United States Bankruptcy Court District of Delaware

Case 20-10161-LSS Doc 7 Filed 01/27/20 Page 1 of 21

UNITED STATES BANKRUPTCY COURT DISTRICT OF DELAWARE

In re Chapter 11

AMERICAN BLUE RIBBON HOLDINGS, LLC, Case No.: 20-10161 (___) a Delaware limited liability company, et al.,1 (Joint Administration Requested) Debtors.

DEBTORS’ MOTION FOR ENTRY OF AN ORDER AUTHORIZING MAINTENANCE, ADMINISTRATION, AND CONTINUATION OF CERTAIN CUSTOMER PROGRAMS

American Blue Ribbon Holdings, LLC and its affiliated debtors and debtors in possession

(the “Debtors”) in the above-captioned chapter 11 cases (the “Cases”) hereby move the Court

(the “Motion”) for entry of an order, substantially in the form attached hereto as Exhibit A (the

“Proposed Order”), pursuant to sections 105(a) and 363(b) of title 11 of the United States Code,

11 U.S.C. § 101 et seq. (the “Bankruptcy Code”), and Rules 6003 and 6004 of the Federal Rules

of Bankruptcy Procedure (the “Bankruptcy Rules”), (i) authorizing the Debtors to maintain and

administer customer-related programs as described in the Motion (collectively, the “Customer

Programs”), and honor prepetition obligations to customers related thereto in the ordinary course

of business and in a manner consistent with past practice; (ii) authorizing the Debtors to

continue, replace, implement, modify, and/or terminate one or more of the Customer Programs,

in each case as the Debtors deem appropriate in their business judgment and in the ordinary

course of business, without further application to the Court; (iii) authorizing banks and other

financial institutions (the “Banks”) to honor and process check and electronic transfer requests

1 The Debtors and the last four digits of their respective federal taxpayer identification numbers are as follows: American Blue Ribbon Holdings, LLC (1224-Del.); Legendary Baking, LLC (2615-Del.); Legendary Baking Holdings, LLC (2790-Del.); Legendary Baking of California, LLC (1760-Del.); and SVCC, LLC (9984-Ariz.). The Debtors’ address is 3038 Sidco Drive, Nashville, TN 37204.

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related to the foregoing; and (iv) granting related relief. In support of the Motion, the Debtors

rely on the Declaration of Kurt Schnaubelt in Support of First Day Motions (the “First Day

Declaration”) filed substantially concurrently herewith. In further support of the Motion, the

Debtors respectfully represent as follows:

I. JURISDICTION

1. The United States Bankruptcy Court for the District of Delaware (the “Court”)

has jurisdiction over these Cases and the Motion pursuant to 28 U.S.C. §§ 157 and 1334, and the

Amended Standing Order of Reference from the United States District Court for the District of

Delaware dated as of February 29, 2012. This is a core proceeding within the meaning of

28 U.S.C. § 157(b)(2). Venue of these Cases and the Motion in this district is proper under

28 U.S.C. §§ 1408 and 1409.

2. Pursuant to Rule 9013-1(f) of the Local Rules of Bankruptcy Practice and

Procedure of the United States Bankruptcy Court for the District of Delaware (the “Local

Rules”), the Debtors consent to the Court’s entry of a final judgment or order with respect to the

Motion if it is determined that the Court, absent consent of the parties, cannot enter final orders

or judgments consistent with Article III of the United States Constitution.

3. The statutory and legal predicates for the relief requested herein are sections 105

and 363(b) of the Bankruptcy Code and Bankruptcy Rules 6003 and 6004.

II. BACKGROUND

4. On the date hereof (the “Petition Date”), each of the Debtors commenced a

voluntary case under chapter 11 of the Bankruptcy Code.

5. The Debtors are authorized to continue to operate their business and manage their

property as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code.

No trustee or examiner has been requested or appointed in the Cases and no statutory committee 25941367.2

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has been appointed yet by the Office of the United States Trustee for the District of Delaware

(the “U.S. Trustee”).

6. The Debtors’ business consists of three brands: (i) Village Inn, (ii) Bakers Square,

and (iii) Legendary Baking. Founded in 1958 and 1969, respectively, Village Inn and Bakers

Square are full-service sit-down family dining restaurant concepts (together, the “Family Dining

Business”) that feature a variety of menu items for all meal periods. As of the Petition Date, in

connection with the Family Dining Business, the Debtors operate 97 restaurants in 13 states,

franchise 84 Village Inn restaurants, and maintain an e-commerce presence as well.

7. Legendary Baking is the Debtors’ manufacturing operation that produces pies in

two Debtor-owned production facilities. Legendary Baking provides those pies to the Family

Dining Business for sale in Village Inn and Bakers Square restaurants while also selling pies to

other restaurants, independent bakers, and customers. In connection therewith, the Debtors own

and operate two bakery facilities located in Oak Forest, Illinois and Chaska, Minnesota, and

lease a cold storage distribution center located in Chicago, Illinois.

8. The Debtors’ revenues are primarily derived from restaurant sales, bakery

operations, and franchise fees and sales royalties. As discussed in detail in the First Day

Declaration, in the ordinary course of business, the Debtors engage in certain affiliate

transactions with their non-debtor parent, ABRH, LLC (“ABRH”), including relying on

employees provided by ABRH via a contract staffing arrangement, as well as on numerous

support services that are provided by ABRH and shared among the Debtors’ businesses and non-

debtor affiliates’ restaurant brands.

9. Several factors contributed to the Debtors’ financial distress and subsequent

bankruptcy filings, including (i) increased competition in the restaurant business, (ii) continuing

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margin pressure from rising labor costs (especially in states with many Debtor restaurants),

(iii) an increasing number of unprofitable restaurants (including due to unfavorable locations and

high occupancy costs), (iv) an overall decline in foot traffic in the restaurant industry, and

(v) despite a positive turn in 2019, financial performance of Legendary Baking.

10. As a result of the foregoing, the Debtors have sustained losses of approximately

$11 million in fiscal year 2018 and approximately $7 million in fiscal year 2019. The Debtors

were able to cover those losses using certain one-time cash flow sources and funding by ABRH

and other non-debtor affiliates, but projections for fiscal year 2020 indicate continued losses,

which ABRH and the Debtors’ other affiliate companies are no longer willing to fund.

11. To reduce losses, shortly before the Petition Date the Debtors ceased operations at

33 underperforming restaurants (in addition to 17 locations that had closed in the past two years)

and executed a reduction-in-force of approximately 1,100 individuals. However, despite those

measures, in the absence of continued funding by ABRH or otherwise, the Debtors projected that

they would face a liquidity crisis on or about the Petition Date. Accordingly, in an effort to avert

continued losses and avoid further deterioration of the businesses, the Debtors have filed these

Cases to (i) explore strategic options while under the protection of the Bankruptcy Code,

including through focusing the Family Dining Business on the remaining store locations; and

(ii) obtain postpetition financing that will provide sufficient liquidity for the Debtors to fund their

operations during these Cases.

12. To meet those objectives, the Debtors and their non-debtor affiliate Cannae

Holdings, Inc. (“Cannae”) agreed on that certain Senior Secured, Superpriority Debtor-in-

Possession Credit Agreement that provides for a senior secured credit facility (the “DIP

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Facility”) of up to $20 million, which should permit the Debtors to meet their obligations in

these Cases.

13. The detailed factual background relating to the Debtors and the commencement of

these Cases is set forth in the First Day Declaration.

III. RELIEF REQUESTED

14. By this Motion, the Debtors seek entry of the Proposed Order, pursuant to

Bankruptcy Code sections 105 and 363(b) and Bankruptcy Rules 6003 and 6004, (i) authorizing

the Debtors to maintain and administer the Customer Programs, and honor prepetition

obligations to customers related thereto in their discretion in the ordinary course of business and

in a manner consistent with past practice; (ii) authorizing the Debtors to continue, replace,

implement, modify, and/or terminate one or more of the Customer Programs, in each case as the

Debtors deem appropriate in their business judgment and in the ordinary course of business,

without further application to the Court; (iii) authorizing the Banks to honor and process check

and electronic transfer requests related to the foregoing; and (iv) granting related relief.

15. Maintaining the loyalty, support, and goodwill of their customers is critical to the

Debtors’ reorganization efforts. In short, the Debtors must maintain positive customer

relationships and a reputation for reliability to ensure customer satisfaction in a highly

competitive industry. Achieving these goals is particularly important while operating in chapter

11. In the ordinary course of business, the Debtors provide customers with certain Customer

Programs that engender goodwill, maintain loyalty, increase the Debtors’ sales opportunities, and

provide the Debtors a comparative advantage over their competition. Specifically, the Customer

Programs relate to the Debtors’ programs by which they offer gift cards, coupons, and other

promotions to their customers, as well as processing customer purchases through the use of

credit cards. The Debtors believe that their ability to continue the Customer Programs and to 25941367.2

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honor their obligations thereunder in the ordinary course of business is necessary to, among other

things, (i) retain their reputation for reliability, (ii) meet competitive market pressures,

(iii) maintain positive customer relationships, and (iv) ensure customer satisfaction, thereby

retaining current customers, attracting new ones, and, ultimately, enhancing revenue and

profitability for the benefit of all the Debtors’ stakeholders.

A. Gift Cards

16. As discussed above, the Debtors operate two restaurant chains, Village Inn and

Bakers Square. In the ordinary course of business, the Debtors sell gift cards for each restaurant

(collectively, the “Gift Cards”) to customers in amounts ranging from $5 to $200. Customers

can purchase Gift Cards for each restaurant chain at a restaurant location for that chain, online at

their respective websites, bakerssquare.com and villageinn.com, and at various retail outlets

where gift cards are sold. Gift Cards can be used for eat-in or take-out dining at the Debtors’

restaurant locations, including franchisee-operated locations.2 Gift card programs of this nature

are commonplace and popular in the dining industry, and the Debtors’ competitors offer similar

programs to their customers.

17. The Debtors rely on Worldpay, Inc. (f/k/a Vantiv) (“Worldpay”) to track and

process Gift Cards in the ordinary course of business. The Debtors pay Worldpay approximately

$10,000 in the aggregate per year for these services, which amount is deducted by Worldpay

from Gift Card sales. The Debtors receive the net Gift Card sales less the processing fees

deducted by Worldpay.

2 For the avoidance of doubt, Gift Cards are not interchangeable among the two restaurant chains. Rather, Village Inn Gift Cards can only be purchased from Village Inn locations and from Village Inn’s website, and can only be used at Village Inn locations; and Bakers Square Gift Cards can only be purchased from Bakers Square locations and from Bakers Square’s website, and can only be used at Bakers Square locations.

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18. As of December 29, 2019, the Debtors’ books and records reflect an aggregate net

liability in respect of Gift Cards of approximately $1,754,000 for Village Inn Gift Cards and

approximately $445,000 for Bakers Square Gift Cards. The Debtors request authority, in their

sole discretion, (i) to honor all Gift Cards purchased prior to the Petition Date, (ii) to continue

selling and honoring Gift Cards in the ordinary course of business, and (iii) to allow Worldpay to

continue to process the Gift Cards, including deducting fees, in the ordinary course of business.

B. Fundraising Programs

19. In addition, the Debtors also offer customers and members of the community the

opportunity to raise funds for organizations, events, and causes through two different fundraising

programs maintained at both the Village Inn and the Bakers Square restaurant chains. These

programs engender goodwill in local communities by associating the Debtors’ restaurants with

charitable causes and community organizations. They also help to drive customers to the

Debtors’ restaurants and to introduce new customers to the Debtors’ brands.

20. One such program is the Sweet Returns program, whereby the Debtors sell cards

(the “Sweet Returns Cards”) which are redeemable at the Debtors’ restaurants for one whole pie.

Pursuant to this program, Debtor SVCC, LLC issues Sweet Returns Cards at discounted rates to

members of the public, and in turn, those members of the public then re-sell the Sweet Returns

Cards for a higher price and retain the delta to raise funds for an organization, event, or cause.

Sweet Returns Cards may be purchased for each restaurant chain at a restaurant location for that

chain and online at their respective websites.

21. As of December 29, 2019, the Debtors’ books and records reflect an aggregate net

liability in respect of Sweet Returns Cards of approximately $609,000 for Village Inn Sweet

Returns Cards,and approximately $571,000 for Bakers Square Sweet Returns Cards. The

Debtors request authority, in their sole discretion, (i) to honor all Sweet Returns Cards purchased 25941367.2

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prior to the Petition Date, and (ii) to continue selling and honoring Sweet Returns Cards in the

ordinary course of business.

22. The other fundraising program is the Raising Forks for Funds program (“Raising

Forks”). Pursuant to this program, customers may submit applications to host a fundraising

event for a qualifying organization at one of the Debtors’ Village Inn or Bakers Square restaurant

locations. If the event is approved, the Debtors then contribute 20% of the total bill for the event

back to the participating organization. Typically, the donation amount is mailed to the

participating organization approximately three weeks after the event.

23. During 2019, a total of $17,000 in the aggregate was paid by the Debtors for

Raising Forks. Due to the timing of the events and the minimal amount of money involved, the

Debtors do not accrue for this liability on a monthly basis, but rather process donations as they

are requested. The Debtors request authority, in their sole discretion, (i) to remit all Raising

Forks donations accrued prior to the Petition Date, and (ii) to continue offering Raising Forks

fundraising events and honoring Raising Forks donation commitments in the ordinary course of

business.

C. Promotions

24. The Debtors offer various promotional offers to customers throughout the year

(collectively, the “Promotions”). The Promotions are aimed at driving sales, maintaining market

competitiveness, and building brand loyalty. The Debtors offer various in-restaurant and online

promotions that provide discounts to customers, such as giveaways, “$5 dollars off,” “buy-one-

get-one-free,” and “gift with purchase” promotions. In addition, the Debtors offer customers the

ability to enroll in the Debtors’ “eClub,” a promotional email subscription for each of the

Debtors’ restaurant chains. Customers who enroll in the eClub receive emails regarding deals,

coupons, and promotions, as well as restaurant news such as events and new menu items. 25941367.2

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25. The Promotions are similar to those routinely offered by the Debtors’ competitors in

the dining industry. The Debtors seek authority to honor Promotions issued prepetition,

consistent with past practices, and to continue offering these Promotions in the ordinary course

of business during the pendency of these Cases.

D. Credit Card and Other Payment Processors

26. In addition to cash, the Debtors accept other methods of payment from customers

at their point of sale, including credit cards, PayPal, and checks. The Debtors also offer delivery

from their restaurant locations through third-party delivery services, such as Grub Hub and Door

Dash. In addition, the Debtors accept online orders facilitated by Mobo Systems, Inc. (d/b/a

Olo). For all methods of non-cash or check payment, the Debtors receive the net customer sales

less any chargebacks and processing fees charged. The processing fees charged by each

company vary, but are in the range of 1% to 4% for credit card companies, and 18% to 23% for

the delivery and online ordering service providers. The fees that are owing to these companies

are set off from the funds that are remitted to the Debtors on a daily or weekly basis.

27. Maintaining the use of credit cards and other payment mechanisms is essential to

the continuing operation of the Debtors’ business because the vast majority of the Debtors’ sales

are made using non-cash payment methods. By this Motion, the Debtors request authority, in

their sole discretion, to allow these companies to continue to process the customer payments,

including deducting chargebacks and processing fees, in the ordinary course of business.

IV. BASIS FOR RELIEF

A. Honoring Customer Program Commitments is Warranted under Sections 105(a) and 363(b) of the Bankruptcy Code

28. The Court may grant the relief requested herein pursuant to section 363 of the

Bankruptcy Code. Section 363 of the Bankruptcy Code provides, in relevant part, that “[t]he

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[debtor], after notice and a hearing, may use, sell, or lease, other than in the ordinary course of

business, property of the estate.” 11 U.S.C. § 363(b)(l). Under this section, a court may

authorize a debtor to pay certain prepetition claims. See In re Ionosphere Clubs, Inc.,

98 B.R. 174, 175 (Bankr. S.D.N.Y. 1989) (discussing prior order authorizing payment of

prepetition wage claims pursuant to section 363(b) of the Bankruptcy Code). To do so, “the

debtor must articulate some business justification, other than the mere appeasement of major

creditors.” Id.

29. In addition, the Court may authorize payment of prepetition claims in appropriate

circumstances based on section 105(a) of the Bankruptcy Code. Section 105(a) of the

Bankruptcy Code, which codifies the equitable powers of the bankruptcy court, empowers the

court to “issue any order, process, or judgment that is necessary or appropriate to carry out the

provisions of this title.” 11 U.S.C. § 105(a). Under section 105(a), courts may permit pre-plan

payments of prepetition obligations when essential to the continued operation of a debtor’s

business. Ionosphere Clubs, 98 B.R. at 175. Specifically, the Court may use its power under

section 105(a) to authorize payment of prepetition obligations pursuant to the “doctrine of

necessity.” Id., at 175-76.

30. The United States Court of Appeals for the Third Circuit recognized the doctrine

of necessity in In re Lehigh & New England Railway. Co., 657 F.2d 570, 581 (3d Cir. 1981).

The Third Circuit held that a court could authorize the payment of prepetition claims if such

payment was essential to the continued operation of the debtor. Id. (stating courts may authorize

payment of prepetition claims when there “is the possibility that the creditor will employ an

immediate economic sanction, failing such payment”); see also In re Penn Cent. Transp. Co.,

467 F.2d 100, 102 n.1 (3d Cir. 1972) (recognizing necessity of payment doctrine permits

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“immediate payment of claims of creditors where those creditors will not supply services or

material essential to the conduct of the business until their pre-reorganization claims shall have

been paid”); In re Just for Feet, Inc., 242 B.R. 821, 824–25 (Bankr. D. Del. 1999) (noting that, in

the Third Circuit, debtors may pay prepetition claims that are essential to continued operation of

business); In re Columbia Gas Sys., Inc., 171 B.R. 189, 191-92 (Bankr. D. Del. 1994) (same).

31. The rationale for the doctrine of necessity—the rehabilitation of a debtor in

reorganization cases—is “the paramount policy and goal of Chapter 11.” Ionosphere Clubs,

98 B.R. at 176; see also Just for Feet, 242 B.R. at 826 (finding that payment of prepetition

claims to certain trade vendors was “essential to the survival of the debtor during the chapter

11 reorganization.”); In re Quality Interiors, Inc., 127 B.R. 391, 396 (Bankr. N.D. Ohio 1991)

(“[P]ayment by a debtor-in-possession of pre-petition claims outside of a confirmed plan of

reorganization is generally prohibited by the Bankruptcy Code,” but “[a] general practice has

developed . . . where bankruptcy courts permit the payment of certain pre-petition claims,

pursuant to 11 U.S.C. § 105, where the debtor will be unable to reorganize without such

payment.”); In re Eagle-Picher Indus., Inc., 124 B.R. 1021, 1023 (Bankr. S.D. Ohio 1991)

(approving payment of prepetition unsecured claims of tool makers as “necessary to avert a

serious threat to the Chapter 11 process.”); Burchinal v. Cent. Wash. Bank (In re Adams Apple,

Inc.), 829 F.2d 1484, 1490 (9th Cir. 1987) (recognizing that allowance of “unequal treatment of

pre-petition debts when necessary for rehabilitation . . .” is appropriate); Mich. Bureau of

Workers’ Disability Comp. v. Chateaugay Corp. (In re Chateaugay Corp.), 80 B.R. 279, 287

(S.D.N.Y. 1987) (authorizing payment of prepetition workers’ compensation claims on grounds

that the fundamental purpose of reorganization and equity powers of bankruptcy courts “is to

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create a flexible mechanism that will permit the greatest likelihood of survival of the debtor and

payment of creditors in full or at least proportionately.”).

32. Accordingly, the Court has authority to authorize the Debtors to continue the

Customer Programs, and pay prepetition claims arising thereunder, pursuant to sections 363(b)

and 105(a) of the Bankruptcy Code.

33. The Customer Programs are standard in the dining industry. If the Debtors are

unable to honor or continue their Customer Programs, their ability to conduct business, generate

sales, and successfully prosecute these Cases will be severely hampered. On the other hand,

continuing to administer their Customer Programs without interruption during the pendency of

these Cases will help preserve the Debtors’ valuable customer relationships and goodwill, which

will inure to the benefit of all of the Debtors’ stakeholders, and further the Debtors’ efforts to

maximize value through these Cases.

34. Moreover, failure to continue the Customer Programs may subject the Debtors to

liability for deceptive trade practices. Most, if not all, of the states in which the Debtors conduct

their business have enacted statutes declaring unlawful any deceptive trade practices by any

business being conducted in that state. The Debtors’ customers expect that the Debtors will

honor the Customer Programs prior to the Petition Date, and rely on such representations when

making purchases and participating in the Customer Programs. Thus, it is necessary for the

Debtors to continue the Customer Programs in order to, among other things, avoid potential

liability for claims arising out of state consumer protection laws.

35. The Debtors submit that the substantial benefit conferred on the Debtors’ estates

by the Customer Programs substantially outweighs the costs associated with the Customer

Programs. Accordingly, the Debtors respectfully request the authority to continue their

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Customer Programs and honor prepetition commitments related thereto, all in the Debtors’ sole

discretion. In addition, the Debtors respectfully request authority to continue, replace,

implement, modify, and/or terminate one or more of the Customer Programs, in each case as the

Debtors deem appropriate in their business judgment and in the ordinary course of business,

without further application to the Court.

B. Processing of Checks and Electronic Fund Transfers Should be Authorized

36. The Debtors have sufficient funds to pay any amounts related to the Customer

Programs in the ordinary course of business. Under the Debtors’ existing cash management

system, the Debtors have made arrangements to readily identify checks or wire transfer requests

relating to the Customer Programs, as applicable. The Debtors believe there is minimal risk that

checks or wire transfer requests that the Court has not authorized will be inadvertently

made. Thus, the Debtors request that the Court authorize all applicable Banks to receive,

process, honor, and pay any and all checks or wire transfer requests in respect of the Customer

Programs.

V. IMMEDIATE RELIEF IS NECESSARY

37. Bankruptcy Rule 6003 provides that the relief requested in this Motion may be

granted if the “relief is necessary to avoid immediate and irreparable harm.” Fed. R. Bankr. P.

6003. There is no question that the Debtors’ failure to honor their Customer Programs would

likely result in immediate and irreparable harm to the Debtors’ customer relations. As discussed

above and in the First Day Declaration, the Customer Programs are essential to the Debtors’

success in retaining customer satisfaction, sustaining goodwill, and ensuring that the Debtors

remain competitive notwithstanding the commencement of these Cases. Restricting or canceling

the Customer Programs or failing to satisfy any obligations related thereto could jeopardize the

Debtors’ customer relationships, and irreparably harm the Debtors’ reputation and ability to 25941367.2

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assure that customers continue to patronize their business. Thus, if the relief requested herein is

not granted, the Debtors’ failure to honor and support the Customer Programs and satisfy the

obligations related thereto would cause the Debtors’ estates immediate and irreparable harm by

detracting and distracting from the Debtors’ efforts to reorganize. For these reasons, and for the

reasons set forth above, the Debtors respectfully submit that Bankruptcy Rule 6003(b) has been

satisfied, and the relief requested herein is necessary to avoid immediate and irreparable harm to

the Debtors and their estates.

VI. WAIVER OF ANY APPLICABLE STAY

38. The Debtors also request that the Court waive the stay imposed by Bankruptcy

Rule 6004(h), which provides that “[a]n order authorizing the use, sale, or lease of property other

than cash collateral is stayed until the expiration of 14 days after entry of the order, unless the

court orders otherwise.” Fed. R. Bankr. P. 6004(h). As described above, the relief that the

Debtors seek in this Motion is necessary for the Debtors to operate their business without

interruption and to preserve value for their estates. Accordingly, the Debtors respectfully request

that the Court waive the fourteen-day stay imposed by Bankruptcy Rule 6004(h), as the exigent

nature of the relief sought herein justifies immediate relief.

VII. RESERVATION OF RIGHTS

39. Nothing in the Proposed Order or this Motion (i) is intended or shall be deemed to

constitute an assumption of any agreement pursuant to section 365 of the Bankruptcy Code or an

admission as to the validity of any claim against the Debtors and their estates, (ii) shall impair,

prejudice, waive, or otherwise affect the rights of the Debtors and their estates with respect to the

validity, priority, or amount of any claim against the Debtors and their estates, or (iii) shall be

construed as a promise to pay a claim.

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VIII. NOTICE

40. The Debtors will provide notice of this Motion to: (i) the U.S. Trustee; (ii) holders

of the thirty (30) largest unsecured claims on a consolidated basis against the Debtors;

(iii) Cannae Holdings, Inc.; and (iv) the Banks. As this Motion is seeking “first day” relief,

within two business days of the hearing on this Motion, the Debtors will serve copies of this

Motion and any order entered in respect to this Motion as required by Local Rule 9013-1(m). In

light of the nature of the relief requested herein, the Debtors submit that no other or further

notice is necessary.

[Remainder of page intentionally left blank]

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IX. CONCLUSION

WHEREFORE, for the reasons set forth herein and in the First Day Declaration, the

Debtors respectfully request that this Court enter the Proposed Order, granting the relief

requested in the Motion and such other and further relief as is just and proper.

Dated: January 27, 2020 /s/ Ian J. Bambrick Michael R. Nestor, Esq. (DE Bar No. 3526) Robert F. Poppiti, Jr., Esq. (DE Bar No. 5052) Ian J. Bambrick, Esq. (DE Bar No. 5455) YOUNG CONAWAY STARGATT & TAYLOR, LLP Rodney Square 1000 North King Street Wilmington, DE 19801 Tel: (302) 571-6600 Fax: (302) 571-1253

and

David A. Fidler, Esq. Jonathan M. Weiss, Esq. Sasha M. Gurvitz, Esq. KTBS LAW LLP, f/k/a Klee, Tuchin, Bogdanoff & Stern LLP 1999 Avenue of the Stars, 39th Floor Los Angeles, CA 90067 Tel: (310) 407-4023 Fax: (310) 407-9090

Proposed Counsel to Debtors and Debtors in Possession

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EXHIBIT A

Proposed Order

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UNITED STATES BANKRUPTCY COURT DISTRICT OF DELAWARE

In re Chapter 11

AMERICAN BLUE RIBBON HOLDINGS, LLC, Case No.: 20-10161 (___) a Delaware limited liability company, et al.,1 Re Docket No. Debtors.

ORDER AUTHORIZING MAINTENANCE, ADMINISTRATION, AND CONTINUATION OF CERTAIN CUSTOMER PROGRAMS

Upon the motion (the “Motion”)2 of American Blue Ribbon Holdings, LLC and its

affiliated debtors and debtors in possession (the “Debtors”) in the above-captioned chapter 11

cases (the “Cases”) for entry of an order, pursuant to sections 105(a) and 363(b) of title 11 of the

United States Code, 11 U.S.C. § 101 et seq. (the “Bankruptcy Code”), and Rules 6003 and 6004

of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), (i) authorizing the

Debtors to maintain and administer the Customer Programs and honor prepetition obligations to

customers related thereto in the ordinary course of business and in a manner consistent with past

practice; (ii) authorizing the Debtors to continue, replace, implement, modify, and/or terminate

one or more of the Customer Programs, in each case as the Debtors deem appropriate in their

business judgment and in the ordinary course of business, without further application to the

Court; (iii) authorizing banks and other financial institutions (the “Banks”) to honor and process

check and electronic transfer requests related to the foregoing; and (iv) granting related relief;

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and upon consideration of the First Day Declaration; and it appearing that the Court has

jurisdiction to consider the Motion pursuant to 28 U.S.C. §§ 1334 and 157, and the Amended

Standing Order of Reference from the United States District Court for the District of Delaware

dated February 29, 2012; and it appearing that the Motion is a core matter pursuant to 28 U.S.C.

§ 157(b)(2) and that the Court may enter a final order consistent with Article III of the United

States Constitution; and it appearing that venue of these Cases and of the Motion is proper

pursuant to 28 U.S.C. §§ 1408 and 1409; and it appearing that due and adequate notice of the

Motion has been given under the circumstances, and that no other or further notice need be

given; and it appearing that the relief requested in the Motion is in the best interests of the

Debtors’ estates, their creditors, and other parties in interest; and after due deliberation, and good

and sufficient cause appearing therefor, it is hereby

ORDERED, ADJUDGED, AND DECREED THAT:

1. The Motion is GRANTED, as set forth herein.

2. The Debtors are authorized, but not directed, in their sole discretion, to pay,

honor, and otherwise satisfy their prepetition obligations arising from the Customer Programs in

the ordinary course of business.

3. The Debtors are authorized to continue, replace, implement, modify, and/or

terminate one or more of the Customer Programs, in each case as the Debtors deem appropriate

in their business judgment and in the ordinary course of business, without further application to

the Court; provided, however, that if the Debtors determine to terminate the Gift Card program,

they shall file a notice with this Court regarding such termination, no later than 7 days after

terminating such program, and shall serve such notice on the U.S. Trustee, any statutory

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committee appointed in these Cases, and all parties who, as of the filing of such notice, have

filed a request for notice under Bankruptcy Rule 2002.

4. The Banks are authorized, when requested by the Debtors, in the Debtors’

discretion, to honor and process checks or electronic fund transfers drawn on the Debtors’ bank

accounts to pay prepetition obligations authorized to be paid hereunder, whether such checks or

other requests were submitted prior to, or after, the Petition Date, provided that sufficient funds

are available in the applicable bank accounts to make such payments. The Banks may rely on

the representations of the Debtors with respect to whether any check or other transfer drawn or

issued by the Debtors prior to the Petition Date should be honored pursuant to this Order, and

any such Bank shall not have any liability to any party for relying on such representations by the

Debtors, as provided for in this Order.

5. Nothing in this Order, nor as a result of any payment made pursuant to this Order,

(i) is intended or shall be deemed to constitute an assumption of any agreement pursuant to

section 365 of the Bankruptcy Code or an admission as to the validity of any claim against the

Debtors and their estates, (ii) shall impair, prejudice, waive, or otherwise affect the rights of the

Debtors and their estates with respect to the validity, priority, or amount of any claim against the

Debtors and their estates, or (iii) shall be construed as a promise to pay a claim.

6. The credit card companies, internet vendors, and check processors used by the

Debtors are authorized to offset chargebacks and fees on account of customer purchases in the

ordinary course of business that may have arisen before the Petition Date.

7. The Debtors are authorized to issue postpetition checks, or to effect postpetition

fund transfer requests, in replacement of any checks or fund transfer requests that are dishonored

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as a consequence of these Cases with respect to prepetition amounts owed in connection with the

Customer Programs.

8. Bankruptcy Rule 6003(b) has been satisfied because the relief requested in the

Motion is necessary to avoid immediate and irreparable harm to the Debtors.

9. Notwithstanding any provision in the Bankruptcy Rules to the contrary: (i) this

Order shall be effective immediately and enforceable upon its entry; and (ii) the Debtors are not

subject to any stay in the implementation, enforcement, or realization of the relief granted in this

Order.

10. The Debtors are authorized to take any and all actions necessary or appropriate to

implement this Order.

11. The Court retains jurisdiction and power with respect to all matters arising from

or related to the implementation or interpretation of this Order.

Dated: Wilmington, Delaware ______, 2020 ______Honorable United States Bankruptcy Judge

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