52923581;1 

UNITED STATES BANKRUPTCY COURT 

SOUTHERN DISTRICT OF FLORIDA 

West Palm Beach Division 

www.flsb.uscourts.gov

In re: Chapter 11

TOOJAY’S MANAGEMENT LLC, Case No. 20-14792 

Debtor. 

/ 

DECLARATION OF EDWARD MAXWELL PIET IN SUPPORT OF 

THE DEBTORS’ CHAPTER 11 PETITIONS AND FIRST DAY MOTIONS 

I hereby declare that the following is true based upon my personal knowledge of the 

business records of Debtor TooJay’s Management LLC. 

I. INTRODUCTION 

1. My name is Edward Maxwell Piet. I am over the age of 18 and am competent to 

testify. I am the President and CEO of TooJay’s Management LLC (“Management”) 

(collectively with co-debtor TJ Acquisition, LLC (“Acquisition”), the “Debtors”). 

2. To minimize any adverse effects on the Debtors’ businesses as a result of the 

commencement of this Chapter 11 case, the Debtors intend to request various types of relief in 

certain “first day” applications and motions (collectively, the “First Day Motions”). The First 

Day Motions seek relief and are designed to, among other things: (a) continue the Debtors’ 

operations while in Chapter 11 with as little disruption as possible; (b) allow the Debtors to 

continue serving valued customers and operate their businesses pending a restructuring of 

Debtors’ debt; and (c) establish procedures for the smooth and efficient administration of this 

case. The relief requested in the First Day Motions will be crucial to the success of the Debtors’ 

efforts to facilitate an orderly reorganization to be effectuated through the contemplated 

restructuring of the Debtors’ debts. 

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3. I submit this declaration (the “Declaration”) in support of the Debtors’ Chapter 11 

voluntary petitions and the First Day Motions. As the President and CEO of Management, I 

have personal knowledge of the Debtors’ books and records, and the Debtors’ financial and 

operational affairs. Except as otherwise indicated, all statements in this Declaration are based 

upon my personal knowledge, my review of the Debtors’ books and records, relevant documents 

and other information prepared or collected by the Debtors’ employees or advisors. In making 

the statements herein based upon my review of the Debtors’ books and records, relevant 

documents and other information prepared or collected by the Debtors’ employees, I have relied 

upon these employees to accurately record, prepare and collect any such documentation and 

other information. 

4. If I were called to testify as a witness in this matter, I could and would 

competently testify to each of the facts set forth herein based upon my personal knowledge, 

review of documents, or my personal opinion, except as otherwise noted. I am authorized to 

submit this Declaration on behalf of the Debtors. 

II. BACKGROUND 

A. The Chapter 11 Filing. 

5. On April 29, 2020 (the “Petition Date”), the Debtors filed voluntary petitions in 

this Court for relief under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy 

Code”).1

1

 The Debtors in these Chapter 11 Cases, along with the last four digits of each Debtors’ federal tax identification 

number, are: TooJay’s Management LLC (0443) and TJ Acquisition, LLC (1455). The following additional 

affiliates of Debtors have or will file Chapter 11 Cases (collectively, “Filing Affiliates”): TooJay’s Altamonte, 

L.L.C. (5466), TooJay’s at Dr. Phillips, L.L.C. (8342), TooJay’s Bakery & Commissary, L.L.C. (7016), TooJay’s 

Boynton Oakwood Square, L.L.C. (3583), TooJay’s Colonial, L.L.C. (6530), TooJay’s Coral Springs, L.L.C. 

(5919), TooJay’s Dania Beach, L.L.C. (2030), TooJay’s Downtown Gardens, L.L.C. (0351), TooJay’s Downtown 

Tampa, L.L.C. (5046), TooJay’s Glades, L.L.C. (3884), TooJay’s Hallandale, L.L.C. (4596), TooJay’s Jupiter, 

L.L.C. (5986), TooJay’s Lake Worth, L.L.C. (3353), TooJay’s Naples, LLC (3336), TooJay’s N Ft. Lauderdale, 

L.L.C. (8438), TooJay’s of Lake Mary, LLC (0594), TooJay’s of Ocoee, L.L.C. (9601), TooJay’s of Sarasota, 

L.L.C. (7584), TooJay’s of the Villages, L.L.C. (0798), TooJay’s of West Boca, L.L.C. (8250), TooJay’s Palm 

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6. As of the date hereof, no official creditors committee has been appointed in this 

case. In addition, no trustee or examiner has been appointed. 

7. The Debtors are operating their businesses and managing their affairs as debtors 

in possession pursuant to Sections 1107 and 1108 of the Bankruptcy Code. 

B. Overview of the Debtors’ Corporate Structure. 

8. Management is a limited liability company organized under the laws of the State 

of Florida. 

9. Affiliate is a limited liability company organized under the laws of the state of 

Delaware. 

10. Affiliate owns 100% of the outstanding membership interests in Management.

11. The majority of the shares of Affiliate is owed by RGLA Holdings, L.L.C., BEP 

TooJays’s L.L.C., Branford Chain, Inc., Brookside Mezzanine Fund II, L.P., and Brookside 

Mezzanine Fund, III, L.P.

C. Description of Debtors Businesses, Historical Financial Performance, and Reasons 

for Filing Chapter 11.

12. Debtors are in the business of owning and operating twenty-eight (28) TooJay’s 

restaurants throughout the state of Florida, as well as a commissary and bakery. TooJay’s is a 

restaurant that focuses on providing the recipes and flavors of an authentic deli. Many TooJay’s 

restaurants are located at outlet malls or other large mixed-use retail properties. TooJay’s has an 

extensive menu and focuses on handcrafted sandwiches, made-from-scratch soups, salads and 

baked goods and is open for breakfast, lunch, and dinner. TooJay’s revenue streams come from 

its restaurants, take-out orders, delivery, and catering services. The headquarters of Management 

are located at 3654 Georgia Avenue, West Palm Beach, FL 33405. Management is the operating 

Beach, L.L.C. (1908), TooJay’s Plantation, L.L.C. (8882), TooJay’s Stuart, L.L.C. (4505), TooJay’s Vero, L.L.C. 

(0750), TooJay’s Villages III, L.L.C. (5254), TooJay’s VLG II, L.L.C. (2492), TooJay’s Waterford Lakes, L.L.C. 

(9363), TooJay’s Wellington Commons, L.L.C. (3967), and TooJay’s West Palm Beach, L.L.C. (4685). 

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entity that employs and pays the restaurant employees. Management is the 100% owner of its 

affiliates which affiliates lease their individual premises of the restaurants.

13. Prior to the COVID-19 pandemic and subsequent closures required by local 

governments, Debtors' businesses were operating profitably and there were plans to expand the 

chain into additional parts of Florida and the southeast region of the United States. Beginning in 

March 2020, the COVID-19 pandemic has caused the temporary or indefinite closure of the 

majority of Debtors’ restaurants and seriously affected the Debtors’ operations, revenues, and 

workforce. Although Debtors have taken proactive measures to reduce expenses wherever 

possible, including reducing the number of full-time employees and the fixed operating costs 

associated with Debtors' businesses making it challenging for Debtors to maintain profitability 

and other key financial health metrics that they are required to maintain by their lenders. As of 

March 29, 2020, Management was down to 290 full-time employees, compared to 1,114 at the 

end of February of 2020, and compared to 1,635 employees as of March of 2019. The reduction 

in sales has made it difficult for TooJay’s to maintain the level of profitability to which it has 

historically enjoyed and which it needs to continue operating its businesses.

14. In the interest of stabilizing their operations until closures related to COVID-19 

are lifted, Debtors recently obtained an approximately $6,400,000 loan under the Paycheck 

Protection Program, which they plan to use on payroll and other expenses allowed under the 

program, including future rent. 

15. The Debtors are filing this chapter 11 petition in order to preserve the going 

concern value of the Debtors’ assets and operations, restructure debt as necessary to the 

operations of the Debtor's business, and negotiate a plan of reorganization and to work with all of 

their existing landlords to address the impact of the temporary revenue reduction arising from 

state and city regulations mandating the closure of the dining room at all restaurants. 

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16. The Debtors have successfully operated a profitable enterprise for many years and 

are well known in the locations in which they operate. They project that the lifting of closures 

anticipated over the next two months will rehabilitate their operations. 

III. DEBTOR'S PRE-PETITION FINANCING 

17. Debtors regularly rely on a revolving line of credit and multiple types of loans to 

help it manage it cash, meet its working capital needs, run its day-to-day operations, fund buildouts of new stores, and invest in capital improvement and growth projects. Debtors have had a 

relationship with their primary secured lenders and senior subordinated secured lenders since 

2018 and 2013, respectively. 

18. Prior to the Petition Date, the Debtors entered into certain secured financing 

agreements with the Lenders. The primary lending agreement was for a total of $26,000,000 

across 8 different lenders and 3 different types of loans secured by cash collateral and other 

assets and equity of Debtors. The primary instrument that governs the agreement is that certain 

Credit Agreement dated as of October 26, 2018 by and between Management, as borrower and 

borrower representative, and each of its affiliates, and Monroe Capital Management Advisors, 

LLC, as administrative agent and lead arranger, as well as the various lenders affiliated with 

Monroe Lenders (collectively, “Monroe Lenders”) (“Credit Agreement”). The Credit Agreement 

was executed along with certain Schedules to the Credit Agreement, as well as a Guaranty and 

Collateral Agreement between the same parties that were parties to the Credit Agreement. A 

summary of the loan commitment amounts for each of these primary secured lenders is as 

follows: 

Name of lender

Revolving 

commitment

Term A loan 

commitment

Total B loan 

commitment TOTAL

Monroe Capital Corporation $159,090.91 $3,500,000.00 $477,272.72 $4,136,363.63

Monroe Capital Private Credit Fund II 

LP $120,049.40 $2,641,086.90 $360,148.21 $3,121,284.51

Monroe Capital Private Credit Fund II $16,314.23 $358,913.10 $48,942.70 $424,170.03

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19. Debtors also obtained certain pre-petition secured mezzanine loans in the amount 

of $7,000,000 from Brookside Mezzanine Fund II, L.P. and Brookside Mezzanine Fund III, L.P. 

(collectively, “Brookside Mezzanine”). The terms of those loans are contained in that certain 

Amended and Restated Securities Purchase Agreement dated September 14, 2015 between 

Management, Acquisition, all of the subsidiaries of Acquisition LLC, Brookside Mezzanine 

Fund II, L.P., Brookside Mezzanine Fund III, L.P., and Citizens Bank, N.A. (“Amended and 

Restated Securities Purchase Agreement”). The Amended and Restated Securities Purchase 

Agreement was executed at the same time as two Amended and Restated Senior Subordinated 

Notes, as well as an Amended and Restated Guaranty and Security Agreement between the same 

parties. The Amended and Restated Securities Purchase Agreement was subsequently 

amended by that certain First Amendment dated May 27, 2016, that certain Second Amendment 

dated July 6, 2017, and that certain Third Amendment dated October 26, 2018. A summary of 

the loan amounts for each of these subordinate secured lenders is as follows: 

20. All of the loans between Debtors and Monroe Lenders and Brookside Mezzanine 

were secured by collateral pursuant to the respective guaranty and collateral/security agreements 

between the parties, wherein Debtor granted to Lenders security interests in and liens upon all 

(Unleveraged) LP

Monroe Capital Private Credit Fund III 

LP $216,005.51 $4,752,121.20 $648,016.53 $5,616,143.24

Monroe Capital Private Credit Fund III 

(Unleveraged) LP $56,721.76 $1,247,878.80 $170,165.29 $1,474,765.85

Monroe Private Credit Fund A LP $250,000.00 $5,500,000.00 $750,000.00 $6,500,000.00

Monroe Capital Private Credit Fund I LP $136,363.64 $3,000,000.00 $409,090.91 $3,545,454.55

MC Financing SPV I, LLC $45,454.55 $1,000,000.00 $136,363.64 $1,181,818.19

TOTAL $1,000,000.00 $22,000,000.00 $3,000,000.00 $26,000,000.00

Name of lender Total loans

Brookside Mezzanine Fund II, L.P. $3,500,000.00

Brookside Mezzanine Fund III, L.P. $3,500,000.00

TOTAL $7,000,000.00

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assets of the Debtor. Monroe Lenders’ interest is allegedly secured by collateral consisting of 

all “cash collateral” within the meaning of 11 U.S.C. § 363(a) as well as all personal property, 

intellectual property, receivables, equity interests, and other types of property. Brookside 

Mezzanine’s interest is allegedly secured by collateral consisting of all “cash collateral” within 

the meaning of 11 U.S.C. § 363(a) as well as all other goods (including but not limited to 

fixtures) and personal property, whether tangible or intangible, and also pledged stock. 

21. Prior to the commencement of this case, Monroe Lenders and Brookside 

Mezzanine executed an intercreditor agreement dated October 26, 2018 wherein Brookside 

Mezzanine subordinated its lien in favor of Monroe Lenders as to Debtors’ collateral that secure 

both Lenders’ loans (“Subordination and Intercreditor Agreement”). 

22. As of April 29, 2020, the amount Monroe Lenders claims is due it by Debtors 

pursuant to the Pre-Petition Senior Secured Loan Agreements is $25,515,000 (“Senior Secured 

Debt”) and the amount Brookside Mezzanine claims is due it pursuant to the Pre-Petition 

Subordinated Secured Loan Agreements is $7,265,236 (“Subordinated Secured Debt”). 

23. In the one-year period preceding the commencement of this case, the net interest 

paid on loans and related fees averaged $167,130 per month for Senior Secured Debt. 

24. The Debtors estimate that the value as of April 29, 2020 of the cash collateral is 

(i) $5,759,149 in cash and cash equivalents; and (ii) $619,202 in accounts receivable. The 

Debtors estimate that the value as of April 29, 2020 of the fixed assets is (i) $592,712 in 

inventories and supplies; (ii) $14,818,075 in equipment and leasehold improvements; and (iii) 

$25,235 in deposits and other assets. Prior to the COVID-19 pandemic, annual EBITDA on a 

consolidated basis exceeded $6,700,000 based on the February 2020 trailing twelve month 

period. If market multipliers for similarly situated restaurant chains were applied to EBITDA for 

the Debtors’ pre-pandemic businesses, and, Debtors anticipate that the enterprise value expected 

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once operations stabilize post-pandemic would be between $44,000,000 and $50,000,000. Since 

the total value of Senior Secured Debt and Subordinated Secured Debt total approximately 

$32,780,236, the value of Debtors’ enterprise far exceeds the value of any Lenders’ liens. 

IV. FIRST-DAY MOTIONS AND NECESSITY FOR EMERGENCY HEARINGS2

25. As President and CEO of Management, I am generally familiar with the contents 

of each First Day Motions (including the exhibits thereto) described in further detail herein. 

Based upon that general familiarity and the information provided to me by other members of the 

Debtors’ management team and my colleagues who report to me or provide information to me in 

the ordinary course of the Debtors’ business, I believe that the relief sought in each First Day 

Motions is necessary to: (a) prevent additional loss of valuable employees; (b) enable the 

Debtors to operate in Chapter 11 with minimal disruption or loss of productivity and value; (c) 

allow the Debtors to continue serving valued customers and operating the business pending a 

restructuring of its debt; and (d) prevent immediate and irreparable harm to the Debtors’ 

businesses as a whole. Concurrently herewith, the Debtor has filed or will be filing the following 

First Day Motions for which the Debtor requests that the Court conduct a hearing as soon as 

possible after the commencement of the Debtor's bankruptcy case (the “First Day Hearing”): 

i. Debtors’ Emergency Application For Approval, on an Interim and Final Basis, of 

Employment of Michael I. Goldberg, Eyal Berger and the Law Firm of Akerman 

LLP as General Bankruptcy Counsel for the Debtor-In-Possession Effective as of 

the Petition Date; 

ii. Debtors’ Emergency Motion For Entry of an Order Authorizing the Debtors to 

Use Cash Collateral and Provide Adequate Protection; 

iii. Debtor’s Emergency Motion for Entry of an Order: (I) Authorizing the Payment 

of Priority Pre-Petition Wages, Salaries, Earned Bonuses, and Employee Benefits; 

and (II) Authorizing the Debtor to Continue the Maintenance of Employee 

Practices and Benefit Plans and Programs in the Ordinary Course of Business; 

2 Any capitalized terms not otherwise herein defined are ascribed the same meaning as in each respective 

First Day Motion. 

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26. I have reviewed each of the First Day Motions, including the exhibits thereto, and 

I believe that the relief sought in each of the First Day Motions is narrowly tailored to meet the 

goals described above and, ultimately, will be critical and necessary to the Debtor's ability to 

maximize the value of its assets for its creditors and shareholders, maintain their day-to-day 

operations, and generally maintain and preserve the going concern, enterprise value of the 

business. 

27. The Debtor will provide notice to all motions presented to the Court for 

consideration as First Day Motions on all parties identified on the master service list. 

A. Debtors’ Emergency Application for Approval, on An Interim and Final Basis, of 

Employment of Michael I. Goldberg, Eyal Berger and the Law Firm of Akerman 

LLP as General Bankruptcy Counsel for the Debtor-In-Possession Effective as of the 

Petition Date 

28. The Debtors seek authority to retain, on an interim and final basis, Michael I. 

Goldberg, Esq. (“Mr. Goldberg”), Eyal Berger, Esq. (“Mr. Berger”) and the law firm of 

Akerman LLP (“Akerman”) as general bankruptcy counsel effective as of the Petition Date. The 

Debtors understand that Mr. Goldberg, Mr. Berger and Akerman have extensive experience 

representing Chapter 11 debtors in this district (and others across the country), and that they are 

well-qualified to serve as general bankruptcy counsel to the Debtors. The Debtors believe it is in 

the Debtors’ best interests, and those of its creditors, that Mr. Goldberg, Mr. Berger and 

Akerman be retained to serve as Debtors’ general bankruptcy counsel in its Chapter 11 case. 

29. To the best of the Debtors’ knowledge, except as disclosed in the Declaration of 

Eyal Berger, on behalf of Akerman LLP, as proposed counsel for the Debtors, neither Mr. Berger 

nor Akerman has any connection with the Debtors’ creditors or other parties in interest or their 

respective attorneys. 

30. I am aware that corporations may not appear in a Florida or Federal court within 

Florida pro se, and that only a licensed attorney may appear on their behalf. Because there is a 

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myriad of relief that must be sought from the Court immediately, the Debtors will suffer 

immediate and irreparable harm if they are unable to obtain the services of counsel before a final 

hearing on the Application for approval of counsel’s employment can be convened. For 

example, the Debtors require the Court’s approval of an agreement for the use of cash collateral. 

Without the use of cash, the Debtors will be unable to operate its business and maximize the 

value of its assets for the benefit of its estate. It is, therefore, my belief that only with the 

granting of interim approval of counsel’s employment will such immediate and irreparable injury 

be avoided. In that regard, counsel advises that this relief has been granted in other Chapter 11 

cases in this District. Accordingly, in the exercise of my business judgment, it is in the best 

interests of the Debtor, its estate and creditors to retain Akerman as its counsel. 

B. Debtors’ Emergency Motion For Entry of an Order Authorizing the Debtors to Use 

Cash Collateral and Provide Adequate Protection. 

31. The Debtors seek authorization to use the cash collateral of Lender pursuant to a 

13-week cash collateral budget prepared by the Debtors for the period from April 29, 2020 

through July 28, 2020. 

32. In connection with the Debtors’ proposed use of cash collateral and in order to 

provide the Monroe Lenders with adequate protection for the aggregate diminution of the cash 

collateral resulting from the Debtors’ use thereof, the Debtors have agreed, subject to approval of 

this Court, that the Monroe Lenders, shall have, nunc pro tunc as of the commencement of this 

Chapter 11 case, a replacement liens pursuant to section 361(2) of the bankruptcy code on and in 

all property of the Debtors acquired or generated after the Petition Date, but solely to the same 

extent and priority, and of the same kind and nature, as the property of the Debtors securing the 

prepetition obligations to the Lender under the Pre-Petition Loan Documents. In addition, the 

Debtors have consented to the payment of $140,000 in monthly adequate protection payments to 

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Monroe Lenders that equate to slightly less than the average $167,130 per month (when interest 

rates were higher) in contractual interest and other charges the Debtors were paying Monroe 

Lenders under the Pre-Petition Senior Secured Loan Agreements. 

33. The Debtors propose to use the cash collateral strictly in accordance with the 

terms of that certain Budget prepared by the Debtors. The Budget covers the period from April 

29, 2020 through July 28, 2020. The Debtors also requests that they be authorized: (i) to exceed 

any line item on the Budget by an amount equal to ten percent (10%) of each such line item; or 

(ii) to exceed any line item by more than ten percent (10%) so long as the total of all amounts in 

excess of all line items for the Budget do not exceed ten percent (10%) in the aggregate of the 

total Budget. 

34. Supplemental to the replacement liens provided to the Monroe Lenders, the 

Debtors will furnish as required by the Pre-Petition Senior Secured Loan Agreements and PrePetition Subordinated Secured Loan Agreements or other reports as the Monroe Lenders 

reasonably request. 

35. An immediate and critical need exists for the Debtors to be permitted access to 

cash collateral in order to continue to operate their businesses and preserve their ongoing, 

enterprise value. If the Debtors are not allowed to use cash collateral, their business operations 

will be substantially interrupted. This would result in a significant diminution in the value of the 

Debtors’ assets (including the cash collateral) to the detriment of the Debtors’ creditors and 

interest holders and other harm to the Debtors’ respective estates. The proposed use of cash 

collateral, therefore, is essential to sustain the Debtors during this Chapter 11 case and to prevent 

irreparable harm to the Debtors’ estate. The Budget provides adequate funds to pay anticipated 

administrative expenses during the pendency of this Chapter 11 case. 

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36. The proposed use of cash collateral is necessary, essential and appropriate for the 

continued operation of the Debtors’ business, and the preservation of the assets of the estate. 

Given the circumstances of this case and of the Debtors, the terms of the use of cash collateral 

are fair, reasonable and adequate, and in the best interest of the Debtors’ estate. The use of cash 

collateral provides the Debtors with working capital pursuant to the Budget, pending approval of 

the use of cash collateral on a permanent basis at the Final Hearing. The Debtors and I submit 

that granting of the relief sought is necessary and appropriate and in the best interests of the 

Debtors, its creditors, its shareholders and its customers. 

C. Debtor’s Emergency Motion for Entry of an Order: (I) Authorizing the Payment of 

Priority Pre-Petition Wages, Salaries, Earned Bonuses and Employee Benefits; and 

(II) Authorizing the Debtor to Continue the Maintenance of Employee Practices and 

Benefit Plans and Programs in the Ordinary Course of Business. 

37. The Debtor, Management, is requesting the entry of an order authorizing the 

Management to (a) pay various pre-petition wages, salaries, earned bonuses and employee 

benefits of the Debtor’s employees, and (b) continue the Debtor’s various pre-petition Employee 

practices, benefit plans and programs provided by the Debtor in the ordinary course of its 

business. 

38. As of the Petition Date, the Debtor employed approximately 290 full and part 

time employees, including management, service technicians, and administrative support staff 

(“Employees”). The Debtor, through Paymaster, a professional employer organization, pays its 

employees every other week with its next payroll set to be paid on May 12, 2020. The payroll 

for the employees to be distributed on May 12, 2020 is for the pay period ending May 5, 2020, 

which will include 9 days of pre-petition employee obligations, from April 20, 2020, through and 

including April 28, 2020. The total amount of gross wages due to be paid to Paymaster for the 

pre-petition payroll is approximately $366,244.10. 

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39. The Debtor also seeks authority to pay an earned performance bonus for 

approximately one-hundred and twenty (120) employees for the period of the first quarter. The 

total amount due and owing for prepetition compensation bonuses is $109,855.84 for the period 

of January 1, 2020 to March 29, 2020. The Debtor also pay its payroll taxes each payroll cycle 

through Paymaster and Debtor was current on the Petition Date. 

40. As part of the foregoing relief, the Debtor also seeks authorization to pay all 

federal and state withholding and payroll-related taxes relating to pre-petition periods including, 

but not limited to, all withholding taxes, Social Security taxes, and Medicare taxes, as well as all 

other withholdings such as life insurance and other employee deductions, if any. Store 

managers and bakery commissary managers are entitled to a quarterly bonus, based on 

performance, including sales, labor, cost of goods controls, that is part of their bonus 

compensation plan. The Earned Bonuses amount for each employee is based on the level of the 

managerial employee, from 5% to 15% of yearly base paid out quarterly. Typically, these 

employees’ bonuses for the first quarter are paid in April, and therefore Debtor requests authority 

to pay the earned bonuses no later than Friday, May 1, 2020. These employees have met the 

metrics for entitlement to the Earned Bonuses and their compensation is earned pursuant to their 

employment agreements with Debtor. 

41. The Debtor has established various employee benefit plans and policies for the 

benefit of its employees which include medical, and life insurance, vacation pay, personal time 

off and other similar benefits (collectively, the “Employee Benefits”). The Debtor seeks 

authority to honor these obligations the ordinary course of business. The Debtor provides its 

health and life insurance directly to employees through deductions in payroll paid to Paymaster 

on the Employees’ behalf. 

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42. All regular, full-time hourly Employees are eligible to accrue paid sick and 

personal days. The Debtor seeks authority to honor in the ordinary course of business all 

liabilities to its Employees that arose under its vacation and personal day policies prior to the 

Petition Date. The Debtor anticipates that its Employees may utilize any accrued vacation time 

or personal days in the ordinary course of business without resulting in any material cash flow 

requirements beyond the Debtor's normal payroll obligations. Any accrued vacation lapses at the 

end of each calendar year. 

43. The Debtor has sufficient funds designated to pay the payroll costs of its 

employees. The Debtor recently received a loan in the amount of approximately $6,400,000 

through the Paycheck Protection Program (“PPP”) pursuant to the title II of the Coronavirus Aid, 

Relief, and Economic Security Act (the “CARES Act.”) The PPP loan may be used for, among 

other things, (I) payroll costs; (II) costs related to the continuation of group health care benefits 

during periods of paid sick, medical, or family leave, and insurance premiums; and (III) salaries, 

commissions, or similar compensations. The Debtor intends to honor that obligation by using 

the proceeds for such purposes, and other purposes as allowed by the CARES Act. The Debtor 

contends that the proceeds of the PPP loan is not cash collateral. 

44. I believe that the relief requested in the Motion will enable the Debtor to maintain 

its current operations without interruption, thereby preserving the value of the business, and, at 

the same time, maintain employee morale. Without the relief requested, the Debtors’ ability to 

represent and protect its clients, preserve the Debtors’ going concern value and maximize the 

value of its assets for all creditors of its estate will be adversely affected if the Debtor is unable 

to retain its dedicated and loyal Employees. 

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V. DEBTORS’ OBJECTIVES IN THIS CASE 

45. The primary purposes of the filing of this Chapter 11 Case is to, among other 

things: (a) continue the Debtors’ operations while in Chapter 11 with as little disruption as 

possible; (b) allow the Debtors to continue serving its valued customers and operate its business 

pending a restructuring of its debt, and (c) establish procedures for the smooth and efficient 

administration of this case. Through the motions described above and other motions and 

applications the Debtors may file later, the Debtors hope to minimize any adverse effects that 

this Chapter 11 case might otherwise have on its business, employees, and its customers. For all 

of these reasons, I respectfully request that this Court grant the relief requested in each of the 

First Day Motions filed concurrently herewith. 

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