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1 2 3 IN RE: 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 ECRO: 20 Transcription Service: 21 22 23 24 25 Proceedings recorded by electronic sound recording: transcript produced by transcription service. Reliable 1007 N.

Orange Street Wilmington, Delaware 19801 Telephone: (302) 654-8080 E-Mail: gmatthews@reliable-co.com GINGER MACE APPEARANCES: For the Debtors: Young Conaway Stargatt & Taylor, LLP By: ROBERT F. POPPITI, JR., ESQ. ROBERT BRADY, ESQ. The Brandywine Building 1000 West Street, 17th Floor Wilmington, Delaware 19801 (302) 571-6600 Troutman Sanders, LLP BY: MITCHELL PERKIEL, ESQ. The Chrysler Building 405 Lexington Avenue New York, New York 10174 (212) 704-6000 PERKINS & MARIE CALLENDER’S INC., et al. Debtors. ) ) ) ) ) ) ) ) ) ) Case No. 11-11795 (KG) Chapter 11 Courtroom No. 3 824 Market Street Wilmington, Delaware 19801 October 31st, 2011 10:00 A.M. MR. POPPITI: UNITED STATES BANKRUPTCY COURT DISTRICT OF DELAWARE

TRANSCRIPT OF HEARING BEFORE HONORABLE KEVIN GROSS UNITED STATES BANKRUPTCY JUDGE

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 Restructuring: Support Parties:

Akin Gump Strauss & Feld, LLP By: SCOTT ALBERINO, LLP One Bryant Park New York, New York 10036 (212) 872-1000 Paul Hastings By: JESSE AUSTIN, ESQ. 75 E. 55TH STREET New York, New York 10022 (212) 318-6000 Ropes & Gray, LLP By: MARK SOMERSTEIN, ESQ. 1211 Avenue of the Americas New York, New York 10056 (212) 596-9000 Womble Carlyle, LLP By: KEVIN MANGAN, ESQ. 222 Delaware Avenue, Suite 1501 Wilmington, Delaware 19801 (302) 252-4320

For Wells Fargo:

For Official Committee:

For Tri-State:

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 NOTICE OF AGENDA MATTERS: For the Debtors, by Mr. Poppiti For Tri-State, by Mr. Mangan For the Debtors, by Mr. Perkiel For Wells Fargo, by Mr. Austin INDEX Page 5 13 15 31

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 Conaway. THE COURT: Of course, Mr. Brady, good morning. you. MR. POPPITI: For the record, Your Honor, Robert THE COURT: Please be seated. Good Morning everyone, thank you.

My sincerest apologizes for starting late,

but I have these Chief Judge responsibilities, and one of them involved meeting with the people across the street, so the District Court. MR. POPPITI: understand. THE COURT: So, now we’re ready to proceed; thank Not a problem, Your Honor, we

Poppiti from Young Conaway Stargatt and Taylor, on behalf of the Debtors. Your Honor, before we start just a couple of

introductions. I have with me today the CEO of the Debtors, Mr. Joseph Trundale; I’d just like to introduce him. THE COURT: Welcome to you, Mr. Trundale. He was here at the first day hearing,

MR. POPPITI: if you recall. THE COURT:

Yes. And, I also have with me my co-

MR. POPPITI:

counsel, Mitch Perkiel, Hollace Cohen, and Brett Goodman from Troutman Sanders. THE COURT: Good Morning. And, of course Mr. Brady from Young

MR. POPPITI:

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 Poppiti. MR. POPPITI: today’s agenda. Your Honor, we’ll be working off

The first item on the agenda, I’m going to

take them in tandem if that’s okay with you. THE COURT: Sure. It’s the Girande motion for leave to

MR. POPPITI: file a late claim. THE COURT:

Yes. There’s also a stay relief motion that

MR. POPPITI:

was filed by Mr. Girande, and he also has a co-movant, Mr. Ippolito. What we resolved, Your Honor, pursuant to a

stipulation in the agreed form of order, is Mr. Girande’s motion for leave to file a late claim, as well as his piece of the stay relief motion. What we’re going to do on Mr.

Ippolito’s piece is we’re going to go ahead and adjourn that to November 22nd, as we continue to work with him on what hopefully will be a consensual form of order. approach, Your Honor. THE COURT: Please. Thank you; thank you Mr. So, if I may

Good morning. MR. POPPITI: Your Honor, what you have in front of

you is just a basic plain vanilla form of order approving the stipulation that’s attached to that order as Exhibit 1. The

stipulation, of course, has been agreed to by Mr. Girande and his counsel, and they’ve also had an opportunity to look at the order, and they’ve signed off on that as well.

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 and 2. THE COURT: Very well. It’s a very basic stipulation, Your

MR. POPPITI:

Honor; it will obviously allow him to file his claim late. In fact, I think he actually filed a claim subsequent to his motion so it’s on the docket. It will be deemed timely filed

and he has stay relief to go ahead and commence in action if he so chooses. THE COURT: stipulation. All right, I will approve the

Thank you, Mr. Poppiti. Your Honor, that was Agenda Items 1 We’re

MR. POPPITI:

Agenda Item 3 is a lease rejection motion.

going to go ahead and table that until the November 22nd hearing. THE COURT: Right. Agenda Item 4 was our exclusivity

MR. POPPITI:

motion which, hopefully, after today doesn’t quite mean much, but Your Honor has signed the order on that one. on the agenda has been dealt with. So number 4

Agenda Item 5, Your We’ve tabled this for

Honor, is the Pepsi rejection motion.

some time, we’ve finally been able to reach an agreement with opposing counsel on a form of order. hand up that form of order. THE COURT: You bet, Mr. Poppiti. Thank you. If I may approach, I’ll

MR. POPPITI:

Your Honor, as I said before, that

form of order has been agreed to by Pepsi’s counsel, and I

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 don’t believe they have any opposition to its entry. THE COURT: Very well and does anyone here, or does I will sign

anyone wish to be heard with respect to this? the order; all right. MR. POPPITI:

Your Honor, that brings up to Agenda

Item 6 which, of course, is the plan confirmation. THE COURT: MR. POPPITI: Yes. And be advised, Your Honor, yesterday

we have reached a settlement –THE COURT: MR. POPPITI: Good. -- which will hopefully put us here on On Friday, Your Honor, we

a consensual basis on all items.

should say on Thursday, we filed a lot of our confirmation documents. Those included obviously our memorandum of laws,

Court confirmation, declarations from Mr. Santarlasci, the company’s financial advisor, as well as the declaration from the company’s CEO, Mr. Trundale. And we obviously filed some

other papers as well, Your Honor, one of which was a joint response in opposition to the Tri-State objection and, of course, that is the matter as we advised Chambers that is now resolved, at least at principle. So, Your Honor, if I may I would just like to walk through the objections that we received you know let you know how we resolved those. I trust that Your Honor had the

opportunity to look at the confirmation order that we filed.

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 Item B. THE COURT: I sure did, yes and the memorandum, and

all of the related papers. MR. POPPITI: THE COURT: MR. POPPITI: Yes. I did yesterday. And just looking ahead a little bit,

Your Honor, so we obviously filed that confirmation order on Thursday, that’s been a change we don’t anticipate handing out the confirmation order at today’s hearing. I think we’re

going to go back, work on the order a little bit more, and hopefully get that to you under certification of counsel either later today or hopefully no later than tomorrow. THE COURT: MR. POPPITI: Very well. Your Honor, so under Agenda Item 6

which, of course, is confirmation and an objections filed. The first one was the City of Waco, which was a taxing authority objection; we resolved that through the confirmation order. That language was in the order that we

sent over on Thursday. THE COURT: MR. POPPITI: Yes. Same thing for Travis County which is

Item C, Your Honor, is the objection of Tri-State.

As I alluded to earlier, that objection has been resolved in principle. We’re going to have a term sheet; that term sheet

is going to be very similar to the term sheet that Mr. Alberino stepped the Court through at last Tuesday’s hearing

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 on Omega. I think the two differences that I’ll point out, If

Your Honor, on the record, one is the claims allowance.

you recall in the Omega we had a floor and a ceiling, here the floor is anticipated to be 4,000,000, and the ceiling would be 6,500,000. And, the second piece, Your Honor, is that Tri-State also filed a stay relief motion, as well as a advisory complaint prior to today’s hearing. was filed Friday. abeyance. I believe the complaint

So we’re going to hold those items in

Obviously, if the stipulation comes or the

settlement comes to fruition as we all hope, then they’ll go ahead and withdraw the items on or after the effective date. THE COURT: MR. POPPITI: Okay. With those items being, of course, the

adversary complaint and the stay relief motion. THE COURT: All right. Will there be more discussed

about Tri-State or should we provide Tri-State’s counsel with an opportunity to be heard at this time? MR. POPPITI: Your Honor, I think my thought had

been let us get through all this sort of where we are on the agenda items, and then we’ll give Mr. Mangan an opportunity if he would like to -THE COURT: MR. POPPITI: Very well. -- confirm or clarify as appropriate. We resolved that

Your Honor, Agenda Item D, was the IRS.

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 objection on Friday, as well as Item E. We also resolved

that subsequent to the proposed form of order that we handed over on Thursday. So if I may approach, I just wanted to

hand out a couple of sheets of paper, Your Honor, one of which reflects the language that will be inserted into the confirmation order on the IRS and other Macerich/Watt Management Company objection. THE COURT: MR. POPPITI: THE COURT: you, Mr. Poppiti. MR. POPPITI: Your Honor, on the IRS I believe Ms. All right. So if I may approach? You certainly may. Thank you, thank

Slice is not in the Courtroom today, but she has authorized me to advise the Court that they have withdrawn their objection on the basis that that language would be included in the formal confirmation order. THE COURT: MR. POPPITI: All right. With respect to Macerich and Watt

Company, we have one little piece that is still outstanding, Your Honor, it’s in the language if you’ll see it on page 2. At this point, we’re each going to reserve our rights on that piece. It’s a $12,000.00 check that we’re trying to figure

out really at its most basic level whether the check was cashed or not. So pursuant to that language, they’ll have -- we’ll

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 have two days to hopefully try and work that out. If we

don’t and it’s something more complicated than whether a check cashed or not, then we’ll contact the Court and try to get a hearing date on that cure piece. their counsel is in the Courtroom. But other than that,

They have advised me that

we are resolved and we go ahead and include that language in the order, and we, of course, will do so, and you’ll see that order, like I said, either later today or tomorrow. THE COURT: All right. Agenda Items F, G, F and G, Your

MR. POPPITI:

Honor, they’ve also been resolved pursuant to the confirmation order you saw. F was the Inland Pacific

objection to confirmation, and G was the Missouri Department of Revenue. THE COURT: MR. POPPITI: Yes. Item 8, Your Honor, is, of course,

Omega, and we resolved that through the confirmation order and the term sheet. And as I said, Mr. Alberino walked the The final,

Court through that in depth earlier last week.

you know, “plan objection,” Your Honor, is the local Texas Tax Authorities, and I also have some language in the confirmation order that Your Honor has already seen. Your Honor, jumping to Agenda Item 7, which is related to the cure objections which is our cure payment schedule we filed back on October 17th. We also received

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 several responses to that, and if I could just very briefly walk the Court through those. THE COURT: MR. POPPITI: Joint Venture. Sure. The first one is the objection of C&S

Your Honor, that matter had been resolved, We had sent the checks out So no revisions are

the checks had just crossed.

while they were filing their objection.

needed to the cure schedule or the confirmation order. Coca-Cola, we have resolved that through the cure payment schedule that will be attached to the confirmation order. Freshpoint similar; we resolved it through the cure

payment schedule that will be attached to the confirmation order. That, of course, brings us to Agenda Item D under

that heading which is Tri-State, and that’s obviously going to be wrapped up in the settlement that I just discussed. Agenda Item E is Bay Ventures that will also be resolved at the cure payment schedule. Item F, News America

Marketing, same thing, Your Honor, we resolved that through the cure payment schedule. And then finally, PK Anaheim

Plaza and Curlew Crossing; that has actually been resolved through the form of confirmation order with some language that Your Honor saw in the version that we sent over to the Court last week. THE COURT: Very well. So, Your Honor, I think this would

MR. POPPITI:

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 –THE COURT: MR. MANGAN: Yes, yes. -- that’s not too bad. We get to go already. MR. MANGAN: It’s only 10:00 o’clock in the morning probably be a good opportunity to pause if Mr. Mangan does have anything he would like to put, or you know any clarification points on the Tri-State. Aside from that, Your

Honor, I think that very thoroughly walks you through all the objections and responses that we received to confirmation, as well as to the cure payment schedule. THE COURT: Thank you, Mr. Poppiti; and if Ms.

Heilman after Mr. Mangan wishes to be heard or is satisfied with the language whichever is, I’m available. good afternoon, good morning. MR. MANGAN: Good after or morning; now you got me Mr. Mangan,

confused there, Your Honor. THE COURT: See, I did, it’s been a long day

trick or treating tonight. THE COURT: MR. MANGAN: That’s right. Mr. Poppitis’ recitation was accurate,

Mr. Alberino had walked you through that term sheet with Omega, and our deal is pretty much similar, and the salient points really is that we have an allowed claim of 4,000,000, a floor or 4,000,000, a ceiling of 6,500,000, and we’re going

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 to come before the Court if we can’t get it resolved within that to have the Court come up with a number on that. THE COURT: MR. MANGAN: All right. There will be a waiver of all claims by

the estate with its actions, or that’s where the Section 5. We will be getting rid of all of 5. Like I said, this clears

up our objection to the assumption and assignment motion, as well as our plan confirmation. We did file a advisory

proceeding on Friday, as well as a motion for relief from the automatic stay on Thursday, and all of those will be withdrawn once all of this comes to fruition –THE COURT: MR. MANGAN: Excellent. -- on the effective date. But if Your

Honor has any questions, otherwise there will be a term sheet attached that outlines everything. THE COURT: MR. MANGAN: THE COURT: MR. MANGAN: THE COURT: Excellent, thank you, Mr. Mangan. Thank you, Your Honor. And, enjoy Trick or Treating. We will. Ms. Heilman I think must be content with

the language, and so we can proceed further. MS. HEILMAN: THE COURT: MR. POPPITI: Thank you, Your Honor.

Thank you, Ms. Heilman. Thank you, Your Honor, I guess looking

forward for today’s hearing, Your Honor, Mr. Mangan alluded

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 to the fact of what the allowance would be, it would be between four and six and a half. Mr. Brady, I think, at the

end of the hearing will have the housekeeping items to talk to Your Honor about scheduling wise. THE COURT: MR. POPPITI: THE COURT: MR. POPPITI: Okay. We’ll let him bug you on that one. All right. And then I think at this point, Your

Honor, I’ll turn it over to Mr. Perkiel who will walk the Court through the confirmation standards very briefly. THE COURT: MR. POPPITI: THE COURT: MR. PERKIEL: Thank you, thank you, Mr. Poppiti. Thank you, Your Honor. Mr. Perkiel, it’s good to see you. Your Honor, I thank you, and it’s

always wonderful to see you. THE COURT: And, you’ve come with treats rather than

tricks today it appears. MR. PERKIEL: Well, Your Honor, treats for certain,

and maybe in terms of tricks the expedition in which this Chapter 11 Case proceeded. THE COURT: MR. PERKIEL: Yes. And beyond tricks it was a quick and

concerted effort of various parties, sometimes adverse to each other who were able to very successfully resolve issues, and really impose very little upon the judicial resources and

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 time of this Court over a four and half month period. think maybe six hearings before Your Honor. THE COURT: MR. PERKIEL: Absolutely. Not a world speed record, but probably I

somewhere within the record book. THE COURT: Yes. Yes. And for that I speak for all, we

MR. PERKIEL:

certainly appreciate the efforts of the Court, and the time made by the Court, and attain the various matters that have been before the Court. THE COURT: case was proceeded. MR. PERKIEL: Deliberate speed; I was going to be a Deliberate speed I would say is how this

little glib and say that we’re at a point now where it’s time to remove the pie from the oven and serve it up to the Court for his consideration. THE COURT: MR. PERKIEL: Yes. And, in fact, go so far as to say, we

hope the pie we serve up conforms with Your Honors’ recipe and standards. THE COURT: MR. PERKIEL: Thank you. Which will take us to confirmation in

a moment; Your Honor, this case was filed June 13th of this year. It was filed on behalf of primarily Perkins Marie

Callender’s Inc., and its parent Perkins and Marie

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 Callender’s Holding Inc., and ten affiliated subsidiaries, twelve Debtor’s in all. Prior to the Chapter 11, the capital structure was relatively simple on one hand, daunting on the other. company had a senior secured or temporal facility of approximately $26,000,000 prior to the Chapter 11, of which approximately $15,000,000 was dedicated for temporal facility capability. The company had a 14% senior secured indenture, at that time the principle amount of about $132,000,000 maturing in 2013. That was followed by a 10% senior note in the The

principle amount of $190,000,000, also designed to mature in 2013. And, of course, it then had the great and myriad

number of general unsecured creditors, given the nature, berth, and extent of the national restaurant operations of these companies. The good news or the bad news prior to the commencement of the Chapter 11 case was that the senior secured notes were for all intents purposes held by or under the control of one constituency, which we have come to know fondly as the Restructuring Support Parties. Similarly, for

good or bad, the senior notes somewhat slightly in excess of 80% of that, again controlled, or under the control directly or indirectly by the same Restructuring Support Parties. So it’s not always good to have a gorilla in the

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 room, but sometimes when you have the gorilla in the room you know what you’re dealing with. THE COURT: That’s right. And, we have been able to, I think,

MR. PERKIEL:

collectively, including with the Creditors Committee, to deal very effectively among the various constituents. Prior to the filing we entered into some forbearance agreements as we were bumping up against defaults. though, we effectively had our ducks in a row. In June,

We entered

into a restructuring support agreement with the Restructuring Support Parties, at all times with the knowledge, awareness, approval of Wells Fargo which was at the time, and has been, and will continue together with other lenders within their group, the pre-petitioned DIP, and exit facility financer. The restructuring support agreement led to parameters, if you will, of what a consensual Chapter 11 restructure for the companies would look like. It also

imposed milestones, so whether the expedition was feigned or forced either way we’re here today and we’ve accomplished those goals and those milestones effectively all be it with, you know, some wear and tear along the way. With the commencement of the Chapter 11 case on June 13th, I will say the normal typical things certainly related to this company were obtained pursuant to first stay motions and orders including the establishment of the VIP Financing

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 Facility. Various motions and orders to preserve the

business whether it was for purposes of PACA type trust claims or for 3(b)9 claims. We also established procedures which are very relevant to today’s confirmation or restructuring our lease network. Companies are made up of Perkins, on the one hand, Both contain company And there was

Marie Callenders, on the other.

operated locations and franchisee operations.

a full court press with respect to lease locations to identify those locations from the performance basis that were either non-performing, underperforming, or had the opportunity to further enhance performance. And the company

had us to date, and maybe even a little bit between now and the effective date, we’ll have substantially completed without foreclosing any post effective date opportunities, the modification and amendments of leases so as to enhance it for the benefit of the company, and the equity owners and creditors, and the reorganized Debtor. THE COURT: Yes, given the number of properties

involved, I think that that effort was quite remarkable. MR. PERKIEL: Well thank you very much, Your Honor, Just

and I think it will adhere to the benefit of everybody.

as a footnote, I should have made it earlier in the sequence. Just before the filing of Chapter 11, as the Courtroom calls, we entered into a transaction whereby we sold our

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 intellectual property to Conagra which produced, if I recall, 57,500,000 as a gross purchase price, which went out to allocation for various purposes including the pre-petition pay down of the Wells Fargo Facility. And dedicating some of

those proceeds for, I’ll call a working capital, for the company and some pay down of the senior secured note obligations. The numbers have slightly changed, certainly in terms of what was originally $132,000,000 obligation to the senior secured notes. It is now approximately $103,000,000 But that’s pretty

plus interest, plus some other features.

much in the range, and that reduction occurred by virtue of the application of the Conagra proceeds. The plan of reorganization, I’ll call it the initial, though it was called just plan reorganization, was filed July 14th which came I think by definition, and by calendar dates pretty quickly on the heels of the filing. We

filed an amended plan of reorganization September 3rd, and we filed a second amended plan of reorganization on September 9th. I will say in all cases, though, as time passed, it became more involved on the part of various parties, the evolution of the second up to the second amended plan has had with it the involvement of creditors’ committee, it’s counsel, their professional advisors, the Restructuring

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 agree. Support Parties and their cadre of people, and, of course, the Debtor and its cadre of professionals. THE COURT: MR. PERKIEL: just the sole sponsor. THE COURT: MR. PERKIEL: Okay. I mean there is just the Debtors’ And, we have a joint plan at this point. And that’s why we have a –- well we’re

plan, but it’s consensual and it’s –THE COURT: MR. PERKIEL: Yes. -- embraced, and I hope everyone will

We filed our disclosure statement along the way, it

evolved into a second amended disclosure statement, and the disclosure statement was approved by Your Honor on September 9th. And in the context of that approval, Your Honor, in that

order established solicitation and voting procedures which have led us to today’s hearing. On October 21st as required under the disclosure statement and plan, we filed a plan supplement, an integral part of the plan. And very quickly it contained 12 exhibits

and, relevant to today’s hearing, it contained the first lien exit facility credit agreement; that’s going to be the new facility with Wells Fargo and other lenders. THE COURT: MR. PERKIEL: Right. It contained as Exhibit 2 the new It referenced, but did not

secured term loan agreement.

22 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 contain the new inter-creditor agreement. And then it

contained various other documents which speak for themselves as were required and contemplated pursuant to the plan and disclosure statement. The new inter-creditor agreement, that

was not included in the plan supplement, was require to and has been filed as of this morning. THE COURT: Okay. It remains subject to finalization,

MR. PERKIEL:

but we would submit to the Court, based upon what I have been apprised, is that that should be substantially in the form. If there’s anything that is required to be presented to the Court by way of non-material changes, obviously material changes we’re going to have to deal with, because that would be a whole separate issue. But assuming that there’s only

non-material changes either to the new inter-creditor agreement that was filed this morning, or as well -- there was another version filed this morning of the new secured term loan agreement, and there was a new updated version filed of the first lien exit facility credit agreement. Any of those three that require modification on a non-material basis, we will address and file with the Court prior to the effective date of the plan. Following the Court’s approval of disclosure statement and in furtherance, thereof, voting took place under the auspices of the company and primarily its agent,

23 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 Omni. The Court required that September 14th be the date upon And,

which solicitation be effective, and it was so done.

the Court established October 14th as a voting deadline, and that certainly has remained as is. We have not only a consensual plan, but an overwhelmingly consensual plan, and pursuant to the affidavit that was filed or I should say declaration of by Paul Deutch, on behalf of Omni, the numbers are obviously convincing. THE COURT: MR. PERKIEL: Yes. And just the record, Class 3, there

are only three classes of creditors that were entitled to vote under the plan, they were paired. Class 3, there were

five that voted, all five accepted, the totality 103,063,000 all in favor. rejected. Class 4, Your Honor, 56 voted, 46 accepted, 10

We had 171,000,000 and change in acceptance

representing 82%, and we had 897,000 rejecting representing 17% so, again, satisfies the acceptance necessary. And with

respect to class 5, we had 248 that were counted for voting purposes, 239 accepted representing –THE COURT: MR. PERKIEL: favor of the 4,735,000. THE COURT: MR. PERKIEL: THE COURT: Yes. Rejected. And that’s the general unsecured 96.37 -- yeah, 49,000,000 and change in

24 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 creditors, of course. MR. PERKIEL: That’s correct, Your Honor; so in each

case, in excess of 90%, accepting both the number and dollars. THE COURT: Yes. With that, Your Honor, I just want to

MR. PERKIEL:

refer and formally proffer the affidavits or declarations first of Mr. Deutch, on behalf of the voting that I just addressed. And as well Joseph Trundale, the CEO and

President of Perkins Marie Callender, whose been identified in Court present. THE COURT: MR. PERKIEL: Yes. Whose affidavit I offer to proffer in

support of confirmation of the plan, of the second amended plan of reorganization. There is a supplemental affidavit of

Joe Santarlasci, Principle of –- would be Santarlascis national advisor for the company, I offer that as well. THE COURT: MR. PERKIEL: All right. We also have, and I think the Court

already noted a memorandum of law on file, which identifies all the points I believe of 1129(a)1-16 where applicable and 1129(9)(b). And, we have submitted to previously a draft, I The draft

think it was submitted to you on Thursday.

proposed of findings and facts inclusions of law and order. THE COURT: Yes.

25 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 MR. PERKIEL: With respect to the latter, Your

Honor, it is our intention, I think Mr. Poppiti referenced that earlier that we are going to tinker with it, and if nonmaterial ways, to make sure that everyone is on board with it. I will bring to the Court’s attention that we expect a

couple of changes that I guess are worthy of note, but once again not material, and I don’t believe at the end of the day will be controversial among the wordsmiths involved in the drafting of the finalization of the document. One is just to be sure Mr. Poppiti has addressed it. We’re going to be adding Omega and the Tri-State term sheets to the confirmation order. THE COURT: MR. PERKIEL: Yes. And making sure that the texts There

properly reflects the enabling of those term sheets.

has been recent negotiations whereby if Your Honor will recall there is a provision in terms of Class 5 general unsecured creditors benefits and entitlements, that they in addition to the lesser of 14% or the cash pool subject to certain details. There is the enhancement there to, pre-

existing of 20% at the moment of avoidance action and recovery. THE COURT: MR. PERKIEL: Right. That has been renegotiated to 45%, and

we will, I believe though I’ll confer with my colleagues, we

26 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 like. think that that quote modification to the plan might suffice appearing in the confirmation order rather than having to present a third amended plan of reorganization driven by that. Now, however, whichever turns out to be the most

effective procedure and most comfortable for my colleagues and the Court, either way. But it’s a non-controversial, and

it is -- it’s not adverse, materially adverse –THE COURT: MR. PERKIEL: Certainly. -- post acceptance and post voting

that would require any kind of re-solicitation whatsoever. THE COURT: That’s right, and I will be satisfied

with whatever the parties agree. MR. PERKIEL: Okay and there will be some additional

language -- there was proposed language in the confirmation order regarding the perpetuation of benefits that were preexisting prior to Chapter on benefits, employee benefits -– THE COURT: MR. POPPITI: Yes. -- retirement benefits, pensions and

Those were all perpetuated or assumed by the

Debtor during the course of the Chapter 11 by a virtue of first day orders. And those will now be effectively

reinstated with and in accordance with their terms as of the effective date without any negative or other effect of the bankruptcy. So they’ll roll forward and they will stand on

their merits whether by virtue of a prior approvals, vested

27 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 together. interest, or anything else. I guess, Your Honor, just too kind of tie it all The plan is very simple and straightforward,

fortunately, driven by the capital structure of the company we started. There’s going to be payment in full of allotted

administrative claims, professional fees, priority tax claims, and the DIP financing, it will be paid in full. classified, no need to classify them. There are unimpaired classes, Class 1 which are other priority claims; Class 2 which are other secured claims, the incidental purchase money mortgage type’s secured claims; Class 6 convenience claims; Class 7 inter-company claims; Class 9 the equity interest and un-subsidiary Debtors. THE COURT: MR. PERKIEL: Right. The only three classes affected here, Not

for any intents and purposes, are 3, 4 and 5 in terms of the ability, or opportunity to share, and I think we’ve been there in terms of what their treatment is as reflected both in the memorandum of law and plan and disclosure statement. Classes 8 and 9A, those are not equity interest; well 8 is subordinated claims and 9A are equity interest in PMC Holding and PMCI. canceled. Those interests are being effectively

Their subordinated claims are equity claims; they

will not receive anything under the plan or retain anything

28 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 under the plan. And, just as a matter of law, no one junior So,

to them will receive anything or retain anything.

therefore, pursuant to 1129(b)2, the fact that they are deemed rejected is not impediment to confirmation at this time. THE COURT: MR. PERKIEL: Right. Your Honor, if you have any questions

of me, I’m happy to address them. It’s our intention to provide you later with an updated confirmation order. stand here at the Courts mercy. THE COURT: I don’t know that I’ve had that So I

invitation before, Mr. Perkiel, but I do not have questions. Let me just make certain of one thing and that is for our evidentiary record. Does anyone have any objection to the

admission of the declarations in support of confirmation or wish to cross examine the declarants? Okay hearing no one, I

will admit those declarations into evidence. They certainly provide the evidentiary support necessary for confirmation. Does anyone else wish to be heard? Alberino, either? (Judge and attorneys laughing and exchanging commentary) MR. SOMERSTEIN: Your Honor, I only stand to Mr. Somerstein, Mr.

congratulate the company –THE COURT: You bet. -- and to echo the remarks of Mr.

MR. SOMERSTEIN:

29 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 Perkiel that we’ve worked constructively, sometimes cooperatively, sometimes engaged in some difficult negotiations, but we’re here today because we’ve worked constructively. All the constituencies, the Debtors, the

restructured support agreement, this Restructuring Support Parties and Wells Fargo, and we thank the Court. THE COURT: Thank you, Mr. Somerstein. Mr.

Alberino, good morning. MR. ALBERINO: very brief. Good morning, Your Honor, I’ll be

I just want to make sure it is noted, our

gratitude and appreciation for all the work that’s been done by Mr. Perkiel and the Troutman team, and Young Conaway team, as well as the tireless work of Mr. Trundale, Mr. Santarlasci, and the rest of the folks –THE COURT: Yes. -- over at the company.

MR. ALBERINO: THE COURT:

Yes. Mr. Somerstein, no kisses, but it

MR. ALBERINO:

shouldn’t be lost on Your Honor what we’ve accomplished in four and half months here in bankruptcy including a very intensely negotiated deal with the Creditors Committee that paved the way, I think, for a consensual deal with the economics, as well as governance for the company. I think

it’s unusual in these days to see a lot of successful retail restructurings, and I think there are a lot of folks in the

30 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 Courtroom that should be proud of the work they’ve done here. I think, you know, we’ve used bankruptcy for the benefit of the company, and the benefit of the estate –THE COURT: Yes. -- and we’re coming out I believe a

MR. ALBERINO:

much stronger company having succeeded on significant operational improvements in the lease arena, the franchise arena, as well as working out resolutions with counterparties to our franchise development parties. So, I think the

company coming out is extremely well positioned, not only from a balance sheet perspective, but from an operational perspective. And you know given the amount of work that’s

been accomplished, I know Your Honor hasn’t seen a lot of it in front of you, but as you know a tremendous amount of work and effort has been put into this case by a number of different parties. So I just would like to on behalf of the Waysata entities thank all the professionals as well as the committee, the company and Wells Fargo for their help, and cooperation in the successful restructuring. THE COURT: Thank you, thank you, Mr. Alberino. Mr.

Austin, I neglected to mention your name and I saw you there, and was about to ask you if you had any remarks. MR. AUSTIN: Thank you, Your Honor; for the record

I’m Jesse Austin from the firm of Paul Hastings with Richard

31 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 Riley from Duane Morris. We have represented in this case

Wells Fargo Capital Finance which has been the, was the agent and lender under the company’s pre-petition credit facility, has been the agent and the lender under the Debtor in possession credit facility, and will be the agent and lender under the first lien exit facility. THE COURT: MR. AUSTIN: Yes. I join in thanking the Court for its

time and the process to move this case forward, as well as echo the comments made by everyone else as far as getting this deal done in a fairly quick basis. I did want to note

to the Court that the, and not in an effort to rain on any parade, but the documents which were filed I guess both this morning and maybe even last night relative to the first lien exit credit facility, the new secured term loan, you know, creditor agreement, they are being filed in whatever is in their most current form. THE COURT: MR. AUSTIN: Okay. We did distribute the mark up of those I know that the

documents at approximately 7:45 last night.

Waysata entities, as well as the Debtor still needs to review some of the comments and points made. With respect to the

second new term loan, we have to review it and make sure it’s caught up with the other documents. I’m not anticipating

that they’ll be any substantive major issues, but I did want

32 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 to know that there’s still some movement within those documents, and as Mr. Perkiel knows whatever is the final will be filed prior to the effective date. THE COURT: MR. AUSTIN: Yes. So that the Court will, and all parties

that would be reviewing the docket, will have seen what those documents are in their final form. The only other

documentation, primary documentation that has some things that we at least have to check, we did get some comments just over the weekend for the first time on some of the collateral security documents. I know we have to review them for our

purpose, I know the Waysata because they’re mirror imaging the, that documentation we’ll have to review for its purpose. We also need to double check -- we requested certain modifications to some of the corporate documents. For

example, the ones initially drafted, I think, had some restrictions on allowing the pledge of stock of subsidiary entities, which we have to obviously deal with. THE COURT: MR. AUSTIN: Yes. And the only other thing that I know on

a major basis, at least from Wells Fargo standpoint, is that as a subsidiary of a national bank, it does need to receive information of the officers to the extent it doesn’t already have that as well as the new board members in respect to compliance with the Patriot Act. That request is

33 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 outstanding; that is something that has to be done solely though prior to the effective date, but I did want the Court to know to kind of what the, what may well be the spectrum of what’s still is a little bit outstanding just to complete the closing. It is my understanding these Debtors want to

attempt to go effective somewhere around November 15th, so we have some time to do that. THE COURT: Okay. Is confirmation contingent on

those documents, agreement upon those documents? MR. AUSTIN: The way the confirmation order is

written, Your Honor, was that it would be, the documents that are either, have been filed today or before the effective date so that we actually –THE COURT: MR. AUSTIN: Okay. -- have built in some provisions that

once they’re final, if their final as of the effective date than we file those and that it would pick that up. have that flexibility built in to the order. THE COURT: you, Mr. Austin. Very well, all right, thank you. Thank So we

Anyone else?

Well I am certainly, I spent There were a lot of I

all day yesterday reading the papers.

papers to read, but they were very, very well prepared. want to –- I will enter an order of confirmation. I

certainly am satisfied that all of the requirements, the Bankruptcy Code and, in particular, Section 1129 have been

34 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 met. I am most pleased that it’s clear that the plan has been submitted in good faith and that the plan is feasible, and that gives me great comfort in the fact that the DIP lender, the pre-petition lender, the DIP lender is also the exit financing provider because that shows that they, in particular, are confident in the future success of the business. And I want to really first of all congratulate management. I know you come into bankruptcy, it’s got to be

a very frightening experience to expose the future of the company to a bunch of lawyers and a Judge. But, I’m pleased

that your hard work and your confidence in the legal system have been borne fruit here, and I wish you well going forward. And counsel has worked very, very tireless as I think it was Mr. Perkiel pointed out, it really did require a very minimal amount of my time, relatively speaking for a case of this size and this importance, and counsel really performed extremely ably. And a case such as this to have

moved as quickly as it did and as proficiently is a testament to all of the lawyers involved and their professionals, the financial advisors obviously as well. And, I did do some due diligence. I tried Marie

Callender’s lasagna, and I thought it was excellent, so I

35 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 will note that for the record. And beyond that, counsel, I

will look for an order, and it’s been a great pleasure to have all of you here, and I know that Mr. Brady is going to come pester me for a date or two, but other than that the –an order will be signed. MR. PERKIEL: THE COURT: Thank you very much, Your Honor. Mr. Perkiel, thank you, it’s been a

great pleasure to have you here in Court, and Ms. Cohen and all of your colleagues, and Mr. Alberino and Mr. Somerstein, and always Mr. Austin, and congratulations to all of you. MR. PERKIEL: THE COURT: MR. BRADY: Thank you very much. Mr. Brady. Thanks, Your Honor, I would like you to

remember the comment you just made about a minimal amount of Court time –THE COURT: MR. BRADY: Absolutely. -- we’ve asked for. Your Honor, there

are ongoing negotiations with Castle Harlen, the current equity sponsor -THE COURT: MR. BRADY: Yes. -- for the company, and the parties are Given the impact of such a

close to finalizing an agreement.

settlement on closing and emergence, we were hoping to get a holding date to bring that settlement to the Court to the extent it’s finalized prior to the next Omnibus date.

36 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 so we –THE COURT: MR. BRADY: Yes. -- expect it to take very little time. -THE COURT: MR. BRADY: Oh you’re smart. -- who said it’s possible you could fit THE COURT: MR. BRADY: All right. We did check with your Courtroom Deputy

us in on either November 15th or the 16th at 9:00 A.M., but she was not sure whether her calendar was updated, so. THE COURT: that here. Let’s see, I could, I’ll certainly do

There’s no questions this takes a great priority,

and the only thing I was looking; the 15th at 9:00 is fine with me. I’m just looking, that’s probably -- the reason I’m

looking I have a matter on the 16th at noon that probably won’t proceed. You know it’s an older case; would that be I would have two hours on that, at that

better for counsel? time. MR. BRADY:

The thought is this will be consensual,

So I think we’re really fine with whatever Your Honor is most comfortable with. THE COURT: MR. BRADY: THE COURT: Then let’s do it at 9:00 on the 15th. Thank you very much, Your Honor. You bet and, all right and presumably if

you resolve everything that will be by certificate of

37 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 November 7, 2011 Date CERTIFICATE I certify that the foregoing is a correct transcript from the electronic sound recording of the proceedings in the aboveentitled matter. counsel? MR. BRADY: Yes, Your Honor, I imagine since we’ll

have to shorten time most likely -THE COURT: MR. BRADY: Okay. -- we may not get to that point, but to

the extent that we do, we certainly would advise the Court there are no objections. THE COURT: Brady, anyone else? All right, thank you. Thank you, Mr.

Well I hope you all take an opportunity

to enjoy your success and to celebrate a good result, an excellent result. Sometimes we move on from one matter to

another without ever really I think reflecting upon what we’ve achieved, and you certainly have achieved a lot here, and thank you, and we will stand at recess. Good day to you.

UNITED STATES BANKRUPTCY COURT District of Delaware
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 10/31/2011 was filed on 11/8/2011 . The following deadlines apply: The parties have seven 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 11/29/2011 . If a request for redaction is filed, the redacted transcript is due 12/9/2011 . If no such notice is filed, the transcript may be made available for remote electronic access upon expiration of the restriction period, which is 2/6/2012 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: 11/8/11

(ntc)

Notice Recipients
District/Off: 0311−1 Case: 11−11795−KG User: Al Form ID: ntcBK Date Created: 11/8/2011 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