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1 2 3 4 5 6 7 8 9 10 APPEARANCES: 11 IN RE


UNITED STATES BANKRUPTCY COURT DISTRICT OF DELAWARE ) ) PERKINS & MARIE CALLENDER’S INC.) et al. ) ) Debtors. ) ) ) ) ) Case No. 11-11795 (KG) Chapter 11 Jointly Administered Courtroom No. 3 824 Market Street Wilmington, Delaware 19801 July 12, 2011 10:00 A.M.


For the Debtors: 12 13 14 15 16 17 18 19 20 21 22 23 24 25 ECRO: Transcription Service:

Young Conaway Stargatt & Taylor, LLP By: ROBERT F. POPPITI, JR., ESQ. The Brandywine Building 1000 West Street, 17th Floor Wilmington, Delaware 19801 (302) 571-6600 Troutman Sanders LLP By: HOLLACE COHEN, ESQ. The Chrysler Building 405 Lexington Avenue New York, NY 10174 (212) 704-6000 GINGER MACE Reliable 1007 N. Orange Street Wilmington, Delaware 19801 Telephone: (302) 654-8080 E-Mail:

Proceedings recorded by electronic sound recording: transcript produced by transcription service.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

For RREEF and Passco: Companies

Katten Muchin Rosenman LLP By: DUSTIN P. BRANCH, ESQ. 2029 Century Park East Suite 2600 Los Angeles, CA 90067-3012 (310) 788-4400 Paul Hastings By: JESSE H. AUSTIN, III, ESQ. 600 Peachtree Street, N.E. Twenty-Fourth Floor Atlanta, GA 30308 (404) 815-2208

For Wells Fargo Capital Finance

3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 OPENING STATEMENT: For the Debtors, by Mr. Poppiti NOTICE OF AGENDA MATTERS: For RREEF and Pasco Companies, by Mr. Branch For the Debtors, by Hollace Cohen For Wells Fargo Capital Finance, by Mr. Austin INDEX Page 4 8 13 17

4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: Please be seated. morning. MR. POPPITI: Good morning Your Honor. May it Good morning everyone. Thank you.

Good to see you all.

Mr. Poppiti, good

please the Court, Robert Poppiti from Young Conaway Stargatt & Taylor on behalf of Perkins and Marie Callender’s, Inc. With me at the table today I have Hollace Cohen and Brett Goodman from the Troutman Sanders Law Firm. THE COURT: Welcome. Your Honor, at this time I’d also like


to take the opportunity to introduce the Committee counsel that’s here today. THE COURT: MR. POPPITI: firm, as well as –THE COURT: MR. POPPITI: MR. CHIPMAN: you again. THE COURT: MR. POPPITI: It’s good to see you again, thank you. Your Honor, if it’s okay with the Mr. Chipman, good to see you. -- Mark Somerstein from Ropes & Gray. Good morning Your Honor, nice to see Yes. Bill Chipman from the Landis Rath

Court, I’d like to work off of the amended agenda that we filed for today's hearing. THE COURT: MR. POPPITI: Yes please, thank you Mr. Poppiti. And I believe based on the adjourned

5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 matter and the certifications of counsel and no objection, we thought we can jump up to agenda number 8 -THE COURT: MR. POPPITI: Yes. -- which is the bar date motion and

it’s actually just more of a clerical issue there Your Honor. Two points, the first point being that we did file our schedules and statements yesterday, so we did want to notify the Court of the same. Obviously we did that in advance of

the deadline for us to do so, and both shortly after Your Honor as it turns out had signed the bar date order. second issue is a housekeeping item. The

We had agreed with the

Committee, Your Honor, that we would shorten the length of time that Omni, our noticing agent, would have to get the bar date materials out from five days after entry of the order to two. Seeing as though we had resolved our issues with the

Committee, we filed it under certification of counsel, and Your Honor signed that order as it turns out on Friday the 9th. We just wanted to have Your Honor so order that it would

actually be two days from today because obviously the intention of the parties was that two days from the 12th. believe Committee counsel has confirmed if that’s okay. THE COURT: All right. If it’s fine with everyone, I

it’s certainly fine with me. change. MR. POPPITI: Great.

And I will so order that

Thank you Your Honor.


6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 them. we’ll make sure those materials do in fact get out. With

that, Your Honor, we jump up to agenda item 10, and that’s the lease rejection motion that the Debtors filed on the petition date. We did receive two informal responses. One

was from RREEF Management and Passco Companies, the other was from the Official Committee of Unsecured Creditors. We did

resolve the Committee’s response that would change the form of order, and I’ll walk Your Honor through in a moment. And

with respect to RREEF Management and Passco Companies, we have resolved their response, Your Honor, but I do want to read a couple of items into the record as it pertains to RREEF Management and Passco Companies. And if they’re in the

Court today, I’d certainly encourage them to correct me if I have misstated that agreement. THE COURT: Yes. Ms. Heilman I think is here representing

Good morning Ms. Heilman. And, Your Honor, my understanding is

MR. POPPITI: as follows.

As I said it’s RREEF Management and I believe

the property is Sunset Valley Plaza in Austin, and it’s also Texas Passco Companies which the property is at least colloquially known as the Promenade of Howard Hughes. The

parties are going to enter into a side letter agreement, the essential terms of which will be as follows. With respect to

those two properties, the effective date of rejection for those leases will be June 17th, 2011. As Your Honor may

7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 recall, with respect to the motion as a whole, we had sought retroactive to the petition date, obviously with respect to these properties pursuant to the parties in agreement, it will be June 17th. The landlords will be entitled to file

rejection damage claim under Section 502(b)(6) of the Bankruptcy Code which shall be a general unsecured claim not entitled to priority, and any pre-petition claim for any amounts in arrears for the period immediately prior to the petition date, again June 13th, 2011, was the petition date, subject to the landlord’s duties if any to mitigate and the Debtor’s rights to a challenge or object to such claim pursuant to the Bankruptcy Code, applicable state law or otherwise. The next point Your Honor, the landlords will be

entitled to assert an administrative claim for any rent due, or other claims from the petition date through and including June 17th, 2011 subject to the Debtors’ rights to challenge or object to such claim pursuant to the Bankruptcy Code, applicable state law, or otherwise, except that the Debtors cannot object to the timing of the rejection. And finally,

Your Honor, the landlords will waive any and all administrative claims pursuant to sections 503 and 507 of the Bankruptcy Code against the Debtors for the period after the effective date of rejection which again was June 17th, 2011 as to these two properties. THE COURT: All right. I may have just misheard you

8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 waive –THE COURT: MR. POPPITI: Yes. -- any and all administrative claims Mr. Poppiti, but I think you said the Debtors will waive instead of the landlord, but I may have misheard. misheard you. MR. POPPITI: Yeah, Your Honor, the landlords will I may have

pursuant to sections 503 and 507 of the Bankruptcy Code against the Debtors for the period after the effective rejection date of June 17th. THE COURT: MR. POPPITI: THE COURT: Yes. Thank you, Mr. Poppiti.

I appreciate it. Mr. Branch, good to see you again. And

forgive me for not acknowledging that you’re representing RREEF of course. MR. BRANCH: It’s quite all right, Your Honor;

Dustin Branch, Katten Muchin Rosenman LLP on behalf of Passco Companies and RREEF Management Company. THE COURT: MR. BRANCH: Yes. I have a pro hac pending I believe, I’m

not sure it’s been signed yet, but –THE COURT: It’s fine for you to appear here for

this hearing, certainly Mr. Branch. MR. BRANCH: I appreciate that; just wanted to

confirm that the terms as read are consistent with our

9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 you. understanding with respect to the property, the Howard Hughes Center and the Sunset Valley Plaza. Don’t have any changes,

he read exactly what our agreement is into the record, and we are fine with that agreement. THE COURT: MR. BRANCH: THE COURT: appreciate it. MR. POPPITI: With that, Your Honor, if I may All right. Thank you Your Honor. Thank you. Thank you Mr. Branch, I

approach, I have a form of proposed order as well as a redline to reflect a revision we made on account of the Committee. THE COURT: MR. POPPITI: THE COURT: Yes, please. May I approach? You certainly may Mr. Poppiti. Thank

Good morning to you. MR. POPPITI: As you’ll see, Your Honor, just one

simple change in paragraph 8 which was reflected on page 2 of the redline which is just to make clear that not only will the Debtors’ rights be preserved with respect to claims objections, but also the Committee’s will as well. THE COURT: MR. POPPITI: All right. And we were certainly happy to make

that revision for the Committee. THE COURT: Anyone else just out of an abundance of

10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 caution? Okay. I’m prepared to sign the order. It

certainly is appropriate and works, and I will be pleased to grant the relief. MR. POPPITI: Thank you, Your Honor. Next up on the We’re going

agenda, Your Honor, is actually the final DIP.

to go ahead and if it’s okay with Your Honor, push that to the back of the agenda. THE COURT: Certainly. And Hollace Cohen from Troutman will


present that to the Court. THE COURT: MR. POPPITI: Very well. And I’m sure Mr. Austin will walk Your

Honor through the redline and ultimately hand up the final clean. THE COURT: MR. POPPITI: All right. Your Honor, next up on the agenda is

item 12, which is the utilities motion. THE COURT: MR. POPPITI: Yes. If I may approach with a form of

revised clean, as well as a redline and then I’ll walk you through the two simple revisions. THE COURT: MR. POPPITI: Sure Mr. Poppiti, thank you. Your Honor, with respect to the

utilities motion, we did receive two objections, one was from a group of utility providers which I guess I’ll just refer to

11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 as the utility group at this point, and that was item C on the agenda, as well as item 12D which was an objection from a Wisconsin electric power company. We have reached agreements

in principal with both of those groups of utilities. THE COURT: MR. POPPITI: Okay. And we’ve revised the final form of

utility order simply to provide in paragraph 2 a new paragraph 2 with those 8 utility providers, it’s a group of I believe, actually I should take that back, Your Honor, I think it’s a group of 8 and then a group of 2. Needless to

say, all will be carved out, the final utility order will not apply as it pertains to them, and the Debtors will obviously address those through side agreements. THE COURT: All right. Anyone else? And I’m sure

the Committee is aware of the terms of the side agreements. UNIDENTIFIED SPEAKER: Yes, Your Honor. We’re

working with the Debtors and making sure that those meet our requirements. THE COURT: Okay. Very well. In that case I will

grant the final order here. MR. POPPITI: Thank you, Your Honor. And the final

item on the agenda, Your Honor, before I turn the podium over to Ms. Cohen, is item 13 which was the ordinary course professional motion. THE COURT: Yes.

12 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 it. MR. POPPITI: yesterday. We did file certification of counsel

I don't know that Your Honor’s had the If not, I’m happy to

opportunity to take a look at that. walk you through the changes. THE COURT: I did.

I just didn't tend to signing

So do you have one there by any chance Mr. Poppiti? MR. POPPITI: I do, Your Honor. I’ll present that

to the Court right now if I may approach. THE COURT: MR. POPPITI: THE COURT: That would be fine, yes. Thanks. It certainly was in order. And I will

be pleased to enter it. MR. POPPITI: I included a redline, Your Honor. As

you’ll see it’s, we took the OCP cap from $40,000 to $35,000 and we’ve removed the concept of a rolling three month average cap at the request of the Committee and just made it a per month cap. In addition to the extent an OCP exceeds

the cap, they’ll have to file a fee application for the entire portion, I should say all their fees, not just a portion that goes over the cap. THE COURT: MR. POPPITI: Committee’s concerns. THE COURT: That makes sense because otherwise it Okay. All right.

And I believe that resolves the

would be difficult to determine why the cap had been

13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 exceeded. MR. POPPITI: THE COURT: That’s exactly right. That’s a helpful change. And with that

I will sign the order. MR. POPPITI: Thank you, Your Honor. With that,

I’ll turn the podium over to Hollace Cohen, my co-counsel from Troutman Sanders, Your Honor. had signed a pro hac order for her. THE COURT: MR. POPPITI: THE COURT: MS. COHEN: Yes. Thank you, Your Honor. Ms. Cohen, welcome. Thank you very much, Your Honor. May it I do believe Your Honor

please the Court, my name is Hollace Cohen, I’m with Troutman Sanders, counsel to Perkins and Marie Callender’s, Inc. and the other Debtors. THE COURT: MS. COHEN: Yes. As Your Honor will recall, on June 14th,

2011 the Court entered an interim DIP order which authorized the Debtors to obtain post-petition financing from Wells Fargo Capital Finance, Inc. pursuant to section 364 of the Bankruptcy Code. It allowed up to 21 million in aggregate Under the

principle amount inclusive of letters of credit.

agreement but, at the time of the interim order to date, the Debtors were allowed to have advances up to 16 million in principle amount. Of the amount that was available,

14 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 10,058,760 in existing letters of credit under a pre-petition agreement dated as of September 24th, 2008, as amended with Wells Fargo Financial became letters of credit under the DIP credit facility, so that is currently outstanding under the DIP facility. THE COURT: MS. COHEN: Yes. The final DIP order also provides for

use of cash collateral of Wells Fargo as pre-petition agent and lender under the pre-petition credit agreement and of the Bank of New York Mellon Trust Company, N.A., as indentured trustee, the Bank of New York Mellon as collateral agent for and the holders of the 14 percent senior secured notes due 2013. Since the entry of the interim order, on June 14th,

2011 as the Court knows, an Official Committee of Unsecured Creditors was appointed and they have selected both counsel and a financial advisor. All constituencies in these cases

including the Committee have had an opportunity to comment on the final DIP order, and the Committee has also commented on the DIP credit agreement. The final DIP order reflects

comments given not only by the Debtors but the DIP lender and the restructuring support parties. The final DIP order is While the

substantially similar to the interim order.

interim order referred to the DIP credit agreement, as attached to the motion for the DIP facility, this order specifically attaches as an exhibit a copy of the DIP credit

15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 agreement as executed on June 14th, 2011 along with exhibits and schedules thereto. And it also includes an amendment

number 1 to the credit agreement which reflects revisions to the DIP credit agreement negotiated by the Committee. speak to that right now. I’ll

Briefly, the amendments to section

3.2 of the credit agreement relate to conditions to advances by the DIP lender to the Debtors. to paragraphs H, I and J. And the revisions relate

And the concern that’s being

addressed is that there was a concern that those provisions might precipitously cause a loss of the ability of the Debtors to receive advances if certain actions were taken that might relate to the DIP order. So for example, as

previously drafted, paragraph H would have prevented an advance of a motion, if a motion were pending, to vacate, reverse, modify or amend the final DIP order or to grant an administrative expense against the Debtors that was equal or superior in priority to that granted to the DIP agent and the lenders. Now under paragraph H, the motion would have to be

granted before it would be an impediment to an advance. THE COURT: MS. COHEN: Yes. Similarly, paragraph I relates to a

motion for reconsideration of the final order, and provides that such motion will not affect the right to advance now. If any of the Debtors are actively contesting the motion in the same vein, paragraph J would permit advances if an appeal

16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Cohen. of the DIP order were filed so long as it was being actively contested by any loan party. Finally, the amendment releases

the DIP agent and the DIP lender and their affiliates from any claims of the Debtors arising from any act or omission of the DIP agent and the DIP lender and other related release parties under the credit agreement and loan documents that occur prior to the amendment. This is a fairly standard type

of language that comes with amendments to credit agreements. The order seeks authorization and approval with respect to such amendment and in addition to the other revisions that Mr. Austin will speak to. Also as a result of the

appointment of the Committee, August 23, 2011 will be the investigation date, that is 60 days after the Committee’s appointment. So that is reflected in the order. I will

further note that the Committee has also negotiated a change in the Debtors’ 13-week budget, which would include an additional 450,000 for the fees and expenses of the Committee’s professionals. Upon entry of the order as

provided in the interim DIP order, 165,535 [indiscernible] outstanding on the petition date, under the pre-petition credit agreement will be paid. Your Honor, I’m going to turn

over the podium to Mr. Austin and he can tell you more about the changes. THE COURT: All right. Thank you very much Ms.

17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MS. COHEN: THE COURT: Thank you. I certainly understand those changes They make a lot of sense,

being proposed by the Committee.

anybody can file any motion, but it’s not until the belief is actually obtained that it becomes a problem I suppose. Mr. Austin you have your own views of course. MR. AUSTIN: Well it’s certainly not our intent, But

Your Honor, to just because a motion was pending that it would be a block to the Debtor being able to avail itself of the facility. For the record, I’m Jesse Austin from the firm We’re counsel to Wells Fargo Capital

of Paul Hastings.

Finance along with Mr. Riley here today. THE COURT: MR. AUSTIN: Yes sir. Yes.

The Debtors’ counsel pretty much

covered all the points that were modified by the final order, at least from a substantive basis. As a practical matter,

the changes that were made I think fall into three categories; one, the fact that we changed the interim to a final. THE COURT: MR. AUSTIN: Right. Third was to remove certain points that

were no longer applicable because we are now in a final order versus being in an interim order stage. And I think the

third was to address a couple of points, one being the amendment that was referenced, that came as a comment from

18 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Austin. MR. AUSTIN: And I have a copy of it with all of the Committee which we were able to accommodate. The other

was to reflect that now that the Committee has been formed, the Committee has been granted standing for the investigation and ultimately pursuant of claims as well as to hardwire kind of the dates so we’re not all figuring out what the calendar and stuff is. THE COURT: MR. AUSTIN: Right. To my knowledge I think that we’ve also I And

accommodated through the language all of the landlords. don't think we have any objections there to the order.

so with that, Your Honor, unless the Court has any questions about the specific blacklines, I know that we delivered I think there was a blackline of the proposed final to interim delivered to, a corrected blackline delivered to the Court this morning. THE COURT: MR. AUSTIN: Yes. If you have any questions about any of Other than that I

those points, I’ll be glad to address it.

think that we would be prepared to have this order presented for the Court’s signature and entry of the record. THE COURT: All right. Thank you very much Mr.

the, I think all of the exhibits attached, Your Honor, if I could --

19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: MR. AUSTIN: Good. What I’ve done here with the two flags

is first to flag where your signature would be, and secondly to flag where the actual amendment number 1 that we put into place is in case the Court wanted to review that more closely. THE COURT: MR. AUSTIN: Wonderful. But that’s, the rest of it is the

documents that have already been executed by the Debtor in this case relative to the financing agreement. THE COURT: approach sir. All right Mr. Austin. You certainly may

It’s good to see you again. It’s good to see you. Thank you. Thank you sir. I was just


finishing my last few pages.

I see that really most of the

changes are just to convert this to a final order and are not particularly significant. While I’m finalizing my review, All right. Well I am

does anyone else wish to be heard?

certainly satisfied that this is a particularly clean financing order, and it’s clearly appropriate and necessary for the, in the best interest of the Debtors’ estates, and I’m pleased with the Committee’s input, Mr. Somerstein and your colleagues, and I’ll be pleased to sign the order. MR. AUSTIN: Thank you Your Honor. Thank you Your Honor.


20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Honor. THE COURT: Thank you Mr. Poppiti. Thank you THE COURT: Somerstein. MR. SOMERSTEIN: THE COURT: MR. POPPITI: Thank you. It’s good to have you again Mr.

Yes Mr. Poppiti? Your Honor, that’s it for our agenda,

so unless the Court has anything further, we’re all done. THE COURT: All right. Well I appreciate that.

This is a day when a longer hearing might have been more comfortable instead of having to go back out in that heat. But it’s not going to get any better, so you may as well get it done now. UNIDENTIFIED SPEAKER: MR. POPPITI: THE COURT: telling us what heat. here too. MR. POPPITI: THE COURT: MR. POPPITI: We are Your Honor. Too well unfortunately. We appreciate the Court’s time, Your What heat?

That is very true Your Honor. Well you know, this is a southerner I don't know, we’re doing pretty well

everyone, and we will stand in recess. MR. POPPITI: (Court Adjourned)

Good day to you.

Thank you, Your Honor.

21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 /s/Mary Zajaczkowski Mary Zajaczkowski, CET**D-531 July 13, 2011 Date CERTIFICATE I certify that the foregoing is a correct transcript from the electronic sound recording of the proceedings in the aboveentitled matter.

In Re: Perkins & Marie Callender's Inc., et al. 6075 Poplar Avenue Suite 800 Memphis, TN 38119 EIN: 62−1254388 The Restaurant Company

Chapter: 11

Case No.: 11−11795−KG

NOTICE OF FILING OF TRANSCRIPT AND OF DEADLINES RELATED TO RESTRICTION AND REDACTION A transcript of the proceeding held on 7/12/2011 was filed on 7/14/2011 . The following deadlines apply: The parties have 7 days to file with the court a Notice of Intent to Request Redaction of this transcript. The deadline for filing a request for redaction is 8/4/2011 . If a request for redaction is filed, the redacted transcript is due 8/15/2011 . If no such notice is filed, the transcript may be made available for remote electronic access upon expiration of the restriction period, which is 10/12/2011 unless extended by court order. To review the transcript for redaction purposes, you may purchase a copy from the transcriber (see docket for Transcriber's information) or you may view the document at the clerk's office public terminal.

Clerk of Court Date: 7/14/11


Notice Recipients
District/Off: 0311−1 Case: 11−11795−KG User: Brandon Form ID: ntcBK Date Created: 7/14/2011 Total: 7

Recipients of Notice of Electronic Filing: ust United States Trustee USTPREGION03.WL.ECF@USDOJ.GOV TOTAL: 1 Recipients submitted to the BNC (Bankruptcy Noticing Center): db Perkins &Marie Callender's Inc., et al. 6075 Poplar Avenue Suite 800 Memphis, TN 38119 aty Brett D. Goodman Troutman Sanders LLP The Chrysler Building, 405 Lexington Ave New York, NY 10174 aty Hollace Topel Cohen Troutman Sanders LLP The Chrysler Building, 405 Lexington Ave New York, NY 10174 aty Mitchel H. Perkiel Troutman Sanders LLP The Chrysler Building, 405 Lexington Ave New York, NY 10174 aty Robert F. Poppiti, Jr. Young, Conaway, Stargatt &Taylor, LLP The Brandywine Building 1000 West Street 17th Floor Wilmington, DE 19801 aty Robert S. Brady Young, Conaway, Stargatt &Taylor The Brandywine Bldg. 1000 West Street, 17th Floor PO Box 391 Wilmington, DE 19801 TOTAL: 6