Case No. 301-12036, Jointly AdministeredUnited States Bankruptcy Court, M.D. Tennessee, Nashville Division.
December 10, 2002
Gary Brown, Charles K. Grant, Dinsmore Shohl, LLP, Nashville, TN., and Kim Martin Lewis, Tim J. Robinson, Dinsmore Shohl, LLP, Attorneys for Debtors and Debtors-in-Possession.
ORDER GRANTING THE DEBTORS DISCRETIONARY AUTHORITY TO MAKE PAYMENTS TO PROFICIENT FOOD COMPANY
KEITH M. LUNDIN, United States Bankruptcy Judge.
Upon the motion (the “Motion”) of Phoenix Restaurant Group, Inc. (“PRG”) and its above-captioned direct and indirect subsidiaries (the “Subsidiary Debtors”), debtors and debtors-in-possession in the above-captioned cases (Phoenix Restaurant Group, Inc. and the Subsidiary. Debtors collectively, the “Debtors”), for the entry of an order granting discretionary authority to the Debtors to make payments on account of prebankruptcy claims of a critical food supply vendor, Proficient Food Company (“PFC”); and notice of the Motion being adequate, and no further notice being necessary, and finding that good and sufficient cause exists to grant the relief requested by the Motion, as amended by the Supplemental Terms to Critical Vendor Motion (Proficient Food Company) attached hereto (the “Supplemental Terms”), and that (he relief requested by the Motion is necessary to preserve the business of the Debtors, and that the failure to pay certain of PFC’s pre-petition obligations in accordance with the Supplemental Terms would pose a real and significant threat to Debtors’ business operations, and that such payments are essential to the Debtors’ ability to reorganize, accordingly, it is hereby
ORDERED, that the Motion is granted as specifically set forth herein; and it is further
ORDERED, that the Debtors are authorized, but not directed, to comply with the Supplemental Terms, and so long as the Debtors comply with the Supplemental Terms, in accordance with paragraph 7 of the Supplemental Term, PFC shall provide goods and services to the Debtors on identical pricing terms and conditions as in effect prior to the Petition Date (as defined in the Motion).
SUPPLEMENTAL TERMS TO CRITICAL VENDOR MOTION (PROFICIENT FOOD COMPANY)
Timothy Robinson for the Debtor
Beth Dunning for the Creditors Committee
Craig Gabbert/Barbara Holmes for LH Leasing
Mark Duedall for Proficient Food Co.
Beth Roberts Derrick, AUST
1. The total to be paid to Proficient Food Company, Inc. on account of its prepetition claims, PACA claims, and Reclamation claims is $900,000 (“Critical Vendor Payment”).
2. Funds received by or on behalf of Proficient Food Company since Petition Date in excess of cost goods sold on the Portion Date, will be credited against the Critical Vendor Payment (approximately $311,000 through November 26, 2001).
3. Remainder of the Critical Vendor Payment will be paid $50,000 per week, by premium of 10,000 per day in wire transfer payments.
4. Balance of $900,000 will be paid at closing of sale as a super priority claim, junior only to Debtor in Possession financing liens. However, the balance loses its super priority status in the event of conversion to a chapter 7 case; in that instance, it will be on the same priority as other chapter 11 administrative claims,
5. When the Order approving the Critical Vendor Motion is final and not subject to appeal, Proficient Food Company’s PACA claim of approximately $194,000 is waived.
6. All Critical Vendor Payments will be applied first to payment of the Reclamation claim of approximately $540,000.
7. Proficient Food Company shall continue to sell goods to Phoenix Restaurant Group, Inc. and its affiliates through March 8, 2002, assuming all payments in paragraph 3 herein continue to be made.
8. In the event Proficient Food Company fails to deliver goods as agreed upon, Proficient Food Company shall be served by the Debtor with a Notice of Default (also to be filed with the Bankruptcy Court). Proficient Food Company shall have 10 days to cure the default or obtain an Order from the Bankruptcy Court excusing their cure. In the event the default is not cured and there is no Bankruptcy Court excusing the cure, Proficient Food Company shall return to Phoenix Restaurant Group. Inc. and its affiliates all payments received pursuant to the Critical Vendor Order.
9. If the relationship between Proficient Food Company and Phoenix Restaurant Group. Inc. shall terminate, the payments provided for in the Critical Vendor Order shall no longer be required of Phoenix Restaurant Group, Inc. and its affiliates.
10. All parties in interest reserve all rights to challenge, or object to any payments in excess of the Critical Vendor Payment that may be proposed or sought after the expirated the Order.