operated nor sublet, just bleeding money.

One of its notable acquisitions was of Brothers Food Mart, New Orleans’ largest c-store chain, which it acquired in October 2021. Mountain Express planned to introduce the 50-store brand to several new markets, such as Atlanta, Dallas and Memphis, and open as many as 100 more locations. 

The following summer, Mountain Express acquired 25 convenience stores in Wisconsin and Michigan from convenience retailer and tire and auto services company Team Schierl Companies.

Beyond these noteworthy deals and several other acquisitions, Mountain Express started purchasing individual stores and small chains from REITs.

According to the Chapter 11 declaration, Oak Street “never raised any concerns with the speed at which” Mountain Express was acquiring stores and “continued to make hundreds of millions of dollars available” for Mountain Express to continue growing.

However, many Mountain Express employees at the time were worried about the pace at which the company was growing, as well as the fact that leadership had no experience with traditional retail operations, which requires “a totally different mindset” than fuel distribution, a former employee who worked in operations said.

One ex-employee, who was brought onto Mountain Express’ finance team to help integrate the Brothers locations in New Orleans, said the lack of expertise needed to run retail stores was apparent from the start.

“It was clear very quickly when I stepped in the depth of the hole that I was having to inherit,” the former finance employee said.

This same employee noted that acquisition decisions were often poorly planned and executed. He would often see “transaction cycle missteps” by Mountain Express, including a lack of preparedness and knowledge of the assets they were acquiring. 

“I’m supposed to, say, integrate another 10-store chain, and everybody’s looking at each other like, ‘What’s the deal? What’s the structure?’” he said.

While it acquired stores at a rapid clip, Mountain Express proved itself to be an extremely poor retail operator, several ex-employees said.

For example, the Brothers stores were “way behind” technologically, and only one of those 50 locations ever reached brand compliance, the former finance employee said.

Additionally, Mountain Express didn’t properly conduct initial site inspections for repair needs and environmental compliance, multiple ex-employees said. 

“When you buy [a store], you investigate everything to see if they have any environmental issues, any building issues, any type of issues with the city, where they are and stuff like that,” a former employee who worked in operations said. “We didn't do [any] of those.”

Mountain Express was often responsible for repairs to the locations it oversaw with subtenants. Two ex-employees said that despite the company’s initial commitment to making repairs for various stores, Mountain Express either took months to begin the work or ignored these responsibilities altogether.

The inside of a convenience store with a broken cash register and empty shelves.
Inside a shuttered Brothers Food Mart in New Orleans, La., on March 20, 2024.
Brett Dworski/C-Store Dive
Following Mountain Express’s shift to Chapter 7 in August of 2023, the bankruptcy court shared that multiple Brothers Food Mart locations near New Orleans had been ransacked.
U.S. Bankruptcy Court for the Southern District of Texas

Upon acquiring the 25 convenience stores from Team Schierl Companies in 2022, Mountain Express agreed to reimburse Schierl for repairs done to these stores. According to a court document filed in early July 2023 by Schierl and its attorneys, Mountain Express owed Schierl over $367,000 in reimbursable repair expenses, which included plumbing, electrical and air conditioning maintenance.

As of late September, Mountain Express had still not paid for this work, another court document filed by Schierl and its attorneys shows. Schierl did not respond by press time when reached to offer an update on this reimbursement.

“They weren’t doing a damn thing to [the stores],” another ex-employee who worked in operations said, referring to Mountain Express’ inattentiveness to repair work.

A single-store owner who purchased a location from Mountain Express in 2022 experienced similar headaches. 

When the deal for the location closed, Mountain Express contractually committed to making about $150,000 worth of upgrades to the location. Months went by with nothing done, according to the store owner, who asked to remain anonymous to avoid retaliation.

After almost a year and several attempts to reach management, work on the site finally began, but quickly fizzled out when Mountain Express filed for bankruptcy, the store owner said. 

Mountain Express stopped responding to the owner. “At that point, I realized they’re not going to do any more work on the site,” the store owner said. “So whatever they told me they had done that winter, that was it. And that’s all they had done.”

John Canchola, who acquired his Oklahoma City-based store from Mountain Express in July 2022 for $1.2 million, said that when he and his father purchased the location, it was in terrible condition. Cable wires were dangling from the ceiling, gas lines were exposed and the restaurant “was in shambles,” he noted.

At the time, Canchola didn’t quibble, since the store’s master lease agreement — which C-Store Dive obtained a copy of — stated that Mountain Express would maintain and upgrade the property at its own expense. 

“They sold us on the premise that it was already under construction,” Canchola said.

However, that wasn’t the case. Mountain Express “never touched the store,” which has remained vacant from the moment Canchola purchased it, he said. 

When he and his father were in the buying process earlier that summer, Mountain Express’ broker, The Kase Group, confirmed that all the permits needed to operate the location “were good to go,” Canchola said. 

But four months after purchasing the store, Canchola was slapped with a violation from the Oklahoma Corporation Commission for having failed to register the location’s underground fuel tanks. 

“I’m getting these letters from the OCC and they’re saying, ‘Okay, since you’re the new owner, these are the past violations,’” Canchola said. “And I went, ‘Oh my God, what is going on?’”

A duotone illustration of the inside of a convenience store that is in disarray. Wires dangle from the ceiling, and shelves are broken in the interior, while the exterior glass walls depict a perfect
Virginia Gabrielli for Industry Dive

Questionable decision making

Multiple ex-employees said that Mountain Express’ inattentiveness to store repairs was mainly due to financial constraints, noting that leadership often did not have the funds to make various fixes.

Getting the funds to fix a broken air conditioner, for example, was “like pulling teeth,” one of the ex-employees who worked in operations noted.

“They just didn’t have enough operating capital to run the stores correctly,” he said.

But why did a company with so much funding not have the capital to make simple improvements and repairs? 

Several sources, including every interviewed former Mountain Express employee and attorneys involved in its bankruptcy case, have questioned the processes behind the company’s acquisition strategy.

According to its Chapter 11 declaration and several ex-employees, Mountain Express would acquire sites and almost immediately resell them to “third-party investment vehicles,” often REITs. The REITs then would lease the locations back to Mountain Express via long-term agreements, with Mountain Express’ fuel distribution business providing the fuel to the sites.

According to several sources with direct knowledge of the matter, Mountain Express would quickly flip the properties it had just acquired for a considerably larger price than what it had just spent days — or sometimes hours — before.

For example, on June 15, 2021, Mountain Express acquired a convenience store in Shelby County, Tennessee, for $430,000. Later that day, Mountain Express sold that same property in a sale-leaseback deal to a REIT for $960,000, according to Shelby County records.

Despite the large gains from these transactions, Mountain Express could not afford the monthly rents it agreed upon in many of the deals, several former employees said. This was mainly because Mountain Express wasn’t investing in repairing and remodeling the stores which, in turn, made them undesirable for shoppers and thus could not generate enough sales to hit their monthly numbers.

Mountain Express had leased 71 stores from AR Global Investments, a real estate asset firm, since 2018. Those leases were terminated during the retailer’s bankruptcy proceedings, according to AR’s 10-Q SEC filing from August. 

One ex-employee who worked in operations noted that many of these AR-leased locations were quite short on rent.

“On some of those properties, just as an example, we were paying $175,000 a year for leases, and we were probably only getting $90,000 in rent,” he said. “We were upside down on so many leases.”

A duotone illustration of money floating in the air, two hands each holding a gas pump on both sides of a person holding a wad of cash dressed in business attire.
Virginia Gabrielli for Industry Dive

Financial mismanagement

Mountain Express’ lack of funds was due to more than just the poor performance of its stores. Financial statements and court filings from its trustee indicate that Mountain Express’ leadership — including Frady and Wadud — was using the business to funnel money to various entities they own.

According to Mountain Express’ statement of financial affairs, the company made hundreds of payments to various entities, referred to as “insiders” in the financial documents, over the previous year prior to filing for bankruptcy.

A diagram describing the relationship between the Mountain Express, its CEOs, and the vendor businesses the CEOs own.
Optional Caption
Jasmine Ye Han/C-Store Dive

Many of those entities were either partly or completely co-owned by Frady and Wadud. Companies called Time and Water LLC, Adelphi Transport LLC and Red Mountain Fuels Transport LLC were each 100% owned by Frady and Wadud. Another entity, 4Court Holdings LLC, was one-third owned by Frady and another third by Wadud, according to the statement of financial affairs.

Although these entities are under the ownership of Frady and Wadud, they are not under Mountain Express’ corporate umbrella in any way, according to the company’s organization chart found in the Chapter 11 declaration.

During an August 2023 court hearing shortly before the bankruptcy case shifted to Chapter 7, an attorney representing one of Mountain Express’ lenders said that a former Mountain Express employee, as well as a pre-bankruptcy seller of retail assets to Mountain Express, informed him that Mountain Express’ leadership “enriched themselves” at the expense of the company, referring to the “insider” payments made to companies like 4Court, Time and Water, and others.

“It's uncontested that millions of dollars were paid out to the debtors’ insiders within one year prior to the petition date,” John Elrod, co-chair for law firm Greenberg Traurig’s Atlanta Financial Restructuring Group, who was representing Mountain Express’ lender First Horizon Bank, said during the hearing. “The debtors have undertaken no substantive investigation of those transactions whatsoever.” 

Elrod’s accusation that Mountain Express did not investigate those transactions aligns with what one ex-employee, who worked in the finance department, noticed. 

This former finance employee said that in 2021, Mountain Express was working with a small audit firm to get its finances in order, but that the audit failed due to a lack of financial records kept by Mountain Express.

When it came to 2022, Mountain Express’ financials were unable to be audited, the former finance employee noted.

“It was the worst-looking audit I had seen… an auditor can’t necessarily audit something with almost no records,” he said.

During that same August court hearing, Elrod also said that no formal review of any of Mountain Express’ sale-leaseback transactions, including those with Oak Street, was conducted to see if they were problematic.

“Just the basic review of your garden variety trade preference claims — none of that has been done either,” Elrod said.

According to property records and multiple ex-employees, some of Mountain Express’ deals were not made in the name of the company, but instead in the name of some of the entities Frady and Wadud owned.

It was the worst-looking audit I had seen… an auditor can’t necessarily audit something with almost no records.

Former finance employee

Mountain Express

When Mountain Express sold the c-store in Shelby County in June 2021, instead of Frady or Wadud, a person named Hunter Smith signed off as the authorized member on the seller's part of the $960,000 deal.

According to all four ex-employees and public information, Smith owns the final third of 4Court Holdings alongside Frady and Wadud’s two-thirds.

Smith did not respond to several requests to be interviewed for this story.

“You’ve got to understand that [properties] were bought and sold separate from the company so the money would flow into the pockets of the people that were making the deals,” one former employee who worked in operations said.

That’s not to say some of these vendor payments weren’t legitimate. 4Court, for example, is split into several divisions that focus on fueling equipment, store branding and other retail elements. Mountain Express leased equipment from 4Court for 148 stores between September 2021 and February 2023, paying nearly $267,000 per month, according to a September 2023 motion to reject those equipment leases.

While those leases have since been terminated, sources confirmed that 4Court supplied a lot of equipment to Mountain Express’ stores.

However, other payments made from Mountain Express to several of these entities haven’t been as clear.

One source who worked in Mountain Express’ finance department said they believe Mountain Express purposefully overpaid vendors like 4Court and Time and Water so Frady and Wadud could profit.

This same source said that this method of “shelling” money between entities — often called related-party transactions — is a common method businesses may use to “scuttle off some money or do some inappropriate things.” 

Such transactions can also be indications of fraud, according to the National Association of Certified Valuators and Analysts’ Journal of Forensic and Investigative Accounting.

Related-party transactions are not illegal on their face, but if used for fraud or other illicit dealings, may lead to civil penalties or other types of legal remedies, said Lloyd Lim, partner for Kean Miller LLP, the law firm that represented GSS Holdings — one of the retailers that received fuel from Mountain Express — during the bankruptcy case.

One example of a similar case was the 2001 accounting scandal at Enron. The American energy company used related entities to hide large amounts of debt from its investors and creditors. Some people involved in the case went to prison for securities fraud, wire fraud and insider trading.

Although the Enron scenario involves using related parties to hide debt instead of profiting specific individuals, the basic framework is the same — using an entity of common control for financial gain, one former Mountain Express employee who worked in the finance department said. 

Frady’s and Wadud’s questionable financial activity reemerged in March 2024 when a court document filed by Mountain Express’ Chapter 7 bankruptcy trustee revealed that she was investigating the two executives for “the potential siphoning of millions of dollars” from the company into separate entities they own. 

According to the document, this siphoning may have been connected to the 60 sale-leaseback transactions Mountain Express made during its rapid growth phase in 2021 and 2022. Specifically, it notes that at the closing of many of these deals, Frady and Wadud would “cause funds to be wired” to their side companies as fees for work they performed while locating and conducting due diligence on properties.

For instance, in September 2021, two entities owned by Frady and Wadud each received $875,000 in connection with a sale-leaseback transaction. About a month later, those entities received another $875,000 after another deal was made, the document notes.

According to the court document, those entities were called Illuminous, which is 100% owned by Wadud; and Indepth, which is 100% owned by Frady.

A duotone illustration of a person looking through the blinds of an office window and seeing two silhouettes of individuals shaking hands and holding briefcases.
Virginia Gabrielli for Industry Dive

A culture of dysfunction

Mountain Express’ demise wasn’t only due to bad business decisions, but also to a secretive and unhealthy company culture, several former employees said.

Every ex-employee interviewed for this story said that leadership rarely communicated company initiatives throughout the organization. When Frady and Wadud would make a deal or plan for a market expansion, only their closest confidants knew what was happening, sources said.

“There was no communication structure within the organization — things did not cascade down from the top,” one of the ex-employees who worked in operations said. “Everything was tightly held. We were all compartmentalized.”

That same former employee said the lack of communication caused a certain “uneasiness and doubt” that lingered throughout the company, which continued when Mountain Express filed for bankruptcy.

“We were being told that we were going to come out of this and we were going to be just fine,” he said. “We were told that Turjo had the financial backing to take back the company.”

Another former employee, who worked in finance, recalled multiple instances when someone who they didn’t know would show up in their office to retrieve sales information for an unknown transaction.

“It was like, ‘Who are you? Oh, no, they didn't give me the memo. I didn't even realize those stores were being divested today,’” they said.

That lack of transparency also bled into the company’s bankruptcy proceedings. 

Lim, who was directly involved in the bankruptcy case, said Mountain Express and its counsel were “very close to the vest” and didn’t offer much transparency to other parties. That lack of transparency eventually got out of hand, to the point where Mountain Express was in too deep a hole to dig themselves out, resulting in the failed $49 million outright sale to Arko.

“It’s just such an epic failure… it’s probably one of the worst [bankruptcy] cases I’ve ever seen,” Lim said.

Another former employee who worked in operations said team members raised the issue of poor communication to leadership on multiple conference calls, only to be ignored.

The disconnect between leadership and the rest of the company wasn’t the only dysfunction within Mountain Express. Several ex-employees said that Frady’s personality created an unhealthy company culture. A former finance team member specifically referred to Frady’s personality as “reactionary and energized.”

Much of Mountain Express’ ambitious growth plan during those few years was tied to Frady’s intense persona, which wasn’t conducive to running the business, this same former finance employee said. 

Multiple ex-employees said that Frady would often scream during company meetings. One ex-employee who worked in the finance department specifically noted that Frady would berate team members over things like taking their time to review company materials or financial information amid an acquisition. This same employee also said that Frady often “couldn’t be corralled” when he had his mind set on something.

“We would have certain company meetings, and Lamar would scream as loud as possible,” another ex-employee, who also worked in the finance department, said. “It was pretty bad.”

A duotone collage illustration of several magnifying glasses zooming in on people at their computers, the outside of a c-store, and someone on the phone. The main magnifying glass depicts a person att
Virginia Gabrielli for Industry Dive

What’s next for Mountain Express?

Since Mountain Express shifted to Chapter 7 bankruptcy in August — about a week after its proposed sale to Arko failed — the company’s trustee has liquidated many of its property rights, fuel supply agreements and equipment leases. 

However, there’s still a long road ahead until this situation is resolved, said Ted Gavin, managing director and founding partner of bankruptcy consultancy Gavin/Solmonese.

It’s just such an epic failure… it’s probably one of the worst [bankruptcy] cases I’ve ever seen.

Lloyd Lim

Partner, Kean Miller LLP

According to several updates in Mountain Express’ bankruptcy court docket, the trustee has undertaken several claims analyses and will likely look to recover monies Mountain Express paid to certain entities within 90 days or a year of filing for bankruptcy — a process which may take years, Gavin said.

Meanwhile, Lim said he thinks that one of the largest set of claims will come against Mountain Express’s former management.

“I fully expect the Chapter 7 trustee to begin suing those folks and to try to recover as much as she can for mismanagement and other things like that,” Lim said.

Mountain Express’ bankruptcy trustee and First Horizon Bank have conducted multiple “examinations” of Wadud and Frady over the past several months under the Federal Bankruptcy procedure. The executives have been required to address various elements of Mountain Express’ activity over the past few years. Topics included the company’s corporate governance, its accounting and auditing done between 2017 and 2023, its financial records, other business entities either man owns or controls, and Mountain Express’ acquisition history.

Also among those topics was any funds Frady and Wadud received directly or indirectly from Mountain Express between 2017 and the bankruptcy filing.

As of April 2024, there are currently no updates from the court regarding any results from these examinations.

These examinations could be “the precursor to other motions or future litigation,” said Gavin.

Amid the accusations of financial mishandling and dysfunctional leadership, Frady and Wadud already seem to have their sights set on the future. Several sources said that they heard the two executives are starting a new company.

When asked if they’d work for a newly created venture under Frady and Wadud if given the chance, one former Mountain Express employee, who worked in operations, didn’t hesitate.

“I’d starve first.”

News Graphics Developer Julia Himmel also contributed to this story.