ROPES & GRAY LLP

Chris L. Dickerson (pro hac vice pending) 

Rahmon J. Brown (pro hac vice pending) 

191 North Wacker Drive, 32nd Floor 

Chicago, Illinois 60606 

Telephone: (312) 845-1200 

Facsimile: (312) 845-5500 

chris.dickerson@ropesgray.com 

rahmon.brown@ropesgray.com 

 

Proposed Counsel for the Debtors

FOLEY & LARDNER LLP

Holland N. O’Neil (TX 14864700) 

Mark C. Moore (TX 24074751) 

Zachary C. Zahn (TX 24137675) 

2021 McKinney Avenue, Suite 1600 

Dallas, TX 75201 

Telephone: (214) 999-3000 

Facsimile: (214) 999-4667 

honeil@foley.com 

mmoore@foley.com 

zzahn@foley.com 

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

In re:

TGI Friday’s Inc., et al.,

1

 

 Debtors. 

Chapter 11 

Case No. 24-80069-sgj11 

(Jointly Administered) 

DEBTORS’ EMERGENCY MOTION FOR ENTRY OF AN ORDER 

APPROVING (I) BIDDING PROCEDURES, THE SALE TIMELINE, AND THE FORM

AND MANNER OF NOTICE THEREOF; (II) THE DEBTORS’ ENTRY INTO

AND PERFORMANCE UNDER A STALKING HORSE APA; (III) ASSUMPTION

AND ASSIGNMENT PROCEDURES; AND (IV) GRANTING RELATED RELIEF

EMERGENCY RELIEF HAS BEEN REQUESTED. RELIEF IS REQUESTED NOT LATER THAN 11:00 

A.M. ON NOVEMBER 18, 2024.

IF YOU OBJECT TO THE RELIEF REQUESTED OR YOU BELIEVE THAT EMERGENCY

CONSIDERATION IS NOT WARRANTED, YOU MUST APPEAR AT THE HEARING IF ONE IS SET, 

OR FILE A WRITTEN RESPONSE PRIOR TO THE DATE THAT RELIEF IS REQUESTED IN THE

1

 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification 

number are: TGI Friday's Inc. (7117); TGI Friday's NY, LLC (2281); TGIF Holdings, LLC (7999); TGIF Midco, 

Inc. (7296); TGIF Parent, Inc. (1781); Burlington Towne Crossing, Inc. (7501); T G I Friday's of Greenbelt, Inc. 

(5617); T G I Friday's of Towson, Inc. (5450); T G I Friday's of Wisconsin, Inc. (7600); T.G.I. Friday's Marketing 

Advisory Council (6527); T.G.I. Friday's of Charles County, Inc. (3516); T.G.I. Friday's of Frederick County, 

Inc. (2547); T.G.I. Friday's of Hartford County, Inc. (0072); T.G.I. Friday's of Washington County, Inc. (6174); 

TGI Friday's of Annapolis, Inc. (8315); TGI Friday's of Howard County, Inc. (0119); TGI Friday's of Rockville, 

Inc. (2004); TGI Friday's of Texas LLC (3931); TGI Friday's of the Rockies, Inc. (7885); TGIF/DFW Manager, 

LLC (N/A); TGIF/DFW Partner, LLC (N/A); TGIF/JDC Restaurant Development, LLC (N/A); WEBCO 

Products Incorporated (3014). The Debtors’ service address is 19111 North Dallas Parkway, Suite 200, Dallas, 

TX 75287. 

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PRECEDING PARAGRAPH. OTHERWISE, THE COURT MAY TREAT THE PLEADING AS 

UNOPPOSED AND GRANT THE RELIEF REQUESTED.

TGI Friday’s Inc. and its affiliated debtors and debtors in possession (each a “Debtor” and, 

collectively, the “Debtors”) in the above-captioned chapter 11 cases, by and through their 

undersigned proposed counsel, hereby submit this motion (this “Motion”) for entry of an order 

granting the relief described below. In support hereof, the Debtors rely on the Declaration of Kyle 

Richter, Chief Restructuring Officer of the Debtors, in Support of the Debtors’ Chapter 11 

Petitions and First Day Motions [Docket No. 30] (the “First Day Declaration”),

2 and further 

represent as follows:

JURISDICTION AND VENUE

1. The United States Bankruptcy Court for the Northern District of Texas (the “Court”)

has jurisdiction to consider this Motion under 28 U.S.C. §§ 157 and 1334. 

2. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2). Venue of these 

chapter 11 cases and this Motion is proper in this district under 28 U.S.C. §§ 1408 and 1409. 

3. The statutory bases for the relief requested herein are sections 105, 363, 365, and 

1123 of title 11 of the United States Code, as amended (the “Bankruptcy Code”), Rules 2002, 

6004, and 6006 of the Federal Rules of Bankruptcy Procedures (the “Bankruptcy Rules”), and 

rule 2002-1 of the Local Bankruptcy Rules of the United States Bankruptcy Court for the Northern 

District of Texas (the “Local Rules”). 

RELIEF REQUESTED

4. By this Motion, the Debtors seek entry of an order approving, among other things,

certain dates critical to the Debtors’ proposed bidding and sale process, the Debtors’ proposed Sale 

2

 Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the 

First Day Declaration.

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Timeline, and assumption and assignment procedures (the “Bidding Procedures Order”) in 

substantially the form attached hereto as Exhibit A. The Debtors will seek approval of an order, 

substantially in a form or forms to be filed prior to the Sale Hearing (as defined below), (the “Sale 

Order”): (a) approving one or more sales of the Assets (as defined below) free and clear of liens, 

claims, interests, and encumbrances; (b) approving the assumption and assignment of the Debtors’ 

executory contracts and unexpired leases (if any) as may be requested by a Stalking Horse 

Purchaser or the Successful Bidder(s) and the proposed cure amounts with respect thereto; (c) 

approving the assumption of certain liabilities; and (d) granting related relief 

5. The relief sought in the proposed Bidding Procedures Order includes but is not 

limited to the following: 

(a) setting Friday, December 13, 2024 at 4:00 p.m. (prevailing Central Time) as the bid 

deadline with respect to the Debtors’ proposed sale of substantially all of their

assets (the “Bid Deadline”);

(b) setting Wednesday, December 18, 2024 as the date on which the Debtors will 

conduct an auction with respect to their proposed sale of substantially all of their 

assets (the “Auction”); 

(c) scheduling a hearing on approval of the proposed sale or sales (the “Sale”) of some 

or all of the Debtors’ assets (the “Assets”), on or before Friday, December 20, 2024 

(the “Sale Hearing”) or as soon thereafter as the Court may be available (together 

with (a), (b), and (c), the “Sale Timeline”), and approving the form and manner of 

notice thereof; 

(d) approving bidding procedures for the Sale (collectively, the “Bidding Procedures,” 

a copy of which is attached as Exhibit 1 to the Bidding Procedures Order), and the 

form and manner of notice thereof; 

(e) approving a form of asset purchase agreement (a “Stalking Horse APA”) to be filed 

prior to the hearing on this Motion; 

(f) approving the Bid Protections (as defined herein); 

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(g) approving procedures for the assumption and assignment of certain executory 

contracts and unexpired leases in connection with the Sale (each, an “Assumed 

Contract” and collectively, the “Assumed Contracts”), and approving the form and 

manner of notice thereof, attached as Exhibit 3 to the Bidding Procedures Order 

(the “Assumption Notice”); and

(h) granting related relief. 

PROVISION HIGHLIGHTS PURSUANT TO SECTION E OF THE COMPLEX CASE 

PROCEDURES

6. The below chart contains a summary of the material terms of the proposed Bidding 

Procedures Order, as required by Section E of the Complex Case Procedures:3

Relevant Complex Case 

Procedure

Summary References

Provisions Providing Bid 

Protections to “Stalking 

Horse” or Initial Bidder. 

Complex Case Procedures 

¶ 19(a)

Stalking Horse Declaration and Bid Protections: In the 

exercise of their business judgment and in their sole 

discretion, the Debtors may at any time prior to the 

Auction, without further order of the Bankruptcy Court, 

without any obligation to do so, and after consulting with 

the Consultation Parties, select one or more bidders to act 

as a stalking horse (each being a “Stalking Horse 

Purchaser” with the relevant bid being a “Stalking Horse 

Bid”) for some or all of the Debtors’ assets. The Debtors 

may, but are not required to, agree to provide (i) stalking 

horse expense reimbursement of up to $50,000 (the 

“Expense Reimbursement”) and (ii) a break-up fee in an 

amount not to exceed 3% of the cash component of the 

Stalking Horse Bid (if any) (the “Break-Up Fee” and 

together with the Expense Reimbursement, the “Bid 

Protections”); provided that the Bid Protections shall only 

be paid pursuant to the terms of an order approving a Sale 

Transaction. The Bid Protections shall only be payable if (i) 

a Stalking Horse Bidder, being ready, willing, and able to 

close its Transaction is not the Winning Bidder at the 

Auction, (ii) the Bankruptcy Court authorizes the Debtors 

to enter into an Alternative APA, and (iii) if such 

Alternative APA is for a Sale, such Sale actually closes.

To the extent a determination is made to provide Bid 

Protections, the Debtors will file notice of the same with the 

Bankruptcy Court, and such Bid Protections may be paid 

without further action or order of the Bankruptcy Court.

Notwithstanding anything herein to the contrary, the 

Stalking Horse Purchaser will be deemed to be a Qualifying 

Bidder (as defined below), and the Stalking Horse Bid 

(including as it may be modified at the Auction (if any) in 

Bidding Procedures

Order ¶¶ D, 10

Bidding Procedures

§§ 1, 11(g)

3 This summary is qualified in its entirety by reference to the provisions of the documents referenced. In the event of 

any inconsistencies between this summary and such documents, the terms of the applicable documents shall control.

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accordance with the terms therein and herein) will be 

deemed to be a Qualifying Bid (as defined below).

Initial Overbid and Bidding Increments: The Auction shall 

be conducted in an open cry format (and not by way of 

sealed bids). Bidding shall commence at the amount of the 

Baseline Bid(s), and the Auction Bidders may submit 

successive bids in increments of at least $100,000.00, 

provided that: (i) each such successive bid must be a 

Qualifying Bid; and (ii) the Debtors shall retain the right to 

modify the bid increment requirements at the Auction

The Bidding Procedures Order does not include no-shop or 

non-solicitation provisions, or any requirement that a 

Stalking Horse Bidder (if any) receive a “credit” equal to 

the Break-Up Fee.

Provisions Governing 

Qualification of Bidders. 

Complex Case Procedures 

¶ 19(b)

Qualified Bidders: Other than in the case of the Stalking 

Horse Purchaser and the Stalking Horse APA, which shall be 

considered a Qualifying Bidder and a Qualifying Bid, 

respectively, for all purposes under the Bidding Procedures, 

without any regard to any of the requirements or conditions 

set forth therein and without any other or further action by 

the Stalking Horse Purchaser, to be deemed a “Qualifying 

Bid,” a bid must be received from a Potential Bidder before 

the Bid Deadline and satisfy each of the following 

requirements (each, a “Bid Requirement”):

a. be in writing;

b. include a clean and duly executed asset purchase 

agreement (an “Alternative APA”) and a marked copy of 

the Alternative APA and an alternative Sale order showing 

any variations from the Stalking Horse APA or the Sale 

Order, as applicable;

c. fully disclose the identity of the Potential 

Bidder (and to the extent that the Potential Bidder is a 

newly formed acquisition entity or the like, the identity of 

the Potential Bidder’s parent company or sponsor), and 

details regarding the ownership and capital structure of the 

Potential Bidder, as well as the identity of any controlling 

persons, significant direct or indirect equity or debt 

investors, and/or guarantors of such entity, and any known 

connections the Potential Bidder has to the Debtors or their 

advisors, any official committee appointed in these chapter 

11 cases, or its advisors, the DIP Lender or its advisors, or 

any creditor or equity security interest holder of the 

Debtors and provide the contact information of the specific 

person(s) whom the Debtors or their advisors should 

contact in the event that the Debtors have any questions or 

wish to discuss the bid submitted by the Potential Bidder;

d. set forth the purchase price to be paid by such 

Potential Bidder, which purchase price shall include an 

aggregate amount of cash sufficient to pay all DIP 

Bidding Procedures

Order ¶¶ 8, 23

Bidding Procedures

§ 7

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Obligations (as defined in the DIP Order) in cash in full at 

closing;

e. identify separately any cash and non-cash 

components, which non-cash components shall be limited 

only to credit bids in accordance with section 363(k) of the 

Bankruptcy Code and assumed liabilities;

f. state the liabilities proposed to be paid or assumed 

by such Potential Bidder;

g. specify the Assets that are included in the bid and 

state that such Potential Bidder offers to (i) purchase the 

Assets, or a number or combination of the Assets, and (ii) 

assume liabilities, upon substantially the same terms as, or 

terms more favorable to the Debtors and their estate than, 

the terms set forth in the Stalking Horse APA;

h. state that such Potential Bidder’s offer is formal, 

binding and unconditional, and is irrevocable until two (2) 

business days after the closing of the Sale with respect to 

the applicable Assets;

i. to the extent that a bid is not accompanied by 

evidence of a Potential Bidder’s capacity to consummate 

the applicable Sale with cash on hand, the bid must include 

unconditional committed financing from a reputable 

financing institution, documented to the satisfaction of the 

Debtors in consultation with the Consultation Parties, 

including appropriate contact information for such 

financing sources, that demonstrates that the Potential 

Bidder has: (i) received sufficient debt and/or equity 

funding commitments to satisfy the Potential Bidder’s 

purchase price and other obligations under its bid; and 

(ii) adequate working capital financing or resources to 

finance going concern operations for the Assets. Such 

funding commitments or other financing must be 

unconditional and must not be subject to any internal 

approvals, syndication requirements, diligence, or credit 

committee approvals, and shall have covenants and 

conditions reasonably acceptable to the Debtors, in 

consultation with the Consultation Parties;

j. contain such financial and other information to 

allow the Debtors to make a reasonable determination, 

after consultation with the Consultation Parties, as to the 

Potential Bidder’s financial and other capabilities to close 

the transactions contemplated by the applicable Alternative 

APA, including, without limitation, such financial and 

other information supporting the Potential Bidder’s ability 

to comply with the requirements of adequate assurance of 

future performance under section 365(f)(2)(B) and, if 

applicable, section 365(b)(3) of the Bankruptcy Code, 

including the Potential Bidder’s financial wherewithal and 

willingness to perform under any contracts and leases that 

are assumed and assigned to the Potential Bidder, in a form 

that allows the Debtors to serve such information on any 

counterparties to such contracts or leases in connection 

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with the Sale within one (1) business day after the Debtors’ 

receipt of such information. To the extent that the Potential 

Bidder (other than the Stalking Horse Purchaser) is a newly 

formed acquisition entity or the like, the financial and other 

information supporting the Potential Bidder’s financial 

wherewithal shall include financial and other information 

supporting the financial wherewithal of the Potential 

Bidder’s parent company or sponsor;

k. identify with particularity each and every executory 

contract and unexpired lease, the assumption and 

assignment of which is a condition to close the transactions 

contemplated by the Alternative APA;

l. include closing conditions that are no less favorable 

to the Debtors than the closing conditions contained in the 

Stalking Horse APA (and specify such closing conditions 

in the applicable Alternative APA);

m. include a statement that the bid does not request or 

entitle such Potential Bidder to any break-up fee, 

termination fee, expense reimbursement, or similar type of 

payment or reimbursement;

n. not contain any contingencies of any kind, 

including, without limitation, contingencies related to 

financing, internal approval, or due diligence, other than 

Bankruptcy Court approval of the Sale;

o. contain a written acknowledgement and 

representation that the Potential Bidder (i) has had an 

opportunity to conduct any and all due diligence regarding 

the Assets, (ii) has relied solely upon its own independent 

review, investigation or inspection of any documents and 

other information in making its bid, and (iii) did not rely 

upon any written or oral statements, representations, 

promises, warranties or guaranties whatsoever, whether 

express, implied, by operation of law or otherwise, 

regarding the Assets, or the completeness of any 

documents or other information provided in connection 

with the Bidding Procedures and the Sale;

p. set forth any regulatory and third-party approvals 

required for the Potential Bidder to close the transactions 

contemplated by the Alternative APA, and the time period 

within which the Potential Bidder expects to receive such 

regulatory and third-party approvals (and in the case that 

receipt of any such regulatory or third-party approval is 

expected to take more than five (5) days following 

execution and delivery of such Potential Bidder’s 

Alternative APA, those actions the bidder will take to 

ensure receipt of such approval(s) as promptly as possible); 

provided that a Potential Bidder agrees that its legal 

counsel will coordinate in good faith with the Debtors’ 

legal counsel to discuss and explain the Potential Bidder’s 

regulatory analysis, strategy, and timeline for securing all 

such approvals as soon as reasonably practicable, and in no 

event later than the time period contemplated in the 

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Alternative APA; provided, further that the bid contains a 

covenant to cooperate with the Debtors to provide pertinent 

factual information regarding the bidder’s operations 

reasonably required to analyze issues arising with respect 

to any applicable antitrust laws and other applicable 

regulatory requirements;

q. provide for a binding commitment of the Potential 

Bidder to serve as a backup bidder (the “Back-Up Bidder”) 

if the Potential Bidder’s bid is the next highest or otherwise 

best bid (the “Back-Up Bid”) after the Winning Bid, with 

respect to the applicable Assets;

r. include written evidence of authorization and 

approval from the Potential Bidder’s board of directors (or 

comparable governing body) with respect to the 

submission, execution, and delivery of the Alternative 

APA;

s. provide a good faith cash deposit (the 

“Deposit”) in an amount equal to ten percent (10%) of the 

aggregate purchase price provided for in the Alternative 

APA (or such additional amount as may be determined by 

the Debtors in their reasonable discretion); 

t. state or otherwise estimate the types of, and costs or 

charges for, transition services, if any, the Potential Bidder 

would require of or provide to the Debtors, including an 

estimate of the time any such transition services would be 

required of or provided to the Debtor; and

u. provide that in the event of the Potential Bidder’s 

breach of, or failure to perform under, the Alternative APA, 

the Debtors and their estates shall be entitled to pursue all 

available legal and equitable remedies, including, without 

limitation, retention of the Deposit as part of the damages 

resulting to the Debtors and their estates for such breach or 

failure to perform.

A bid from a Potential Bidder satisfying all of the above 

requirements, as determined by the Debtors, in consultation 

with the Consultation Parties, shall constitute a Qualifying 

Bid. The Debtors reserve the right, in their business 

judgment and in consultation with the Consultation Parties, 

to waive any of the Bid Requirements or work with any 

Potential Bidder in advance of the Auction to cure any 

deficiencies in a bid that is not initially deemed a Qualifying 

Bid.

Each Potential Bidder submitting a bid shall be deemed to: 

(a) acknowledge and represent that it is bound by all of the 

terms and conditions of the Bidding Procedures; and (b) have 

waived the right to pursue a substantial contribution claim 

under section 503 of the Bankruptcy Code related in any way 

to the submission of its bid, the Bidding Procedures, the 

Auction, or the Sale.

Provisions Governing 

Qualified Bids. 

Bid Deadline: A Potential Bidder, other than one designated 

as the Stalking Horse Purchaser, that desires to make a bid 

Bidding Procedures

§ 8

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Complex Case Procedures 

¶ 19(c)

shall deliver a written and electronic copy of its bid in both 

PDF and MS-WORD format to the Bidding Procedures 

Notice Parties (as defined herein) and the Consultation 

Parties so as to be received on or before Friday, December 

13, 2024 at 4:00 p.m. (CT) (the “Bid Deadline”); provided

that the Debtors may extend the Bid Deadline without 

further order of the Court, after consultation with the 

Consultation Parties and upon consent of the DIP Lender. 

To the extent that the Bid Deadline is extended for all 

parties, the Debtors shall file a notice on the docket of their 

chapter 11 cases indicating the same. Any party that does 

not submit a bid by the Bid Deadline will not be allowed 

to (a) submit any bids after the Bid Deadline or (b) 

participate in the Auction.

Modification of Bidding 

and Auction Procedures. 

Complex Case Procedures 

¶ 19(d)

Reservation of rights: Notwithstanding any of the foregoing, 

the Debtors, in consultation with the Consultation Parties, 

may (a) upon consent of the DIP Lender, extend the 

deadlines set forth in the Bidding Procedures Order or the 

Bidding Procedures, and (b) adopt, implement, and waive 

such other, additional or existing procedures or requirements 

that, in their business judgment, will encourage an orderly 

Auction and bid process, including, but not limited to, the 

imposition of a requirement that all Qualifying Bidders 

submit sealed Qualifying Bids during the Auction, all 

without further notice except to the Auction Participants, as 

appropriate; provided, however, that the prior written 

consent of the DIP Lender is required to modify the 

minimum amount of consideration required for an 

Alternative APA to be the Baseline Bid pursuant to Section 

9.

The Debtors, in consultation with the Consultation Parties, 

may (a) determine which Qualifying Bid(s), if any, is the 

Winning Bid(s) with respect to any subset of Assets, and 

(b) reject at any time before entry of the Sale Order 

approving the Winning Bid(s), any bid (other than the 

Stalking Horse Bid) that, in the discretion of the Debtors, in 

consultation with the Consultation Parties, is (i) inadequate 

or insufficient, (ii) not in conformity with the requirements 

of the Bankruptcy Code or the Bidding Procedures, or 

(iii) contrary to the best interests of the Debtors’ estates and 

their creditors. At or before the conclusion of the Auction, 

the Debtors, in consultation with the Consultation Parties, 

may impose such other terms and conditions upon 

Qualifying Bidders as the Debtors determine to be in the 

best interests of the Debtors’ estates in these cases.

Bidding Procedures

Order ¶¶ 4, 26

Bidding Procedures

§ 18

Closing with Alternative 

Back-Up Bidders.

Complex Case Procedures 

¶ 19(e)

Back-Up Bidder: Notwithstanding any of the foregoing, in 

the event that a Sale to the applicable Winning Bidder is 

terminated or fails to close by the outside date identified in 

the Winning Bid (or such date as may be extended by the 

Debtors in consultation with the Consultation Parties and 

upon consent of the DIP Lender), the applicable Back-Up 

Bid will be deemed to be the Winning Bid with respect to 

the Applicable Assets, the applicable Back-Up Bidder will 

be deemed to be the applicable Winning Bidder, and the 

Debtors shall be authorized to close the Sale of the 

Bidding Procedures

Order ¶ 8

Bidding Procedures

§ 13

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applicable Assets to such Back-Up Bidder on the terms of 

its Back-Up Bid without the need for further order of the 

Court and without the need for further notice to any 

interested parties.

Provisions Governing 

the Auction.

Complex Case Procedures 

¶ 19(f)

Auction: If the Debtors timely receive one or more 

Qualifying Bids other than the Stalking Horse Bid, then the 

Debtors shall conduct an auction (the “Auction”). 

Following the Auction, the Debtors will determine, in 

consultation with the Consultation Parties, which 

Qualifying Bid or combination of Qualifying Bids is the 

highest or otherwise best bid for the Assets, which will be 

determined by considering, among other things, the 

following non-binding factors: (a) the number, type and 

nature of any changes to the Stalking Horse APA requested 

by each Qualifying Bidder; (b) the extent to which such 

modifications are likely to delay closing of the Sale and the 

cost to the Debtors and their estates of such modifications 

or delay; (c) the total consideration to be received by the 

Debtors and their estates (provided, for the avoidance of 

doubt, that a credit bid shall not be considered inferior to a 

comparable cash or other non-cash bid because it is a credit 

bid); (d) the transaction structure and execution risk, 

including conditions to, timing of and certainty of closing, 

termination provisions, availability of financing and 

financial wherewithal to meet all commitments, and 

required governmental or other approval; (e) the net benefit 

to the Debtors’ estates; and (f) any other factors the Debtors 

may reasonably deem relevant in their business judgment.

Closing of Auction and Selection of Successful Bid: Upon 

the conclusion of the Auction, the Debtors shall determine, 

in consultation with the Consultation Parties, and subject to 

Court approval, the offer or offers for the Assets (or any 

subset thereof, if applicable) that is or are the highest or 

otherwise best from among the Qualifying Bids submitted 

at the Auction (the “Winning Bid”). In making this 

decision, the Debtors shall consider, in consultation with 

the Consultation Parties, the amount of the purchase price, 

the assumption of liabilities, the likelihood of the bidder’s 

ability to close the proposed transaction and the timing 

thereof, the number, type and nature of any changes to the 

Stalking Horse APA or the applicable Alternative APA(s), 

as applicable, requested by each bidder, and the net benefit 

to the Debtors’ estates. The bidder(s) submitting such 

Winning Bid at the Auction shall become the “Winning 

Bidder,” and shall have such rights and responsibilities of 

the purchaser as set forth in the Stalking Horse APA or any 

Alternative APA, as applicable. The Debtors shall 

designate a Back-Up Bid (and the corresponding Back-Up 

Bidder) to purchase the Assets (or any subset thereof, if 

applicable) in the event that the Winning Bidder does not 

close the applicable Sale.

No Collusion: Prior to the start of the Auction, each of the 

Auction Bidders shall confirm that they have not engaged 

Bidding Procedures

Order ¶ 8

Bidding Procedures

§ 11

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in any collusion with respect to the Bidding Procedures, the 

Auction or the Sale.

BACKGROUND

1. On November 2, 2024 (the “Petition Date”), each of the Debtors filed a voluntary 

petition for relief under chapter 11 of the Bankruptcy Code. The Debtors remain in possession of 

their property and continue to operate and manage their businesses as debtors in possession 

pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. No request has been made for the 

appointment of a trustee or examiner, and no official committee has been appointed in the Chapter 

11 Cases.

2. Founded in 1965 in New York City, New York, the Debtors are the owners and 

franchisors of original casual dining bar and grill, TGI Fridays, offering classic American food 

and beverages, with 39 restaurant locations being owned and operated by the Debtors. The 

Debtors are known for bringing people together to socialize and celebrate the liberating spirit of 

“Friday.” The Debtors boast a considerable international presence, and the vast majority of its 

restaurants are franchises. 

7. On November 4, 2024 the Court entered the Interim Order (I) Authorizing the 

Debtors to Obtain Postpetition Financing, (II) Granting Liens and Providing Claims with 

Superpriority Administrative Expense Status, (III) Authorizing the Use of Cash Collateral, (IV) 

Modifying the Automatic Stay, and (V) Scheduling a Final Hearing [Docket No. 61] (the “Interim 

DIP Order”). Pursuant to the Interim DIP order, the Debtors Texas Partners Bank, a Texas state 

bank doing business as The Bank of San Antonio, as lender (the “DIP Lender”) agreed to certain 

case milestones (“DIP Financing Milestones”) to preserve and maximize the value of the Debtors’ 

assets and operations. 

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THE PROPOSED BIDDING PROCEDURES AND SALE

A. The Events Leading to the Sale Process

8. Similar to its peers, the Company has struggled with rising costs in recent years, 

particularly as consumers have shifted towards limited-service options. In addition, decreased 

sales have led to tightened liquidity. For example, the Company’s U.S. sales have declined by 

15% over the last year, which was due to unit closures and weaker average unit volumes. 

9. On March 2, 2017, the Company and Citibank, N.A., as trustee (the “Trustee”) 

entered into a base indenture (the “Indenture”) and management agreement (the “Management 

Agreement”). The transaction was a whole business securitization, where the Company issued 

two series of notes. The notes were collateralized by the Company’s existing and future franchise 

agreements, existing and future company-operated restaurant royalties, license agreements, 

existing and future intellectual property, and related revenues. Under the Management Agreement, 

TGIF Fundings, LLC, TGI Fridays Franchisor, LLC, and TGIF SPV Guarantor, LLC (collectively, 

the “Securitization Entities”) engaged TGI Friday’s, Inc. as manager (the “Manager”) to enforce 

their rights and powers and perform their duties. Pursuant to the Indenture, the Manager was 

required to furnish a report by independent auditors or the back-up manager summarizing the 

findings of certain agreed upon procedures within a set time period (the “Manager Report”). 

10. On September 3, 2024, the Trustee declared a manager termination event, which 

terminated TGI Friday’s Inc. as Manager. The termination was purportedly due to several reasons, 

including, among other things, the Manager’s failure to furnish the Manager Report. TGI Friday’s 

Inc. continues to provide management services under the terms of a TSA (defined below). Until 

a successor is named, FTI Consulting, Inc. (“FTI”) has served and will continue to serve as the 

back-up Manager. FTI’s responsibilities included exercising inspection and audit rights against 

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the securitization entities, restructuring and re-negotiating transaction documents those entities 

entered into, implementing personnel decisions, and liquidating collateral if reasonably necessary.

11. As a result of the termination of TGI Friday’s Inc. as Manager, the Company lost a 

significant portion of its revenue stream as the Company would no longer receive the benefit of 

the restaurant royalty payments. 

12. Without a viable path forward on an out-of-court basis, and facing an increasing 

liquidity strain and imminent debt maturities, the Debtors began considering in-court options and 

eventually filed chapter 11 petitions on the Petition Date. The Debtors determined that the most 

actionable path forward under the circumstances was to conduct a sale of all or a portion of their 

assets pursuant to the procedures set forth herein. In order to receive DIP Financing, the Debtors 

agreed, as part of the DIP Financing Milestones, to (i) hire an investment banker to assist with a 

robust marketing process for the Debtors assets and (ii) execute an asset purchase agreement with 

a stalking horse bidder. 

13. In November 2024, the Debtors engaged Hilco Corporate Finance, LLC (“Hilco”) 

to serve as their investment banker, and the Debtors began actively evaluating potential strategies 

to address their balance sheet, litigation, and liquidity needs. 

14. The Debtors determined that the most actionable path forward under the 

circumstances was to conduct a sale of all or a portion of their assets (the “Assets”) pursuant to the 

procedures herein. The Debtors intend to identify a Stalking Horse Purchaser and enter into a 

Stalking Horse APA with the Stalking Horse Purchaser prior to the Auction. The Stalking Horse 

APA will contemplate that the Assets will be sold free and clear (subject to certain Permitted 

Encumbrances and Assumed Liabilities (each as defined in the Stalking Horse APA)) following a 

robust marketing, auction, and sale process to determine whether or not the bid submitted by the 

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Stalking Horse Purchaser (if any) (the “Stalking Horse Bid”) is the highest or otherwise best bid 

for the Debtors’ assets. 

B. The Proposed Sale Timeline 

15. The Debtors request that the Court approve the following dates in connection with 

the Bidding Procedures and the Sale Timeline:

4

 

Event Proposed Deadline

Entry of the Bidding Procedures Order On or before Monday, November 18, 2024 

Deadline to serve Bid Packages Within three (3) business days after entry of the 

Bidding Procedures Order

Deadline to file initial list of potential Assumed 

Contracts and Cure Notice

Within ten (10) business days following entry of the 

Bidding Procedures Order

Deadline for Cure Objections and deadline for 

counterparties to request adequate assurance 

documentation from the Debtors

Within fourteen (14) days following service of the 

Cure Notice

Deadline to file Notice of Proposed Sale Order Friday, December 6, 2024 at 4:00 p.m. (prevailing 

Central Time)

Qualifying Bid Deadline Friday, December 13, 2024 at 4:00 p.m. (prevailing 

Central Time)

Auction Date (if necessary) Wednesday, December 18, 2024

Deadline to file Notice of Winning Bidder and for 

Debtors to provide adequate assurance documentation 

relating to Winning Bidder and the Back-Up Bidder to 

counterparties who have requested the same

One (1) day following the closing of the Auction, or as 

soon as reasonably practicable

Deadline to return deposits to non-Qualified Bidders Within (5) business days following the Qualified Bid 

Deadline

Deadline to Object to the Sale Thursday, December 19, 2024 at 4:00 p.m. (prevailing 

Central time)

Deadline to object to adequate assurance of future 

performance by the Stalking Horse Purchaser or other 

Winning Bidder 

Thursday, December 19, 2024 at 4:00 p.m. (prevailing 

Central time)

Deadline to file schedule of Assumed Contracts Thursday, December 19, 2024 at 4:00 p.m. (prevailing 

Central time)

Hearing to Consider the Sale Order On or before Friday, December 20, 2024

(subject to the Court’s availability)

Entry of the Sale Order No later than Thursday, January 2, 2025

Sale(s) Closing Date Five (5) days after entry of the Sale Order

Deadline to return deposits to non-Winning Bidders or 

Back-Up Bidders

Within five (5) business days following the closing of 

the Sale(s)

16. The Debtors believe that the Sale Timeline is reasonable in time and scope and

affords parties and creditors with sufficient time to gather information necessary to formulate a 

4

 The following dates are consistent with the milestones set forth in the Interim DIP Order [Docket No. 61], or have 

otherwise been adjusted upon the consent of the DIP Lender. 

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competitive bid that should maximize the value of the Assets for the benefit of the Debtors’ estates 

and their stakeholders. Accordingly, the Debtors believe that the Sale Timeline is in the best 

interests of the Debtors’ estates, will establish whether and to what extent a market exists for the 

Assets, will provide interested parties with sufficient opportunity to participate in any sale 

transaction(s), and ultimately, will drive a higher and better value for the Assets under the 

circumstances.

17. A party’s failure to timely file or make an objection in accordance with the Bidding 

Procedures Order shall forever bar such a party from asserting any objection to the 

Debtors’ consummation of the Sale and the assumption and assignment of certain executory 

contracts and unexpired leases, and such failure shall be deemed to constitute consent by such 

contract counterparty to (a) the assumption and assignment of such executory contracts and 

unexpired leases and (b) consummation of the Sale.

C. The Proposed Sale Process

18. Among other things, the proposed Bidding Procedures and the Sale Timeline will 

provide a transparent and comprehensive avenue through which the Debtors will solicit competing 

bids for the Assets. Indeed, this work has already begun. The Stalking Horse APA will serve as 

the baseline for all prospective bidders to negotiate from, and will be subject to higher or otherwise 

better bids for the Assets pursuant to the Bidding Procedures.

19. Consistent with the DIP Financing Milestones, the Debtors have filed this Motion 

seeking authority to proceed with a bidding and auction process to consummate a sale (or series 

of sales) that the Debtors expect will generate higher or better value for their Assets. To facilitate 

the Sale, the Debtors, in consultation with Hilco and their other professional advisors, are seeking 

approval of the Bidding Procedures to preserve flexibility in the Sale Process, generate substantial

interest in the Assets, and receive the highest or otherwise best value for the Assets. 

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20. The Debtors believe the Bidding Procedures create an appropriate timeline for the 

Sale Process, consistent with the DIP Financing Milestones. The Bidding Procedures do not 

contemplate exclusivity for the Stalking Horse Purchaser. Rather, approval of the Debtors’ entry 

into a Stalking Horse APA benefits the Debtors by serving as a baseline for the Sale Process to 

ensure that the Debtors receive the highest or otherwise best offer for the Assets. Accordingly, the

Debtors do not believe the Bidding Procedures will chill or otherwise hinder additional bids. 

D. The Stalking Horse APA

21. Prior to the hearing on this Motion, the Debtors intend to file an asset purchase 

agreement for use and modification by potential bidders(the “Stalking Horse APA”). The Stalking 

Horse APA will serve as a baseline for negotiations with all prospective bidders. The Debtors 

seek approval of the Stalking Horse APA, subject to such modifications as may be submitted by 

potential bidders and accepted by the Debtors, after consultation with the Consultation Parties in 

connection with the Proposed Sale and in the exercise of the Debtors’ business judgment. Given 

the exigencies of the Debtors’ financial condition, the timely sale of the Assets, in accordance with 

the DIP Financing Milestones, is a prudent way to ensure that the Debtors obtain the highest or 

otherwise best value for their Assets. The Debtors believe that consummating the transaction 

contemplated by the Stalking Horse APA, or a transaction contemplated by a bid that is higher or 

otherwise better, will maximize value for the Debtors’ estates, and afford the Debtors an 

opportunity to continue to service their customers and maintain business relationships with their 

partners and vendors. The Stalking Horse APA will include various customary representations, 

warranties, and covenants by and from the Debtors and the Stalking Horse Purchaser, and certain 

conditions to closing and rights of termination related to the Sale and these chapter 11 cases. The 

transactions contemplated by the Stalking Horse APA will be subject to approval by the Court and 

entry of the Sale Order.

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E. The Proposed Bidding Procedures 

22. The Debtors have developed and proposed the Bidding Procedures to facilitate a fair 

and efficient process for soliciting, receiving, and evaluating bids. Consistent with the Debtors’ 

goal of implementing a cost-effective Sale, the proposed Bidding Procedures are designed to 

promote a competitive and value-maximizing sale process and create a path toward entry of the

Sale Order that will secure the highest or otherwise best value for the Assets. In addition, the 

Debtors believe the Bidding Procedures provide potential bidders with ample notice and time to 

conduct thorough due diligence and submit binding bids in advance of the Sale Hearing. As such, 

the Debtors believe the proposed Bidding Procedures are fair and in the best interests of their 

estates and stakeholders and should be approved. 

23. The Bidding Procedures describe, among other things, (a) the Assets available for 

sale, (b) the manner in which bids become “qualified,” (c) the coordination of diligence efforts 

among the bidders and the Debtors, (d) the receipt and negotiation of bids received, (e) the conduct 

of any Auction, and (f) the selection and approval of the Winning Bidder and the selection of the 

Back-Up Bidder (as defined below). The Bidding Procedures reflect the Debtors’ objective of 

conducting the Sale Process in an orderly, fair, and open manner, while ensuring that the highest 

or otherwise best bid is generated for the Assets. The Bidding Procedures are attached as Exhibit 1 

to the Bidding Procedures Order. The Bidding Procedures shall apply to Interested Bidders, 

Potential Bidders, Qualifying Bidders, the submission, receipt, analysis of all bids relating to the 

Sale, and the conduct of the Sale and the Auction.

24. The Debtors respectfully submit that the timeline set forth in the Bidding 

Procedures, and the Bidding Procedures themselves, are reasonable and necessary under the 

circumstances of these chapter 11 cases. Such timeline provides parties in interest sufficient time 

to diligence the opportunity presented here, and to formulate bids for the Assets. The Bidding 

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Procedures were designed with the objective of generating interest in, and driving higher and better 

value for, the Assets, while allowing the Debtors to close the Sale in a timely and efficient manner. 

25. The Debtors and their professional advisors respectfully submit the Bidding 

Procedures and the other relief requested herein will facilitate the sale of the Assets for the highest 

or otherwise best value, help preserve jobs for the Debtors’ employees, afford the Debtors with an

opportunity to continue their relationships with their customers and vendors, and otherwise 

maximize recoveries for all stakeholders. Finally, the robust auction and sale process, 

contemplated by the Bidding Procedures will also serve as a market test to ensure that the Sale is 

a value-maximizing transaction for the Debtors and their stakeholders. 

26. The Bidding Procedures contemplate that the Debtors may declare a Stalking Horse 

Bidder at any time prior to the Auction. The Stalking Horse Purchaser, if any, will be deemed to 

be a Qualifying Bidder (as defined in the Bidding Procedures) and the Stalking Horse APA is 

deemed to be a Qualifying Bid (as defined in the Bidding Procedures). 

27. Nothing in the Bidding Procedures will impose any obligation on the board of 

directors, board of managers, or similar governing body of a Debtor or its Debtor or Non-Debtor 

affiliates to take or refrain from taking any action if they reasonably determine, in good faith and 

after consulting their outside counsel, that such action or inaction would be inconsistent with 

applicable law or their fiduciary duties under applicable law. Therefore, the Bidding Procedures 

do not hinder the Debtors’ ability to consider all Qualified Bid proposals and preserve the 

Debtors’ right to modify the Bidding Procedures as necessary or appropriate to maximize value 

for their estates. 

II. Notice Procedures for the Sale, Bidding Procedures, Auction, and Sale Hearing 

28. The Debtors also request approval of the Sale notice (the “Sale Notice”), 

substantially in the form attached to the Bidding Procedures Order as Exhibit 2. 

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29. Within three (3) business days after entry of the Bidding Procedures Order, the 

Debtors will serve a package (the “Bid Package”) containing the Bidding Procedures Order, the 

Bidding Procedures, the Stalking Horse APA (if any), and the notice of Bid Deadline, Auction, 

and Sale Hearing, substantially in the form attached to the Bidding Procedures Order as Exhibit 2

by electronic or by first class U.S. mail, postage prepaid, upon the following: (i) the Office of the 

United States Trustee for the Northern District of Texas; (ii) counsel to any official committee 

appointed in the Bankruptcy Case; (iii) all entities known to have expressed an interest in a 

transaction with respect to the Assets during the past twelve (12) months; (iv) all counterparties to 

any contracts or leases, whether executory or not; (v) all parties known by the Debtors to assert a 

lien, encumbrance, or any other interest in or on any of the Assets, including, without limitation, 

preferential purchase rights or rights of first refusal on, any of the Debtors’ Assets; (vi) all affected 

federal, state and local governmental regulatory and taxing authorities, including the Internal 

Revenue Service and State Attorney General in each State in which the Debtors conduct business; 

(vii) all known holders of claims against and equity interests in the Debtors, (viii) all of the 

Debtors’ insurers; (ix) counsel to the DIP Lender; (x) Midland Loan Services, a Division of PNC 

Bank, National Association as servicer and control party (the “Control Party”); (xi) all parties that 

have filed and not withdrawn requests for notices pursuant to Bankruptcy Rule 2002; and (xii) all 

other parties that have filed a notice of appearance and demand for service of papers in these 

chapter 11 cases as of the service date; and (ii) provide on a confidential basis a copy of the Sale 

Notice, along with other marketing materials deemed appropriate by the Debtors and their advisors 

to any parties who express, to the Debtors or their advisors, an interest in acquiring some or all of 

the Assets (the parties in (i) and (ii) collectively, the “Sale Notice Parties”). As part of the Sale 

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Process, the Debtors (directly or through their advisors) will keep a log of the Sale Notice Parties 

that they provide materials to pursuant to clause (ii) in the prior sentence. 

30. The Debtors will also cause the Sale Notice to be published in the national edition 

of The Wall Street Journal, with any modifications necessary for ease of publication, and post the 

Sale Notice and the Bidding Procedures Order on Debtors’ case website at 

https://cases.stretto.com/TGIFridays (the “Case Website”) maintained by Debtors’ claims and 

noticing agent, Stretto, Inc. (“Stretto”). 

31. The Debtors submit that the foregoing Sale Notice is reasonably calculated to 

provide timely and adequate notice of the Sale, the Bidding Procedures, the Auction, and the Sale

Hearing to the Debtor’s creditors and other parties in interest, as well as to those who are likely to 

have an interest in bidding on the Assets. 

F. Assumption and Assignment Notice 

32. The Debtors are also seeking approval of certain procedures to facilitate the fair and 

orderly assumption and assignment of executory contracts and unexpired leases in connection with 

the Sale transaction (the “Assumption Procedures”). Because the Bidding Procedures Order sets 

forth the Assumption Procedures in detail, they are not restated herein. Generally, however, the 

Assumption Procedures (a) outline the process by which the Debtors may serve notice to certain 

executory contract and unexpired lease counterparties regarding the proposed assumption and 

assignment and related cure amounts, if any, informing such parties of their right and the 

procedures to object thereto, and (b) establish objection and other relevant deadlines and the 

manner for resolving disputes relating to the assumption and assignment of the Contracts to the 

extent necessary.

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BASIS FOR RELIEF 

I. The Court Should Approve the Sale Timeline Because it is in the Best Interests of the 

Debtors’ Estates and is Reasonable in Time and Scope

33. The Debtors seek entry of the Bidding Procedures Order for purposes of setting the 

Sale Timeline and providing parties with as much notice and clarity as possible. The proposed 

Sale Timeline contemplates an efficient Sale Process and the Debtors want to ensure that all 

interested parties, and any potential bidders, understand the timeline to participate in the Sale 

Process and submit Qualifying Bids.

34. The Debtors further submit that the Sale Timeline is appropriate. The Debtors and 

their advisors have evaluated a number of qualitative and quantitative factors in designing a 

process that they believe will maximize the value of the Assets and result in a successful 

restructuring of their estates. The Debtors and their advisors have negotiated a timeline that 

balances the need to provide adequate notice to parties in interest, including to sufficiently market 

the Assets in the context of a postpetition Sale Process, with the need to quickly and efficiently 

consummate one or more Sale transactions. The Sale Timeline is a product of good-faith, 

arm’s-length negotiations and reflects the best option for maximizing the value of the Assets under 

the circumstances of these chapter 11 cases. 

35. The Debtors believe that the Sale Timeline is reasonable in time and scope and

affords parties with sufficient time to gather information necessary to formulate a competitive, 

value-maximizing bid. Accordingly, the Debtors believe that the Sale Timeline is in the best 

interests of the Debtors’ estates, will assist in establishing whether and to what extent a market 

exists for the Assets, and provides interested parties with sufficient opportunity to participate in 

any sale transaction(s), and ultimately, will result in the highest or otherwise best bid for the 

underlying Assets under the circumstances.

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36. Access to the DIP Facility is critical to the Debtors’ ability to operate their 

businesses through the completion of the Sale Process and during the pendency of these chapter 11 

cases. Failure to adhere to the DIP Financing Milestones, which are reflected in the Sale Timeline, 

could jeopardize the Debtors’ available borrowing under the DIP Facility and, in turn, compromise 

the Debtors’ ability to effectuate the proposed Sale transaction. Given the anticipated cost of 

administering these chapter 11 cases, the Debtors cannot afford any delay in monetizing the Assets. 

With this in mind, the proposed Sale Timeline provides the Debtors the ability to maximize value 

while minimizing administrative expenses.

37. In view of the foregoing, the Debtors request that the Court enter the Bidding 

Procedures Order, substantially in the form attached hereto as Exhibit A, approving the Sale 

Timeline. 

II. The Court Should Approve the Bidding Procedures and the Debtors’ Entry into and 

Performance Under a Stalking Horse APA Because it is in the Best Interest of the 

Debtors’ Estates

38. The key objective in any sale of property of a debtor’s estate is to maximize the 

value received by the estate. See Cadle Co. v. Moore (In re Moore), 608 F.3d 253, 263 (5th Cir. 

2010) (debtor in possession “has the duty to maximize the value of the estate”); Commodity 

Futures Trading Comm’n v. Weintraub, 471 U.S. 343, 352 (1985) (same); In re Bigler, LP, 443 

B.R. 101, 115 (Bankr. S.D. Tex. 2010) (noting the primary goals for a sale of estate property are 

“maximizing value for the estate and preserving the integrity of the judicial process”). Procedures 

used to enhance competitive bidding support this objective and, therefore, are appropriate in the 

context of bankruptcy sales. See In re O’Brien Envtl. Energy, Inc., 181 F.3d 527, 537 (3d Cir. 

1999); see also Integrated Res. Inc., 147 B.R. at 659 (stating that bidding procedures “encourage 

bidding and . . . maximize the value of the debtor’s assets”). 

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39. The Debtors and their professional advisors, including Hilco, have designed the 

Bidding Procedures to promote a competitive and fair bidding process to maximize value for the 

Debtors’ estates and their stakeholders. The Bidding Procedures will allow the Debtors to conduct 

the Sale Process in an orderly, fair, and open fashion, which will encourage participation by 

financially capable bidders, thereby increasing the likelihood that the Debtors will receive the 

highest or best possible consideration for the Assets. In addition, by setting a floor for the Sale, 

the Debtors believe entry into a Stalking Horse APA with a Stalking Horse Purchaser further 

increases the likelihood of the Debtors receiving the highest or best consideration for the Assets. 

40. Furthermore, the Bidding Procedures and the Stalking Horse APA (if any) provide 

an appropriate framework for the Debtors and their fiduciaries and professional advisors to review, 

analyze, and compare any bids received to determine which bids are in the best interests of the 

Debtors’ estates and their creditors. The Debtors and Hilco, the Debtors’ investment banker in 

connection with the Sale Process, believe that the Bidding Procedures and Stalking Horse APA (if 

any) are appropriately crafted to and should maximize the value of the Assets. 

41. Moreover, the Debtors are required under the DIP Credit Agreement to complete the 

Auction and Sale Process on the timetable set forth therein and contemplated by the Bidding 

Procedures. The Debtors believe this timetable is fair and reasonable in light of the circumstances 

of these chapter 11 cases. 

42. The Debtors submit that the Bidding Procedures and entry into a Stalking Horse

APA (as applicable) are necessary and promote a fair and transparent sale process for the Debtors

to obtain the highest or otherwise best value for the Assets. Therefore, the Debtors request the 

Court approve the Bidding Procedures and entry into the Stalking Horse APA through the Bidding 

Procedures Order.

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III. The Bid Protections are an Actual and Necessary Cost to Preserve the Value of the 

Estates 

43. The Debtors have formulated a bidding process that the Debtors believe will induce 

prospective competing bidders to expend the time, energy, and resources necessary to submit a 

bid, and which the Debtors believe is fair and reasonable and will provide a benefit to the 

Debtors’ estates and stakeholders. Given the Stalking Horse Purchaser’s (if any) time and 

resources expended on, among other things, negotiating the Stalking Horse APA, the Debtors have 

concluded that the provision of the stalking horse expense reimbursement of up to $50,000 (the 

“Expense Reimbursement”) and break-up fee in an amount not to exceed 3% of the cash 

component of the Stalking Horse Bid (if any) (the “Break-Up Fee” and together with the Expense 

Reimbursement, the “Bid Protections”) are warranted under the circumstances at hand. 

44. The use of bid protections has become an established practice in chapter 11 asset 

sales. Courts have acknowledged that the approval of expenses in connection with substantial 

sales in bankruptcy is warranted to compensate an unsuccessful acquirer whose initial offer served 

as the basis and catalyst for higher or better offers. See In re Energy Future Holdings Corp., 904 

F.3d 298, 313 (3d Cir. 2018) (citing In re O’Brien Env’t. Energy, Inc., 181 F.3d 527, 535 (3d Cir. 

1999)); In re Reliant Energy Channelview LP, 594 F.3d 200, 206 (3d Cir. 2010) (holding 

allowance of expense reimbursement to induce initial bid is permissible); In re Ebix, Inc., No. 23-

80004 (SWE) (Bankr. N.D. Tex. Jan. 18, 2024) [Docket No. 199] (approving a break-up fee to a 

stalking horse bidder); In re Impel Pharmaceuticals Inc., No. 23-80016 (SGJ) (Bankr. N.D. Tex. 

Jan. 11, 2024) [Docket No. 137] (same); In re Stone Energy Corp., No. 16-26390 (MI) (Bankr. 

S.D. Tex. Jan. 18, 2017) [Docket No. 316] (same). The allowability of such expenses, depends 

upon “the requesting party’s ability to show that the fees [a]re actually necessary to preserve the 

value of the estate.” Energy Future Holdings, 904 F.3d at 313. 

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45. The Debtors submit that the allowance of the Bid Protections is in the best interests 

of the Debtors’ estates and their creditors because it will be: (a) the actual and necessary costs and 

expenses of preserving the Debtors’ estates as defined by sections 503(b) and 507(a)(2) of the 

Bankruptcy Code; (b) commensurate to the real and substantial benefit conferred upon the 

Debtors’ estates by the Stalking Horse Purchaser if one is identified; (c) reasonable and appropriate 

considering the size and nature of the proposed sale transaction(s) and comparable transactions, as 

well as the commitments and efforts made by the Stalking Horse Purchaser (if any); (d) necessary 

to incentivize the Stalking Horse Purchaser to continue pursuing the sale transaction(s) and abide 

by the Stalking Horse APA; and (e) subject to all parties in interests’ rights to object and be heard 

with respect to approval of such Bid Protections.

46. Indeed, the Bid Protections are appropriate because entry into a Stalking Horse APA 

will enable the Debtors to secure an adequate floor price for the Assets, thereby ensuring that 

competing Bids would be materially higher or otherwise better than the bid reflected in such

Stalking Horse APA—a clear benefit to the Debtors’ estates. Moreover, it is unlikely a Stalking 

Horse Purchaser would be willing to agree to act in such capacity without being granted the Bid 

Protections. Without the Bid Protections, the Debtors may lose the opportunity to obtain the 

highest or otherwise best offer for the Assets and would certainly lose the downside protection that 

will be afforded by the existence of the Stalking Horse Purchaser.

47. Additionally, the Stalking Horse Purchaser will expend considerable time, money,

and resources in connection with the transaction proposed in the Stalking Horse APA and will be

committed to engaging in extended and lengthy good faith negotiations if any Qualifying Bids are 

received. The Stalking Horse Purchaser’s efforts, including the due diligence and the negotiation 

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of transaction documents, will further benefit the process by providing the Debtors and Potential 

Bidders with a documented, precedent transaction on which to formulate competing bids. 

48. For all of the foregoing reasons, the Debtors believe that granting the Bid Protections

will maximize the value realized for the benefit of the Debtors’ estates, their creditors, and other 

parties in interest and should therefore be approved.

IV. Sufficient Business Justification Exists for Entry into the Stalking Horse APA Under 

Sections 105(a) and 363(b) of the Bankruptcy Code

49. Pursuant to section 105(a) of the Bankruptcy Code, a “[c]ourt may issue any order, 

process or judgment that is necessary or appropriate to carry out the provisions of this title.” 

11 U.S.C. § 105(a). Section 363(b) of the Bankruptcy Code provides that a debtor, “after notice 

and a hearing, may use, sell, or lease, other than in the ordinary course of business, property of the 

estate.” 11 U.S.C. § 363(b). Although section 363(b) does not specify a standard for determining 

when it is appropriate for a court to authorize the use, sale or lease of property of the estate, courts 

have required that such use, sale or lease be based upon the sound business judgment of the debtor. 

See, e.g., In re Cont’l Airlines, Inc., 780 F.2d 1223, 1226 (5th Cir. 1986); see also In re ASARCO 

LLC, 441 B.R. 813, 824 (S.D. Tex. 2010), aff’d 650 F.3d 593 (5th Cir. 2011); In re San Jacinto 

Glass Indus., Inc., 93 B.R. 934, 944 (Bankr. S.D. Tex. 1988).

50. The demonstration of a valid business justification by the debtor leads to a strong 

presumption “that in making [the] business decision the directors of a corporation acted on an 

informed basis, in good faith and in the honest belief that the action taken was in the best interests 

of the company.” Official Comm. of Subordinated Bondholders v. Integrated Res., Inc. (In re 

Integrated Res., Inc.), 147 B.R. 650, 656 (S.D.N.Y. 1992) (quoting Smith v. Van Gorkom, 

488 A.2d 858, 872 (Del. 1985)).

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51. The Debtors submit that their decision to enter into a Stalking Horse APA, to the 

extent a Stalking Horse Purchaser is identified, represents a reasonable exercise of the Debtors’ 

business judgment and should be approved. The Stalking Horse Purchaser will serve as baseline 

for all prospective bidders in the sale process. The proposed Bidding Procedures taken together 

with a Stalking Horse APA serving as a baseline for Debtors’ marketing and sale process will 

enable the Debtors to achieve substantial interest in, and consideration for, the Assets. Further, 

the proposed sale process will confirm whether the Stalking Horse Bid (if any) represents the 

highest or otherwise best offer for the Assets.

52. The Debtors will conduct an extensive and fulsome process to market the Assets. 

The open and fair auction and sale process contemplated by the Bidding Procedures will ensure 

that the Debtors’ estates receive the highest or best value available for the Assets by allowing the 

market to dictate the value of the Assets and will provide a greater recovery than would be provided 

by any other available alternative. Furthermore, compliance with the Bidding Procedures will 

ensure the fairness and reasonableness of the consideration to be paid by the Stalking Horse 

Purchaser or, in the event a Stalking Horse Purchaser is not identified or not the Winning Bidder, 

then the Winning Bidder, and establish that the Debtors and such bidder have proceeded in good 

faith.

53. Additionally, the Debtors believe that the notice procedures described above are 

reasonable and adequate under the circumstances. Bankruptcy Rules 2002(a) and (c) require the 

Debtors to notify creditors of the Sale, the terms and conditions of the Sale, the time and place of 

the Auction, and the deadline for filing any objections. The Debtors believe that the proposed 

notice procedures fully comply with Bankruptcy Rule 2002, and are reasonably calculated to 

provide timely and adequate notice of the Stalking Horse APA, the Bidding Procedures, the 

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Auction, the Sale Hearing, and the Sale to the Debtors’ creditors and all other parties in interest 

that are entitled to notice, as well as those parties that have expressed a bona fide interest in 

acquiring the Assets.

54. The Sale, conducted in accordance with the Bidding Procedures, will generate 

significant value for the Debtors’ estates, and represents the best path forward for maximizing 

recoveries in connection with these chapter 11 cases. The Debtors submit that ample business 

justification exists for their entry into a Stalking Horse APA and therefore request Court approval

thereof.

V. The Assumption and Assignment of the Assumed Contracts in Connection with the 

Sale Satisfies Section 365 of the Bankruptcy Code

55. Section 365(a) of the Bankruptcy Code provides, in pertinent part, that a debtor in 

possession, “subject to the court’s approval, may assume or reject any executory contract or 

unexpired lease of the debtor.” 11 U.S.C. § 365(a). Section 365 has been interpreted to authorize 

the debtor-in-possession “to assume or reject executory contracts, enabling the [debtor] to 

maximize the value of the debtor’s estate by assuming executory contracts that benefit the estate 

and rejecting those that do not.” Cinicola v. Scharffenberger, 248 F.3d 110, 119 (3d Cir. 2001). 

56. The standard applied to determine whether the assumption of a contract or an 

unexpired lease should be authorized is the “business judgment” standard. See NLRB v. Bildisco 

& Bildisco, 465 U.S. 513, 523 (1984); In re AbitibiBowater Inc., 418 B.R. 815, 831 (Bankr. D. 

Del. 2009) (finding that a debtor’s decision to assume or reject an executory contract will stand so 

long as “a reasonable business person would make a similar decision under similar 

circumstances.”); In re HQ Glob. Holdings, Inc., 290 B.R. 507, 511 (Bankr. D. Del. 2003) (stating 

a debtor’s decision to reject an executory contract is governed by the business judgment standard 

and can only be overturned if the decision was the product of bad faith, whim, or caprice). As 

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described above, “[t]he business judgment rule ‘is a presumption that in making a business 

decision the directors of a corporation acted on an informed basis, in good faith and in the honest 

belief that the action taken was in the best interest of the company.’” Integrated Res., Inc., 147 

B.R. at 656 (quoting Smith v. Van Gorkom, 488 A.2d at 872). Indeed, “the sole issue is whether 

the rejection benefits the estate.” In re HQ Glob., 290 B.R. at 511.

57. The business judgment rule is crucial in chapter 11 cases and shields a debtor’s

management from judicial second-guessing. See id.; see also Comm. of Asbestos Related Litigants 

and/or Creditors v. Johns-Manville Corp. (In re Johns-Manville Corp.), 60 B.R. 612, 615-16 

(Bankr. S.D.N.Y. 1986) (“[T]he Code favors the continued operation of a business by a debtor and 

a presumption of reasonableness attaches to a debtor’s management decisions.”). Generally, courts 

defer to a debtor in possession’s business judgment to assume or reject an executory contract or 

lease. See Wheeling-Pittsburgh Steel Corp. v. West Penn Power Co., (In re Wheeling-Pittsburgh 

Steel Corp.), 72 B.R. 845, 846 (Bankr. W.D. Pa. 1987) (stating that the business judgment test 

“requires only that the trustee [or debtor in possession] demonstrate that [assumption or] rejection 

of the executory contract will benefit the estate.”); see also N.L.R.B. v. Bildisco & Bildisco, 465 

U.S. 513, 523 (1984); Control Data Corp. v. Zelman (In re Minges), 602 F.2d 38, 42–43 (2d Cir. 

1979); In re Riodizio, Inc., 204 B.R. 417, 424-25 (Bankr. S.D.N.Y. 1997); In re G Survivor Corp., 

171 B.R. 755, 757 (Bankr. S.D.N.Y. 1994).

58. Here, the Debtors have exercised their sound business judgment in determining that 

assumption and assignment of the Assumed Contracts is in the best interests of the Debtors and 

their estates, and accordingly the Court should approve the proposed assumption under 

section 365(a) of the Bankruptcy Code. See, e.g., In re Tex. Health Enters. Inc., 72 F. App’x 122, 

127 (5th Cir. 2003) (“[T]he bankruptcy code makes it clear that it is the choice of the debtor-inCase 24-80069-sgj11 Doc 138 Filed 11/11/24 Entered 11/11/24 22:55:43 Desc

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possession, and not the bankruptcy court, to assume or reject an executory contract”); In re 

Philadelphia Newspapers, LLC, 424 B.R. 178, 182-83 (Bankr. E.D. Pa. 2010) (stating that if a 

debtor’s business judgment has been reasonably exercised, a court should approve the assumption 

or rejection of an executory contract or unexpired lease); Westbury Real Estate Ventures, Inc. v. 

Bradlees, Inc. (In re Bradlees Stores, Inc.), 194 B.R. 555, 558 n.1 (Bankr. S.D.N.Y. 1996); Summit 

Land Co. v. Allen (In re Summit Land Co.), 13 B.R. 310, 315 (Bankr. D. Utah 1981) (holding that, 

absent extraordinary circumstances, court approval of a debtor’s decision to assume or reject an 

executory contract “should be granted as a matter of course”).

59. As set forth above, the Sale will provide significant benefits to the Debtors’ estates. 

To that end, the assumption, assignment, and sale of the Assumed Contracts is necessary for the 

Debtors to obtain the benefits of a Stalking Horse APA or an Alternative APA, as applicable. The 

Assumed Contracts are necessary to operate the Debtors’ business and, as such, they are essential 

to inducing the highest or otherwise best bid for the Debtors’ Assets. Any purchaser is unlikely to 

acquire assets on a going-concern basis unless the contracts and leases required to operate the 

business are included in the contemplated transaction. In addition, the Assumed Contracts will be 

assumed and assigned through the process approved by the Court pursuant to the Bidding 

Procedures Order and, therefore, will be reviewed by key constituents in these chapter 11 cases.

60. In addition, under section 365(k) of the Bankruptcy Code, the assignment by a debtor 

to an entity of a contract or lease “relieves the trustee and the estate from any liability for any 

breach of such contract or lease occurring after such assignment.” 11 U.S.C. § 365(k). Thus, 

following an assignment to the Winning Bidder of any Assumed Contract, the Debtors will be 

relieved from any liability for any subsequent breach associated therewith.

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61. To the extent any defaults exist under any Assigned Contract, any such default will 

be promptly cured, or adequate assurance that such default will be cured will be provided prior to 

the assumption and assignment. If necessary, the Debtors will submit facts prior to or at the Sale

Hearing to show the financial credibility of the Stalking Horse Purchaser or other Winning Bidder, 

as the case may be, and willingness and ability to perform under the Assigned Contracts. The Sale

Hearing will, therefore, provide the Court and other interested parties the opportunity to evaluate 

and, if necessary and supported by a timely objection in accordance with the Sale Timeline, 

challenge the ability of the Stalking Horse Purchaser or Winning Bidder, as the case may be, to 

provide adequate assurance of future performance under the Assigned Contracts, as required under 

section 365(b)(1)(C) of the Bankruptcy Code.

62. Section 365(f)(2) of the Bankruptcy Code provides that a debtor may assign an 

executory contract or unexpired lease of nonresidential real property if “adequate assurance of 

future performance by the assignee of such contract or lease is provided.” 11 U.S.C. § 365(f)(2). 

The words “adequate assurance of future performance” must be given a “practical, pragmatic 

construction” in light of the facts and circumstances of the proposed assumption. See In re Fleming 

Cos., Inc., 499 F.3d 300, 307 (3d Cir. 2007) (internal citation omitted); Carlisle Homes, Inc. 

v. Azzari (In re Carlisle Homes, Inc.), 103 B.R. 524, 538 (Bankr. D.N.J. 1988) (same); see also In 

re Natco Indus., Inc., 54 B.R. 436, 440 (Bankr. S.D.N.Y. 1985) (finding that adequate assurance 

of future performance does not mean absolute assurance that debtor will thrive and profit); In re 

Bon Ton Rest. & Pastry Shop, Inc., 53 B.R. 789, 803 (Bankr. N.D. Ill. 1985) (“Although no single 

solution will satisfy every case, the required assurance will fall considerably short of an absolute 

guarantee of performance.”).

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63. Specifically, adequate assurance may be given by demonstrating the 

assignee’s financial health and experience in managing the type of enterprise or property assigned. 

See In re Bygaph, Inc., 56 B.R. 596, 605-06 (Bankr. S.D.N.Y. 1986) (holding that adequate 

assurance of future performance is given where the assignee of lease has financial resources and 

expressed a willingness to devote sufficient funding to the business to ensure its success, and that 

in the leasing context, the chief determinant of adequate assurance is whether rent will be paid).

64. Here, the Stalking Horse Purchaser (if any) or other Winning Bidder will have 

provided adequate assurance of future performance with respect to any Assumed Contract. For its 

bid to be deemed a Qualifying Bid, each Potential Bidder will be required to provide evidence 

supporting its ability to comply with the requirements of adequate assurance of future performance 

under section 365(f)(2)(B) and, if applicable, section 365(b)(3) of the Bankruptcy Code (the 

“Adequate Assurance Information”), including: (a) the bidder’s financial wherewithal and 

willingness to perform under any contracts that are assumed and assigned to such Potential Bidder; 

and (b) a contact person for the proposed assignee that the Counterparty may directly contact in 

connection with the adequate assurance of future performance. To the extent that the Potential

Bidder (other than the Stalking Horse Purchaser) is a newly formed acquisition entity or the like, 

the financial and other information supporting the Potential Bidder’s financial wherewithal shall 

include financial and other information supporting the financial wherewithal of the Potential

Bidder’s parent company or sponsor. Furthermore, given that the Debtors will submit evidence 

that all requirements for the assumption and assignment of such contracts will be satisfied prior to 

or at the Sale Hearing, the Court and other interested parties will have the opportunity to evaluate 

the ability of the Stalking Horse Purchaser (if any) or other Winning Bidder to provide adequate 

assurance of future performance.

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65. Therefore, the Debtors respectfully request the Court to approve the proposed 

assumption and assignment of the Assumed Contracts.

VI. The Forms of Notice and Notice Procedures for the Bidding Procedures, the Auction,

and the Sale Hearing Are Reasonable and Appropriate.

66. Pursuant to Bankruptcy Rules 2002(a) and (c), the Debtors are required to notify 

creditors of the Sale, including a disclosure of the time and place of any auction, the terms and 

conditions of the Sale, and the deadline for filing any objections thereto. See Fed. R. Bankr. P. 

2002 (a), (c).

67. The Debtors submit that the notice procedures described above fully comply with 

Bankruptcy Rule 2002 and are reasonably calculated to provide timely and adequate notice of the 

Bidding Procedures, the Auction, and the Sale Hearing to the Debtors’ creditors and all other 

interested parties that are entitled to notice, as well as those parties that have expressed a bona fide 

interest in acquiring the Assets.

68. Accordingly, the Debtors respectfully request that the Court approve the notice 

procedures set forth herein, including the form and manner of service of the Sale Notice, and that 

no other or further notice of the Bidding Procedures, the Auction, and the Sale Hearing is necessary 

or required.

WAIVER OF STAY UNDER BANKRUPTCY RULE 6004(H) AND 6006(D)

69. Pursuant to Bankruptcy Rule 6004(h), “[a]n order authorizing the use, sale, or lease 

of property other than cash collateral is stayed until the expiration of 14 days after entry of the 

order, unless the court orders otherwise.” Fed. R. Bankr. P. 6004(h). Furthermore, Bankruptcy 

Rule 6006(d) provides that an “order authorizing the trustee to assign an executory contract or 

unexpired lease under § 365(f) is stayed until the expiration of 14 days after the entry of the order, 

unless the court orders otherwise.” Fed. R. Bankr. P. 6006(d). As set forth throughout this Motion, 

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any delay in the Debtors’ ability to consummate the Sale on the timeline contemplated by the 

Bidding Procedures would be detrimental to the Debtors, their creditors and estates.5

70. For this reason and those set forth above, the Debtors submit that ample cause exists 

to justify a waiver of the fourteen day stay imposed by Bankruptcy Rule 6004(h) and 6006(d), to 

the extent applicable.

NOTICE

71. Notice of this Motion will be provided to: (a) the Office of the United States Trustee 

for the Northern District of Texas; (b) counsel to the Stalking Horse Purchaser (c) all parties known 

by the Debtors to assert a lien, encumbrance, or any other interest in or on any of the Assets, 

including, without limitation, preferential purchase rights or rights of first refusal on any of the 

Debtors’ Assets; (d) all persons known or reasonably believed to have asserted an interest in or 

claim to any of the Assets; (e) all non-debtor counterparties to the Assumed Contracts (defined 

below); (f) the Office of the United States Attorney for the Northern District of Texas; (g) the 

Office of the Attorney General in each state in which the Debtors operate; (h) the Office of the 

Secretary of State in each state in which the Debtors operate; (i) the Internal Revenue Service and 

all state and local taxing authorities in the states in which the Debtors have or may have any tax 

liability; (j) all environmental authorities having jurisdiction over any of the Assets, if any; (k) the 

Federal Trade Commission; (l) the United States Attorney General/Antitrust Division of the 

Department of Justice; (m) all of the Debtors’ other known creditors and equity security holders; 

(n) counsel to the DIP Lender; (o) Midland Loan Services, a Division of PNC Bank, National 

Association as servicer and control party (the “Control Party”) and (p) all other parties that have 

5

 The Debtors will also seek waivers of the stays under Bankruptcy Rules 3020(e) and 6004(h) through entry of the 

Sale Order.

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filed a notice of appearance and demand for service of papers in these chapter 11 cases as of the 

service date. The Debtors will also provide copies of the Sale Notice to parties who express, to 

the Debtors or their advisors, an interest in acquiring some or all of the Assets. In light of the 

nature of the relief requested herein, the Debtors submit that no other or further notice is necessary.

[Remainder of Page Intentionally Left Blank]

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WHEREFORE, the Debtors request entry of the Bidding Procedures Order and the Sale

Order granting the relief requested herein and such other and further relief as is just and proper. 

Dated: November 11, 2024 Respectfully submitted by:

/s/ Holland N. O’Neil 

FOLEY & LARDNER LLP

Holland N. O’Neil (TX 14864700) 

Mark C. Moore (TX 24074751) 

Zachary C. Zahn (TX 24137675) 

2021 McKinney Avenue, Suite 1600 

Dallas, TX 75201 

Telephone: (214) 999-3000 

Facsimile: (214) 999-4667 

honeil@foley.com 

mmoore@foley.com 

zzahn@foley.com 

- and - 

ROPES & GRAY LLP

Chris L. Dickerson (pro hac vice pending) 

Rahmon J. Brown (pro hac vice pending) 

191 North Wacker Drive, 32nd Floor 

Chicago, IL 60606 

Telephone: (312) 845-1200 

Facsimile: (312) 845-5500 

chris.dickerson@ropesgray.com 

rahmon.brown@ropesgray.com 

 

Proposed Counsel to the Debtors 

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CERTIFICATE OF SERVICE

I certify that on November 11, 2024, a true and correct copy of the foregoing document 

was served electronically by the Court’s PACER system. 

/s/ Zachary C. Zahn 

Zachary C. Zahn 

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