UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re Chapter 11 BACK YARD BURGERS, INC., et a/. Debtors.

(Joint Administration Pending)

1

Case No. 12-12882 (PJW)

Ref. Docket No. 15

INTERIM ORDER AUTHORIZING THE DEBTORS TO PAY CERTAIN PACA CLAIMS Upon the motion (the "Motion"i filed by the above-captioned debtors and debtors-in-possession (collectively, the "Debtors") seeking entry of an order; the Court having reviewed the Motion and the First Day Declaration and having considered the statements of counsel and the evidence adduced with respect to the Motion at a hearing before the Court (the "Hearing") (i) approving procedures for the treatment of claims arising under the under the Perishable Agricultural Commodities Act of 1930, as amended, 7 U.S.C. 499a et seq.

("PACA"), (ii) authorizing the Debtors to pay the Allowed PACA Claims; and (iii) granting certain related relief; and the Court having found that (i) the Court has jurisdiction over this matter pursuant to 28 U.S.C. 157 and 1334, (ii) venue is proper in this district pursuant to 28 U.S.C. 1409, (iii) this is a core proceeding pursuant to 28 U.S.C. 157(b), (iv) notice of the Motion and the Hearing was sufficient under the circumstances and (v) there is good cause to waive the fourteen-day stay imposed by Bankruptcy Rule 6004(h) to the extent it is applicable; after due deliberation the Court having determined that the relief requested in the Motion is
The Debtors in these chapter II Cases, along with the last four digits of each Debtor's federal tax identification number, are: Back Yard Burgers, Inc. (7I63), BYB Properties, Inc. (9046), Nashville BYB, LLC (6507) and Little Rock Back Yard Burgers, Inc. (9133). The mailing address of the Debtors is: St. Clouds Building, 500 Church Street, Suite 200, Nashville, TN 372I9. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Motion.
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(i) necessary and essential for the Debtors' reorganization, (ii) in the best interests of the Debtors, their estates and their creditors and (iii) necessary to prevent immediate and irreparable harm to the Debtors and their estates; and good and sufficient cause having been shown; IT IS HEREBY ORDERED THAT: 1. 2. The Motion is GRANTED on an interim basis as set forth herein. Subject to this Order, the Debtors, in their sole discretion are authorized to

reconcile and to pay the prepetition Allowed PACA Claims in an amount not to exceed $21,600 pursuant to the PACA Procedures set forth below: a. PACA Notices. Any PACA Claimant seeking the protection of a PACA Trust must deliver, or have previously delivered, a valid and timely PACA Notice to the Debtors in accordance with the statutory guidelines set forth in 7 U.S.C. 499e(c)(3)-(4). Notice of PACA Order. The Debtors will send a copy of the order approving this Motion (the "PACA Order") by first-class mail to all persons or entities that have delivered a valid and timely PACA Notice (or a document that purports to be a valid and timely PACA Notice) to the Debtors under PACA or similar state law or regulation, but only to the extent that payment has been received on account of the PACA Claim. Allowed PACA Claims. If the Debtors determine that a claim asserted in a PACA Notice is valid, the Debtors shall pay such claim as an administrative expense of the Debtors' estates as soon as practicable after receipt of the PACA Notice, or if later, in accordance with normal trade terms (the "Allowed PACA Claim"). Any holder of a PACA Claim that accepts payment from the Debtors on account of its Allowed PACA Claim shall be deemed to have waived, released, and discharged any and all claims, of any type, kind, or priority on account of or in connection with its PACA Claim against the (i) Debtors, (ii) any former, present, or future officer, director, or employee of the Debtors, (iii) the Debtors' assets and properties and (iv) any funds or amounts held in trust by the Debtors. Settled Claim Report. Ninety days from entry of the final order approving the PACA Procedures, and every 90 days thereafter, the Debtors shall file a report with the Court listing all Allowed PACA Claims (the "PACA Claims Report") for the preceding 90 day period. The PACA Claims Report shall be sent by first class mail to the following parties: (i) the Office of the United States Trustee for the District of Delaware, (ii) counsel for any statutory committee appointed in these chapter 11

b.

c.

d.

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cases, and (iii) all parties filing a PACA Claim that are listed in such PACA Claims Report. e. Disputed Claim Report. As soon as practicable after the period ending 90 days after entry of the PACA Order, the Debtors will file with the Court a report (the "Disputed PACA Claims Report") that lists the PACA Claims the Debtors believe are invalid in whole or in part. The Disputed PACA Claims Report shall be sent by first-class mail to the following parties: (i) the Office of the United States Trustee for the District of Delaware, (ii) counsel for any statutory committee appointed in these chapter 11 cases and (iii) all parties filing a PACA Claim that are listed in such Disputed PACA Claims Report. Objections to Disputed PACA Reports. A PACA Claimant (each, an "Objecting Claimant") objecting to the Debtors' determination of the PACA Claim as set forth in the Disputed PACA Claims Report must provide the Debtors with evidence or documentation demonstrating the basis for the dispute, including a statement identifying which information in the Disputed PACA Claims Report is incorrect, specifying the correct information, and stating any legal or factual basis for the objection (each, a "PACA Objection"). Objections must be served on (i) counsel to the Debtors and (ii) counsel for any statutory committee appointed in these chapter 11 cases, so as to be actually received no later than the 20th day following the date the Disputed PACA Claims Report is filed (the "PACA Objection Deadline"). With respect to each PACA Claim in the Disputed PACA Claims Report as to which no objection is timely received, such PACA Claim shall be deemed an invalid PACA Claim (in whole or in part, as specified in the Disputed PACA Claims Report) without further order of the Court and, to the extent invalid, shall not be entitled to the priorities provided under PACA. With respect to each PACA Claim in the Disputed PACA Claims Report as to which an objection is timely received and the parties resolve the objection, the PACA Claim shall be treated as an Allowed PACA Claim or a disallowed PACA Claim, in whole or part, as agreed to by the parties, without further order of the Court, as set forth in the next PACA Claims Report. With respect to each PACA Claim in the Disputed PACA Claims Report as to which an objection is timely received and the objection cannot be resolved by the parties, the PACA Claim shall not be deemed valid or invalid except upon order of the Court. If a resolution is not reached by at least sixty (60) days after the date of the Disputed PACA Claims Report, or such later period as may be agreed to by the Debtors and the claimant, the Debtors will arrange for a hearing before the Court.

f.

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3.

Pending completion of the PACA Procedures, parties asserting PACA Claims

shall not take any other action to establish the validity and amount of their PACA Claims, including the commencement of adversary proceedings, except pursuant to the PACA Procedures. The PACA Procedures are the sole and exclusive method with respect to the

resolution and payment ofPACA Claims asserted against the Debtors. 4. Nothing in this Order impairs the rights of holders ofthe PACA claims to enforce

their rights under PACA consistent with applicable law, including the Bankruptcy Code and specifically the automatic stay of Bankruptcy Code section 362, or to seek redress from the Court with respect to their rights under PACA. 5. The Banks are authorized to receive, process, honor and pay all checks presented

for payment of, and to honor all funds transfer requests made by the Debtors related to, PACA Claims paid pursuant to this Order, regardless of whether such checks were presented or funds transfer requests were submitted prior to or after the Petition Date, provided that funds are available in the Debtors' accounts to cover such checks and funds transfers. The Banks are authorized to rely on the Debtors' designation of any particular check or funds transfer as approved by this Order. 6. Nothing in the Motion or this Order, nor the Debtors' payment of claims pursuant

to this Order, shall be deemed or construed as: (i) an admission as to the validity of any claim against the Debtors; (ii) a waiver of the Debtors' rights to dispute any claim on any grounds; (iii) a promise to pay any claim; or (iv) an implication or admission that any particular claim is a PACA Claim. 7. The requirements of Bankruptcy Rule 6003(b) have been satisfied with respect to

the payments authorized by this Order.

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8.

This Order shall be immediately effective and enforceable upon its entry. To the

extent that it may be applicable, the fourteen-day stay imposed by Bankruptcy Rule 6004(h) is hereby waived. 9. is The deadline by which objections to the Motion and the Final Order must be filed

Nou.

'5' , 2012 at 4:00p.m. (Prevailing Eastern Time).

A final hearing, ifrequired, on the

Motion will be held on

Nov. lS

, 2012 at l: '?o

-JLm. (Prevailing Eastern Time). Objections

must be served on (i) the Debtors, c/o Back Yard Burgers, Inc., St. Clouds Building, 500 Church Street, Suite 200, Nashville, TN 37219 (Attn: Laura DeRise, Esq.), and (ii) the Debtors' counsel, Greenberg Traurig, LLP, The Nemours Building, 1007 North Orange Street, Suite 1200, Wilmington, Delaware 19801 (Attn: Dennis A. Meloro, Esq.) and Greenberg Traurig, LLP, 200 Park Avenue, New York, New York 10166 (Attn: Maria J. Diconza, Esq, diconzam@gtlaw.com and Matthew L. Hinker, Esq, hinkerm@gtlaw.com, and the Office of the United States Trustee, Attn; Juliet Sarkessian, 844 King Street, Suite 2207, Wilmington, DE 19801, Fax: 302-573-6497, Juliet.M.Sarkessian@usdoj .gov. 10. Notwithstanding anything to the contrary contained herein, (i) any payment made,

or authorization contained, hereunder shall be subject to the requirements imposed on the Debtors under any order approving debtor-in-possession financing (a "DIP Order"), and (ii) any claim for which payment is authorized pursuant to this Order that is treated as an administrative expense of the Debtors' estates shall be and is subject and subordinate to any and all claims, liens, security interests and priorities granted to the DIP Agents (as defined in the DIP Order) in accordance with and subject to the terms of the applicable DIP Order, and payment on any such claim shall be subject to any and all restrictions on payments in the DIP Order and any other order of the Court authorizing the Debtors' use of cash collateral.

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Dated:

ce:> ~/ /'

, 2012

UNITED STATES BANKRUPTCY JUDGE

P~S~

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