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1 2 3 4 5 6 7 8 9 In re 10 TC GLOBAL, INC., 11 Debtor.

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

HONORABLE KAREN A. OVERSTREET HEARING DATE: WEDNESDAY, OCTOBER 10, 2012 BEFORE THE HONORABLE TIMOTHY W. DORE HEARING TIME: 3:30 P.M. LOCATION: SEATTLE, COURTROOM 8106 SUBJECT TO ENTRY OF ORDER SHORTENING TIME FOR HEARING

UNITED STATES BANKRUPTCY COURT WESTERN DISTRICT OF WASHINGTON

No. 12-20253

EMERGENCY MOTION FOR ORDER AUTHORIZING DEBTOR TO CONTINUE USE OF EXISTING CASH MANAGEMENT SYSTEM AND PREPETITION BUSINESS BANKING ACCOUNTS AND CHECKS, AND TO HONOR PREPETITION GIFT CARDS

TC Global, Inc. (“Debtor”) dba Tully’s Coffee, debtor-in-possession herein, moves the Court for an order authorizing it to (1) continue the use of its existing cash management system, pre-petition business banking accounts and checks, and (2) honor prepetition gift cards. This Motion is based upon the files and records herein and upon the accompanying Declaration of Scott Pearson. I. FACTUAL BACKGROUND

The Debtor commenced this Chapter 11 case on October 10, 2012 (“Petition Date”). The Debtor is operating its business and managing its affairs as a debtor-in-possession under 11 U.S.C. §§ 1107 and 1108. A detailed discussion of the Debtor’s business operations and the events leading to EMERGENCY MOTION FOR ORDER AUTHORIZING DEBTOR TO CONTINUE USE OF EXISTING CASH MANAGEMENT SYSTEM – Page 1
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B USH S TROUT & K ORNFELD
LAW OFFICES

LLP

5000 Two Union Square 601 Union Street Seattle, Washington 98101-2373 Telephone (206) 292-2110 Facsimile (206) 292-2104

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this Chapter 11 are set forth in the Declaration of Scott Pearson in Support of First Day Motions (“Pearson Declaration”). II. A. Cash Management System As described more fully below, prior to the commencement of this Chapter 11 case, the Debtor maintained at least 81 bank accounts with various depository institutions. A list of the bank accounts and the purpose of each is attached hereto as Exhibit A, as well as Exhibit A to the Pearson Declaration. Each store’s deposits are identified either through the account into which it deposits (as is the case with US Bank accounts) or through the deposit slips used to deposit into the account (as is the case with Bank of America Account 0907). Pearson Decl. All Depository accounts at US Bank are swept into US Bank Account 2993 (“Concentration Account”) on a daily basis, leaving a zero balance in each account. Id. The Debtor maintains disbursement accounts for accounts payable (US Bank 8315), payroll and payroll taxes (US Bank 3009 and 3025) (“Disbursement Accounts”). Id. All Disbursement Accounts maintain zero balances and pull funds from the Concentration Account daily to pay as needed. Id. The only accounts that require manual intervention to manage are: (1) US Bank Account 3033 which the Debtor funds on a weekly basis from the Concentration Account for monthly payment to the State of Washington for sales taxes; and (2) Bank of America Account from which the Debtor wires deposited funds to the Concentration Account on a weekly basis. Id. /// /// EMERGENCY MOTION FOR ORDER AUTHORIZING DEBTOR TO CONTINUE USE OF EXISTING CASH MANAGEMENT SYSTEM – Page 2
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CASH MANAGEMENT SYSTEM

B USH S TROUT & K ORNFELD
LAW OFFICES

LLP

5000 Two Union Square 601 Union Street Seattle, Washington 98101-2373 Telephone (206) 292-2110 Facsimile (206) 292-2104

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III.

PRE-PETITION CHECKS AND CHECKING ACCOUNTS

The parties with which the Debtor transacts business will be aware of its status as a debtor-inpossession. Pearson Decl. It would be needlessly burdensome, as well as disruptive to business operations, for the Debtor to change its bank accounts and checks. Id. The Debtor therefore respectfully requests that it be authorized to use its prepetition checks and checking accounts without placing the label “debtor-in-possession” on each check. IV. GIFT CARDS AND CUSTOMER DEPOSITS

As part of the Debtor’s operation, it sells gift cards and loyalty cards, which the customer funds in advance and which are accepted as payment for purchases in the ordinary course of the Debtor’s business (together, the cards are referred to herein as “Customer Cards”). Pearson Decl. The denomination of the Customer Cards generally ranges from $5 to $100. Id. Redemption of Customer Cards in August 2012 was approximately $645,261. In order to 1) maintain customer relations and the orderly flow of its business; 2) avoid harm to the Debtor's business; and 3) ensure that customers will continue to purchase gift cards, a meaningful source of revenue, the Debtor requests authority to honor Customer Cards purchased prepetition that are presented by customers post-petition. Id. None of the Customer Cards exceed $2,600, the priority deposit amount set forth in 11 U.S.C. § 507(a)(7). Id. V. CONCLUSION

Based upon the foregoing, the Debtor respectfully requests that the Court enter an order authorizing it to continue use of its existing cash management system, continue use of its prepetition /// /// /// EMERGENCY MOTION FOR ORDER AUTHORIZING DEBTOR TO CONTINUE USE OF EXISTING CASH MANAGEMENT SYSTEM – Page 3
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B USH S TROUT & K ORNFELD
LAW OFFICES

LLP

5000 Two Union Square 601 Union Street Seattle, Washington 98101-2373 Telephone (206) 292-2110 Facsimile (206) 292-2104

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bank accounts and checks, and continue to honor prepetition gift cards in the ordinary course of business. DATED this 10th day of October, 2012. BUSH STROUT & KORNFELD LLP

By

/s/ Christine M. Tobin-Presser Christine M. Tobin-Presser, WSBA #27628 Attorneys for TC Global, Inc.

EMERGENCY MOTION FOR ORDER AUTHORIZING DEBTOR TO CONTINUE USE OF EXISTING CASH MANAGEMENT SYSTEM – Page 4
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B USH S TROUT & K ORNFELD
LAW OFFICES

LLP

5000 Two Union Square 601 Union Street Seattle, Washington 98101-2373 Telephone (206) 292-2110 Facsimile (206) 292-2104

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EXHIBIT A TO CASH MANAGEMENT MOTION
Bank US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK Account Number 1-539-1027-4767 1-539-1027-4775 1-539-1027-4783 1-539-10690558 1-539-1027-4825 1-539-1027-4833 1-539-1027-4866 1-539-1027-4874 1-539-1027-4890 1-539-1027-4916 1-539-1027-4924 1-539-1027-4957 1-539-1027-4973 1-539-1027-4981 1-539-1027-4999 1-539-1027-5004 1-539-1027-5012 1-539-1027-5020 1-539-1027-5038 1-539-1027-5053 1-539-1027-5061 1-539-1027-5079 1-539-1027-5095 1-539-1027-5129 1-539-1027-5137 1-539-1027-5145 1-539-1027-5152 1-539-1027-5160 1-539-1027-5178 1-539-1027-5186 1-539-1027-5228 1-539-1027-5236 1-539-1027-5244 1-539-1027-5251 1-539-1027-5269 1-539-1027-5277 1-539-1027-5285 1-539-1027-5293 1-539-1027-5301 1-539-1027-5319 1-539-1027-5327 1-539-1027-5343 1-539-1027-5350 1-539-1027-5368 1-539-1027-5384 Purpose Store #1003 Cash Deposits Store #1004 Cash Deposits Store #1005 Cash Deposits Store #1007 Cash Deposits Store #1010 Cash Deposits Store #1011 Cash Deposits Store #1015 Cash Deposits Store #1017 Cash Deposits Store #1019 Cash Deposits Store #1022 Cash Deposits Store #1024 Cash Deposits Store #1027 Cash Deposits Store #1029 Cash Deposits Store #1030 Cash Deposits Store #1031 Cash Deposits Store #1032 Cash Deposits Store #1034 Cash Deposits Store #1035 Cash Deposits Store #1037 Cash Deposits Store #1039 Cash Deposits Store #1042 Cash Deposits Store #1044 Cash Deposits Store #1046 Cash Deposits Store #1049 Cash Deposits Store #1050 Cash Deposits Store #1051 Cash Deposits Store #1052 Cash Deposits Store #1053 Cash Deposits Store #1056 Cash Deposits Store #1066 Cash Deposits Store #1073 Cash Deposits Store #1075 Cash Deposits Store #1076 Cash Deposits Store #1077 Cash Deposits Store #1078 Cash Deposits Store #1079 Cash Deposits Store #1083 Cash Deposits Store #1084 Cash Deposits Store #1087 Cash Deposits Store #1088 Cash Deposits Store #1089 Cash Deposits Store #1093 Cash Deposits Store #1094 Cash Deposits Store #1095 Cash Deposits Store #1097 Cash Deposits

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US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK US BANK BANK OF AMERICA

1-539-1027-5392 1-539-1027-5400 1-539-1027-5418 1-539-1066-2110 1-539-1066-4280 1-539-1066-3316 1-539-1069-3867 1-539-1069-6282 1-539-1069-4840 1-539-1069-4832 1-539-1066-4090 1-539-1066-4108 1-539-1069-7926 1-539-1069-7918 1-539-1027-3082 1-539-1027-9220 1-539-1027-5426 1-539-1027-5442 1-539-1027-5459 1-539-1027-5475 1-539-1027-5483 1-539-1027-5491 1-539-1027-5509 1-539-1027-5517 1-539-1027-5566 1-539-1027-5574 1-539-1027-5616 1-539-1027-5624 1-521-0001-8315 1-539-1027-3033 1-539-1027-6481 1-535-9509-2401 1-539-1027-2993 1-539-1027-3025 1-539-1027-3009 41700907

Store #1098 Cash Deposits Store #1099 Cash Deposits Store #1100 Cash Deposits Store #1101 Cash Deposits Store #1102 Cash Deposits Store #1103 Cash Deposits Store #1105 Cash Deposits Store #1106 Cash Deposits Store #1108 Cash Deposits Store #1109 Cash Deposits Store #1120 Cash Deposits Store #1121 Cash Deposits Store #1123 Cash Deposits Store #1124 Cash Deposits Store #1125 Cash Deposits Store #1400 Cash Deposits Store #2001 Cash Deposits Store #3002 Cash Deposits Store #3003 Cash Deposits Store #3006 Cash Deposits Store #3007 Cash Deposits Store #3009 Cash Deposits Store #3011 Cash Deposits Store #3014 Cash Deposits Store #3019 Cash Deposits Store #3021 Cash Deposits Store #3032 Cash Deposits Store #3034 Cash Deposits Check Disbursements Account WA Sales Tax Funding Account Debit/Credit Card Receipts, zba into Concentration Acct Corporate Lockbox, funds transferred to concentration account weekly Concentration Account. Main Cash Acct, All Accounts Pull or Fund this Account Payroll taxes funded from this account Payroll Check Disbursements Account 10 various stores' Cash Deposits

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1 2 3 4 5 6 7 8 9 10 In re 11 TC GLOBAL, INC., 12 Debtor. 13 14 15 16 17 18 19 20 21 22 23 24 25 26 [PROPOSED] ORDER AUTHORIZING DEBTOR TO CONTINUE USE OF EXISTING CASH MANAGEMENT SYSTEM AND PRE-PETITION BUSINESS BANKING ACCOUNTS AND CHECKS, AND TO HONOR PREPETITION GIFT CARDS No. 12-20253 UNITED STATES BANKRUPTCY COURT WESTERN DISTRICT OF WASHINGTON

THIS MATTER came before the Court upon the Emergency Motion for Order Authorizing Debtor to Continue Use of Existing Cash Management System and Pre-Petition Business Banking Accounts and Checks, and to Honor Prepetition Gift Cards (“Cash Management Motion”) filed by TC Global, Inc. (“Debtor”) dba Tully’s Coffee, debtor-in-possession herein. The Court has reviewed the files and records herein and finds that cause exists for the requested relief. Now, therefore, it is hereby ORDERED: 1. The Cash Management Motion is granted;
B USH S TROUT & K ORNFELD
LAW OFFICES LLP

[PROPOSED] ORDER AUTHORIZING DEBTOR TO CONTINUE USE OF EXISTING CASH MANAGEMENT SYSTEM – Page 1
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2.

The Debtor is authorized to continue use of its existing Cash Management System as

that term is defined in the Motion; 3. The Debtor is authorized to continue use of its prepetition bank accounts and checks;

4.

The Debtor is authorized to continue to honor the gift cards purchased prepetition in

the ordinary course of business. / / /End of Order/ / / Presented by: BUSH STROUT & KORNFELD LLP

By_________________________________ Christine M. Tobin-Presser, WSBA #27628 Attorneys for TC Global, Inc.

[PROPOSED] ORDER AUTHORIZING DEBTOR TO CONTINUE USE OF EXISTING CASH MANAGEMENT SYSTEM – Page 2
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B USH S TROUT & K ORNFELD
LAW OFFICES

LLP

5000 Two Union Square 601 Union Street Seattle, Washington 98101-2373 Telephone (206) 292-2110 Facsimile (206) 292-2104

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