Eagle Food Ctrs Bankruptcy HrgIN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
In re~
EAGLE FOOD CENTERS, INC.,
Debtors.
) Case No. 03-15299 (PSH)
) (Jointly Administered)
) Chapter 11
) Hon. Pamela S. Hollis
) Hearing Date: November 21, 2003
) Hearing Time: 10:00 a.m. (Prevail-
) lng Central Time)
PROPOSED AGENDA FOR NOVEMBER 21, 2003 HEARING
I. Introduction
Set forth below is a proposed agenda for the Hearing scheduled for
November 21, 2003 beginning at 10:00 a~m (Prevailing Central Time) (the "Agenda").
The information contained in the Agenda reflects documents received in our offices as
of the date hereof. Counsel for the Debtors have served a copy of this Agenda on the
Master Service List and those persons who have entered an appearance with respect to
any item listed on the Agenda.
The matters set for hearing on November 21, 2003, are divided into the
following categories for the purposes of this Agenda:
[. Introduction
Il. Matters Requested to be Continued or Adjourned
ffi. Sale Matters
IV. Uncontested, Agreed or Settled Matters
V. Contested Matters
II.
Matters Requested to be Continued or Adjourned
1. Motion to Lift Stay by Barbara Bogeart (Docket No. 728)
Objections Filed: None.
Related Items:
Motion to Lift Stay by Barbara Bogeart
(Docket No. 702); Minute Order Striking
the Motion to Lift Stay by Barbara Bogeart
(Docket No. 711).
Status:
Pursuant to an agreed order, the Debtors
respecC'ully request that this matter be
continued to December 12, 2003 and that
the objection deadline be extended for the
Debtors to December 5, 2003.
Motion for an Order Pursuant to 11 U.S.C. §§ 105(a), 365(a) and
554(a} Authorizing Rejection of Certain Unexpired Nortresiden-
rial Real Property Leases and Authorizing the Debtors to Aban-
don Certain Surplus Furniture, Fixtures and Equipment (as it
pertalus to store 329 only) (Docket No. 592)
Objections Filed:
Objection of Government Employees In-
surance Company to Motion for an Order
Pursuant to 11 U.S.C. ~ 105(a), 365(a)
and 554(a} Authorizing Rejection of Cer-
tain Unexpired Non-Residential Real
Property Leases and Authorizing the Debt-
ors to Abandon Certain Surplus Furniture,
Fixtures and Equipment (Docket No. 631).
Related Items:
Debtors' Omnibus Response to (1)Objec-
tion of Meadowdale Shopping Centers
(Store 087), (II) Limited Objection of RD
Hobson ~Store 110), Oeampo Belvidere,
LLC (Store 311), Ocampo Dekalb, LLC
(Store 70), and Ocampo Galesburg, LLC
(Store 012), (lid Objection of Government
Employees Insurance Company (Store
III.
Sale Matters
3.
Status:
329), and (BO Objection of lnland Real
Estate Corporation (Store 007) to Debtors'
Motion for Order Pursuant to 11 U.S.C.
105(a), 365(a) and 554(a) Authorizing Re-
jection of Certain Unexpired Nonresiden-
tial Real Property Leases and Authorizing
the Debtors to Abandon Certain Surplus
Furniture, Fixtures and Equipment
(Docket No. 662); Agreed Order Continu-
ing the Objection of Government Employ-
ees Insurance Company to Motion for an
Order Pursuant to I1 U.S.C. 3%g lOS(a),
365(a) and 554(a) Authorizing Rejection of
Certain Unexpired Nonresidential Real
Property Leases and Authorizing the Debt-
ors to Abandon Certain Surplus Furniture.
Fixtures and Equipment (Docket No. 677);
Agreed Order Continuing the Objection of
Government Employees Insurance Com-
pany to Motion for an Order Pursuant to
11 U.S.C. ~3~ 105(a), 365(a) and 554(a)
Authorizing Rejection of Certain Unex-
pired Nonresidential Real Property Leases
and Authorizing the Debtors to Abandon
Certain Surplus Furniture, Fixtures and
Equipment (Docket No. 712).
The Debtors respecOeully request that this
matter be continued to the December 12,
2003 Omnibus Hearing.
Motion for Orders Pursuant to 11 U.S.C. §§ 105(a), 363, 365 and
1146(c) and Fed. R. Bankr. P. 2002, 6004, 6006 and 9014 (I)
Approving (A) Bidding Procedures, (B) The Granting of Certain
Bid Protections, (C) Form of Asset Purchase Agreement and
Lease Termination Agreement, (D) the Form and Manner of Sale
Notices, and (E) the Setting of a Sale Hearing, and (ID Authoriz-
ing and Approving (A) The Sale of Certain of the Debtors' Assets
Free and Clear of Liens, Claims and Encumbrances, 03) the
Assumption and Assignment of Certain Executory Contracts and
Unexpired Leases and (C) The Assumption of Certain Liabilities
(Docket No. 287)
(a)
Acquisition Agreement, by and between Eagle Food
Centers, Inc., a Delaware Corporation, and Ocampo
Galesburg, LLC, an Illinois limited liability company
(Store No. 12) (Docket No. 734)
Objections Filed: None.
Related Items: None.
Status:
A proposed order will be submitted
for the Court's consideration.
Acquisition Agreement, by and between Eagle Food
Centers, Inc., a Delaware Corporation, end Ocampo
DeKaib, LLC, an Illinois limited liability company (Store
No. 70) (Docket No. 734)
Objections Filed: None.
Related Items: None.
Status:
A proposed order will be submitted
for the Court's consideration.
(c)
Acquisition Agreement, by and between Eagle Food
Centers, Inc., a Delaware Corporation, and Ocampo
Belvidare, LLC, an Illinois limited liability company
(Store No. 311) (Docket No. 734)
Obj'ections Filed: None.
Related Items:
Notice of Withdrawal of Store 311
Acquisition Agreement by and be-
tween Eagle Food Centers, Inc. and
Central Grocers (Docket No. 735).
Status:
A proposed order will be submitted
for the Court's consideration.
(d)
Acquisition Agreement, by and between Eagle Food
Centers, Inc., a Delaware Corporation, and Illinois Market
Holdings, LLC (Store Nos. 008, 009, 039 and 062)
(Docket No. 748)
Objections Filed: None.
Related Items:
Notice of Withdrawal of Store 008
Acquisition Agreement by and be-
tween Eagle Food Centers, Inc. and
David W. Tennant (Docket No.
753).
Status:
,4 proposed order will be submitted
for the Court's consideration.
Uncontested, Agreed or Settled Matters
Application ofC.J. Vitner Co. for an Order Directing an Assump-
tion or Rejeclion of an Executory Contract (Docket No. 520)
Objections Filed: None.
Related Items:
Agreed Order Continuing the Application
of C. J. Vitner Co. For an Order Directing
an Assumption or Rejection of an Execu-
tory Contract (Docket No. TBD); Agreed
Order Continuing the Application of C.J.
Vitner Co. For an Order Directing an As-
sumption or Rejection of an Executory
Contract (Docket No. 716).
A proposed agreed order will be submitted
for the Court's consideratton.
Contested Matters or Matters for Which the Objection Deadline Has Not
Expired
Motion to Compel Payment of Post-Petition Lease Obligations by
Spring Creek Lhnited Partnership (Docket No. 694)
Responses Filed: None.
Related Items:
Agreed Order Continuing the Motion to
Compel Payment of Post-Petition Lease
Obligations (Docket No. 715).
Status:
Objection deadline to expire on November
20, 2003. The Debtors anticipate that the
matter will be resolved consensually.
Motion for Order Pursuant to 11 U.S.C. § 1121(d) Extending the
Debtors' Exclusive Periods Within Which to File and Solicit
Acceptances of a Plan of Reorganization (Docket No. 749)
Objections Filed: None.
Related Items: None.
Status:
Objection deadline to expire on November
19, 2003. ~1 proposed order will be sub-
mitred for the Court's consideration.
Motion for Order Pursuant to 11 U.S.C. §§ 105(a} and 503 Au-
thorizing Payment Under the Stub Rent Procedures (Docket No.
75O)
Objections Filed: None.
Related Items: None.
Status:
Objection deadline to expire on November
19, 2003. ,4 proposed order will be sub-
mitred for the Court's consideration.
Dated: Chicago, Illinois
November 18, 2003
George N. Panagakis (AP, DC No. 06205271)
Ron E. Meisler (ARDC No. 06270262)
SKADDEN, ARPS, SLATE, MEAGHER
& FLOM (ILLINOIS)
333 West Wacker Drive, Suite 2100
Chicago, Illinois 60606-1285
(312) 407-0700
Attorneys for Debtors and
Debtors-in-Possession
IN T~ ~: UNITED STATES BANKRUPTCY COURT
FOR THE NORI'u ~:RN DISTRICT OF ILLINOIS
EASTERN DMSION
)
In re: )
)
EAGLE FOOD CENTERS, INC., )
et al.. )
)
Debtors. )
Case No. 03-15299 (PSI-l)
(Jointly Administered)
Chapter 11
Hon. Pamela S. Hollis
Hearing Date: November 21, 2003
Hearing Time: 10:00 a.n'L ~Central Time)
Obj. Deadline: November 19, 2003
NOTICE OF MOTION
' PLEASE TAKE NOTICE THAT, on November 21, 2003, we shall appear
before the Honorable Pamela S. Hollis, United States Bankn~tcy Judge, Everett McKinley
Dirksen Courthouse, 219 South Dearborn Shreet, Chicago, Illinois 60604, Courtroom 644,
and then and there present the Debtors' Motion for Order Parsuant to 11 U.S.C. §§ 10S(a)
and 503 Authorizing Payment Under the Stab Rent l~ocednres (the "Motion").
PLEASE TAKE FURTHER NOTICE THAT, in accordance with the Order
Pursuant to 11 U.S.C. §§ 102 and 10fi(a), Bankruptcy Rules 2002(m) and 9007, end Local
Rules, 101,400, end 402 Establishing Omnibus Hearing Dates end Certain Notice, Case
Menagement and Administrative Procedures,. dated April 7, 2003 (Docket No. 51) (the
"Case Management Order"), the deadline for filing end serving enobjection to the Motion is
· November 19, 2003. Any objection or other responsive pleading must be filed end scrod
in accordance with the Case Menagement Order and if such responding party intends to
introduce evidence or witnesses, it must identify with reasonable particularity end provide
appropriate notice of its proposed evidence and witnesses in accordance with the Case
Management Order, a copy of which can be retrieved at www.ilnb.useourts~ov or will be
provided upon' written request to the Debtors' counsel.
Dated: November 12, 2003
Eagle F .o9~. Centers¢Ipc. et al/' . ~
By: ~' ' /'~
Jo~ Wm. Bufl~, Jr. (~ No. 06209373)
~ge N. P~a~s (~ No. 0~1)
Ron Meisl~ (~ No. 06270262)
S~D~, ~S, SLA~,
~G~ & ~OM ~L~OIS)
333 West Wack~ ~, S~te 2100
C~a~, illinois 60~6-1285
(~2) ~7-07~
A~eys for ~e Debtom ~
Debtom-~-Po~sinn
IN TIlE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DMSION
)
Inre: )
)
EAGLE FOOD CENTERS, ]NC., )
)
)
Debtors. )
Case No. 03-15299 (PSH)
(Jointly Administered)
chapter 11
Hon. Pamela S. Holtis
Hearing Date: November 21, 2003
Hearing Time: 10:00 a.m. (Central Time)
Obj. Deadline:. November 19, 2003
MOTION FOR ORDER PURSUANT TO 11 U.S.C. §§ 10~a) and 503
AUTltORIZING PAYMENT UNDER THE STUB RENT PROCEDURES
Eagle Food Centers, Inc. ("Eagle Foods") and four of its subsidiaries
and affiliates (the "Affiliate Debtors"), the debtors and debtors-in-possession in the
above captioned eases (collectively, the "Debtors"), hereby move (the "Motion')~ this
Court for entry of an order, substantially in the form of the proposed order attached
hereto as Exhibit. A, pursuant to 11 U.S.C. §§ 105(a) and 503 approving procedures
under which the Debtors have authority to resolve and pay lease obligation claims
incurred from April 7, 2003 to April 30, 2003. In support of this Motion, the Debtors
respectfully rePresent as follows:
Pursuant to this Court's order entered on April 7, 2003 establishing~cm'tain
notice, ease management and administrative procedures in these cases, parties
are generally required to file and give notice of motions'and other pleadings
at least ten days prior to the omnibus hearing date at which such pleading is
tobe heard. As the ten day filing deadline for the November 21, g003
omnibus hearing fell on November 11, 2003 (/.e. Veterans Day), a lngal
holiday, the deadline to file this Motion is, pursuant to Federal Rule of
Bankruptcy Procedure 9006, November 12, 2003, nine days prior to the
omnibus hearing. The Debtors filed this Motion on November 12, 2003 and,
accordingly, extended the corresponding objection deadline by one day.
BACKGROUND
A. The Chapter 11 Filings
1. On April 7, 2003 (the "Petition Date"), each of the Debtors filed a
voluntary petition in this Court for reorganization relief under chapter 11 of tire 11
of the United States Code, 11 U.S.C. §8 101-1330 (as mended, the "Bankruptcy
Code"). Tl~e Debtors continue to operate their business and manage their properties
as debtors-in-possession pursuant to sections 1107(a) and 1108 of the Bankruptcy
Code. The Court has.entered an Order for joint ~ministration of these chapter 11
eases.
2. On April 15, 2003, the United States Trustee appointed an offi¢ia~
committee of unseeured creditors (the "Creditors' Committee") in these cases, No
trustee or examiner has been appointed.
3. The Court hasjurisdictiun over this matter pursuant to 28 U.S.C. 88
157 and 1334. Venue is proper pursuant to 28 U.S,C. 88 1408 and 1409. This
matter is a core proceeding pursuant to 28 U.S.C. 8 157(b)(2).
4. The statutoxy predicates for the relief requested herein are sections
105(a) and 503Co) of the Bankruptcy Code.
2
B. Current Business Operations of the Debtors
5. As of the Petition Date, Eagle Foods and four of its subsidiaries and
affiliates2 operated a regional supermarket chain consisting of 61 supermarkets in
northern and central Illinois and eastern Iowa, 60 of which operate under the trade
~ame "Eagle Country Market" and one which operates under the Wade name
"BOGO's." The Eagle Country Markets offer a full line ofgroceries, meats, ~esh
produce, dairy products, delicatessen and bakery products, health and beauty aids and
other general merchandise and, in certain stores, service seafood, prescription
medicine, video rental, floral service, in-store banks, dry-cleaners and coffee shops.
The BOGO's store offers a limited assortment of approximately 2,000 stock-keeping
units of groceries, produce, meat, health and beauty aids, and general merchandise.
6. The Debtors' corpom~ie headquarters and distribution center are
located in Milan, lllinois. The Debtors supplied approximately 75% oftheir stores'
inventory from the distribution center, with the stores'remaining inventory deY~vered
directly from vendors.
7. As of the Petition Date, the Debtors employed approximately 3,550
people, 43% of whom are employed on a full-time basis. Approximately 3,300 of
the Debtors' employees are unioni?.ed, represented by the United Food and
Eagle Foods also wholly owns Talon Insurance Company, Inc. ("Talon"); a
Vermont corporation, which was established as Eagle Foods' captive
insurance company. Talon is not a debtor in these eases.
Commercial Workers ("UFCW") and the International BrotherhoOd of Teamsters
("IBT') pursuant to 15 collective bargaining agreements (collectively, the "Collective
Bargaining Agreements")with seven separate local unions of the UFCW and IBT.
C. Events Leading to the Chapter 11 Filings
8. Eagle Foods merged fi:om chapter 11 approximately 3 years ago,
following the completion of a largely pm-negotiated financial restructuring. As a
result of that restructuring, Eagle Foods' capital structure was comprised Of (i) a $50
million revOlving credit facility (the "Prepetition Facility") with Co~ess Financial
Corporation (Central) ("Congress"), of which approximately $26 milli°n is
outsta~rtlng as of the Petition Date, (ii) a $85,000,000. bond issue of 11% Senior
Notes that are due April 15, 2005 (the "Senior Notes"), of which approximately $64
million in principal is still outstanding and (iii) 3.1 million shares of common stock,
outsta~dlng as of February, 2003.
9. Since its initial restructuring efforts, Eagle Foods faced new threats
from increased competition, rising costs in connection with. its unionized labor;
significant cash outlays to cover interest expense from its outstanding Senior Notes,
and recessionary economy. As a result, Eagle Foods' overall cost of doing business
increased and the company faced a liquidity crisis.
I0. In addition, due to adverse conditiOns, during the third fiscal quarter
of 2002; Eagle Foods became concerned that it may violate a covenant, under its
Prepetifion Facility. In particular, the Prepetition Facility contains a financial
4
covenant requiring Eagle Foods to maintain an "Adjusted Net Worth" (as defined in
the Prepetition Facility) of $3.0 million. As a precaution, Eagle Foods and Congress
entered into a limited waiver agreement, effective as oft~lovember 1, 2002; which
waived the Adjusted Net Worth covenant until February 1, 2003, which was
subsequently extended to April 5, 2003 (the "Waiver"). Moreover, the Debtors'
Senior Notes require an interest payment of approximately $3.5 roillion on April. 15,
2003. Accordingly, the liquidity crisis combined with the expiration of the Waiver,
the Debtors' onerous cost s~a'ucture, and the slow economic climate forced Eagle
Foods to file for chapter 11 protection.
1 I. Since the Petition Date, the Debtors with the assistance of their
financial advisors, have evaluated their strategic alternatives and with the approval of
the creditors' Committee, embarked on a sale process. As a result of this decision,
on June 27, 2003 the Court entered the Order Under 11 U.S.C. §§ 105(a) and Fed. R.
BankT. P. 2002, 6004, 6006 and 9014 Approving (A) Bidding Procedures, (B) the
Granting of Certain Bid Protections, (C) the Form of AsSet' Purchase Agreement and
Lease T~mdnation Agreement, (D) the Form and Mariner of Notice of(i) the Sale of
Certain Assets, and (ii) the Assumption and Assignment of Certain Executory
Contracts and Unexpired Leases and (E) the Settin~ of a Sale Hearing (Docket No.
330) (the "Procedures Order") setting forth procedures pursuant to which the Debtors
were authorized to market and ultimately sell their stores.
12. Tbereafter, the Debtors have worked with their financial advisors to
achieve the highest possible value for their assets. As a ~esult of these efforts, the
Debtors have received numerous purchase agreements offering to buy many of their
stores. To date, the Bankruptcy Court has entered orders approving the sale of thirty
of the Debtors' stores to thirteen bidders. The Debtors are currently negotiating with
bidders inan attempt to sell the remaining stores. In addition, the Debtors have
recently ceased operations at their remaining grocery stores and are currently
focusing on completing their wind-down, reconciling claims and formulating a
chapter 11 plan.
RELIEF REQUESTED
13. By this Motion, the Debtors seek entry of an order approving the
proposed Stub Rent Procedures (as defined below) which will facilitate the resolution
of claims by landlords for unpaid lease obligations arising during tbe dates April 7,
2003 to April 30, 2003 (the "Stub Period").
BASIS FOR RELIEF
14. Prior to the Petition Date, the Debtors were parties to over fifty leases
of nonresidential real property (the "Leases"): These Leases require rent to be paid in
advance during the first week of each month. Certain April, 2003 rent payments with
respect to theses Leases were not paid before the Petition Date, and the pro rata
amount of certain oftbe Debtors' April, 2003 Lease obligations that accrued and
were payable as of April 30, 2003 (the "Stub Rent") remain unpaid.
15. During the course of these cases, certain landlords have sought
payment of Stub Rent? At this point in the Debtors' cases, the Debtors are prepared
to begin the process of reconciling claims for Stub Rent with respect tothe Leases
that were either rejected or that are still pending the Debtors' determination to assume
or reject. Following the lead of Judge Wedoffin the chapter 11 proceedings of UAL
Corporation, et al (the "United Cases"), the Debtors are willing to treat claims-for
Stub Rent as administrative clalms. See In re UAL Corp., 291 B.R. 121 (Bankr. N.D:
Ill. 2003). In order m process these claims, the Debtors request the authority to pay
Stub Rent in accordance with the procedures (the "Stub Rent Precedures'D set forth
below,n The Debtors Will initiate.the Stub Rent Procedures for a particular Lease no
later than thirty days-folloWing the rejection or assumption and assi~,nment of a Lease
or, with respect to Leases that have already been rejected or assigned, no later than
thirty days after an order granting the relief sought by this MotiOn is entered by the
Court.
While most landlords requested payment of Stub Rent on an informal basis,
the motion of Spring Creek Limited Partnership, flied October 2, 2003
(Docket No. 694), which Seeks an order requiring the Debtors tO pay Stub
Rent, is currently pending before the Court.
Because of the size of the United Cases, the procedures established for the
payment of stub rent in the United Cases are highly complicated and not
appropriate for the facts and circumstances at hand. While the Stub Rent
Procedures proposed herein are similar in spirit, they are more streamlined
and less complex than those used in the United Cases;
16. In particular, the Debtom propose sending a notice (the "Notice") to
each current and former landlord that is owed Stub Rent. The Notice will include the
amount that the Debtors believe is due and owing as an administrative expense (the
"Proposed Payment") to each such landlord on account of unpaid Stub'Rent. Tothe
extent that no Objectien (as defined below) is made to a Proposed Payment, the
Proposed Payment will be paid as an administrative expense to the relevant landlord'
no later than thirty days following the exp'n-atiun of the Objection Deadline (as
defined below) in full satisfaction of the landlord's Stub Rent claim and such
landlord will be forever barred and estopped from asserting any other m- ~ther claim
for Stub Rent.
17.
To the extent that a landlord disagrees with the Proposed Payment,
such landlord must object (an "ObjectionS) in writing and serve such Objection upon'
the Debtors and their undersigned counsel no later than thirty days following the date
that the DebtorS served such landlord with a Notice (the "Objection Deadline").
Each Objection shall include a landlord's own proposed amount for its claim for Stub
Rent (a "Counter Proposal"), along with proper documentation of such landlord's
books and records, the relevant sections of the Lease, and/or other documents and
materials that substantiate the landlord's Counter Proposal.
18. If an Objection is timely served, the Debtors will work with the
objecting landlord to reach a cousensual resolution of the Objection. In furtherance
of these efforts, given that monthly rent with regard to most Leases is generally less
8
than $30,000 and, accordingly, the Stub Rent for each Lease is proportionately less,
the Debtors request the authority to settle Objections with objecting landlords
without further Court approval, but subject to certain notice procedures with respect
to the Creditors' Committee and the United States Trustee. In particular, to the extent
that the Debtors and an objecting landlord settle an Objection (a "Settlement") and
agree upon a dollar mount to be paid on account of such objecting landlord's Stub
Rent claim, the Debtors propose sending notice of such Settlement (a "Settlement
Notice"), ~hich shall include the relevant terms of the Settlement, to counsel to the
Creditors' Committee and the United States Trustee. The Settlement Notice shall be
served by facsimile or electronic mall, so as to be received by 5:00 p.m. (Central
Time) on the date of service.
19. The Creditors' Committee and the United States Trustee shall each
have five days after the Settlement Notice is sent to object to or request additional
time to evaluate the proposed Settlement. If counsel to the Debtors does not receive
a written objection or written request for additional time prior to the expiration of
Such five-day period, the Debtors shall be authorized to consummate the proposed
Settlement, and any mount that the Debtors agree.to payto a Landlord pursuant to a
Settlement will paid no later than thirty days after'the expiration of such five-day
period.
20. If a consensual resolution cannot be reached between the Debtors and
an objecting Landlord, the Debtors shall schedule a hearing on the Objection with the
9
Court and provide notice of the hearing to such landlord? Any payment received by
an objecting landlord following the resolution of such landlord's Objection shall be in
full satisfaction of the landlord's Stub Rent claim and such landlord will be forever
barred and estopped fi:om asserting any other or further claim for Stub Rent.
21. The Debtors submit that these Stub Rent Procedures will allow for an
efficient resolution of Stub Rent claims.
22. No previous request for the relief sought herein has been made to this
Court or any other court.
In the event that numerous disputes arise, the Debtors may file a subsequent
pleading seeking to institute more comprehensive procedures similar to those
established in the United Cases for purposes of dealing with claims for stub
rent. See "Order Approving and Authorizing Payment Under the Agreed-
Upon Stub Rent Procedures" entered by Judge Wedoff on August 29, 2003
(Docket No. 3834 in the United Cases, Case No. 02-48191).
10
WHEREFORE, the Debtors respectfully request that the Court (i)
enter an order substantially in the form attached hereto as Exhibit A authorizing the
Debtors to pay Stub Rent claims in accordance with the Stub Rent Procedures and
(ii) grant such other and further relief as the Court may.deem just and proper.
Dated: Chicago, Illinois
November 12, 2003
Respectfifl_ly Subrm'tted, ~,
John Wm. Butler, Jr. (iMRDC No. 06209373)
George N. Panagakis (ARDC No. 06205271)
Ron E. Meisler (AP, DC No. 06270262)
SKADDEN, AR.PS, SLATE, MEAGHER
& FLOM (ILLINOIS)
333 West Wacker Drive, Suite 2100
Chicago, Illinois 60606-1285
(312) 407-0700
Attorneys for Debtors and
Debtors-in-Possession
421 g34-Chicago S2A 1 ]
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DMSION
EXHIBIT A
)
In re: )
)
EAGLE FOOD CENTERS, INC., )
et )
)
Debtors. )
Case No. 03-15299 (PSH)
(Jointly Administered)
Chapter 11
Hon. Pamela S. Hollis
ORDER PURSUANT TO 11 U.S.C. §§ 105(a) and'503 AUTHORIZING
PAYMENT UNDER T~ STUB RENT PROCEDURES
This matter having come before the Court on the Motiont (the "Motion")
of the above-captioned, debtors and debtors-in-possession (the "Debtors") for Order
Pursuant to 11 U.S.C. §§ 105(a) and 503 Authorizing Payment Under the Stub Rent
Procedures; the Court having reviewed the Motion; and it appearing that notice of the
Motion was good and Sufficient under the particular circumstances and that no other or
further notice need be given; and it appearing that the relief requested in the Motion is in
the best interests of the Debtors, their estates and creditors and other parties in interest;
and upon the record of the Hearing; and after due deliberation thereon; and good cause
appearing therefor, it is hereby
ORDERED, ADJUDGED AND DECREED THAT:
Capitalized t¢lms used but not otherwise defined herein shall have the meaning
ascribed to them in the Motion.
EXHIBIT A
I. The Motion is GRANTED.
2. The Debtors are authorized to pay claims for Stub Rent as administra-
tive expenses in accordance with the Stub Rent ProCedures.
3. The Debtors shall initiate the Stub Rent Procedures for a particular
Lease no later than thirty days following the rejection or assumption and assignment ora
Lease or, with respect to Leases that have already been rejected or assigned, no later than.
thirty days following entry of this Order.
4. The following Stub Rent Procedures are hereby approved:
(a) The Debtors shall send a Notice to each landlord that has a claim
for Stub Rent.
Stub Rent claim.
(b) The Notice shall include the Debtors' Proposed Payment for each
(c) Landlords that do not serve an Objection to a Proposed Payment
on or prior to the Objection Deadline shall be paid an mount equal to the Proposed
Payment as an administrative expense. Such payment will be made no later than thirty
days following the eXpiration of the Objection Deadline and such landlord will be forever
barred and estopped from asserting any other or further claim for Stub Rent.
(d) Any landlord.that disagrees with a Proposed Payment must
object in writing and serve such Objection upon the Debtors and their counsel so as to be
received by the Objection Deadline.
EXItlBIT A
(e) An Objection shall include a landlord's Counter Proposal, along
with proper documentation of such landlord's books and records, the relevant sections of
the Lease, and/or other documents and materials that substantiate the landlord's Counter
Proposal.
(f) The Debtors, subject to certain notice procedures with respect to
the Creditors' Committee and the United States Trustee as set forth below, have the
authority to settle Objections without further Court approval.
(g) To the extent that the Debtors and an objecting landlord reach a
Settlement, the Debtors shall send a Settlement Notice to counsel to the Creditors'
Committee and the United States Trustee by facsimile or electronic mail so as to be
m-ceived by 5:00 p.m. (Central Time) on the date of servico.
(la) The Creditors' Committee and the United States Trustee each
shall have five days after the Settlement Notice is sent to object to or request additional
time'to evaluate the proposed Settlement.
(i) If coUnSel to the Debtors does not receive awritten objecti°n or
written request for additional time prior to the expiration of such five-day period, the
Debtors are hereby'authorized to consummate the proposed Settlement, and any amount
that'the Debtors agree to payto a Landlord pursuant to a Settlement shall paid not later
than thirty days after the expiration of such five-day period.
EXItIBIT A
(j) To the extent that the Debtors and an objecting landlord are not
able to consensually reSOlve an Objection, the Debtors shall schedule a hearing on the
ObjeCtion with the Court and provide notice of the hearing to the objecting landlord.
(k) Any payment received by an objecting landlord following the
resolution of such landlord's ObjeCtion shall be in full satisfaction of.the landlord's Stub
Rent claim and such landlord will be forever barred and estopped from asserting any
other or further claim for Stub Rent.
5. The Debtors and their respective officers, employees and agents, are
authorized to take actions necessary, and issue, execute and deliver documents that are
required or appropriate to implement and effeCtuate the resolution of any claim for Stub
Rent otto reach a Settlement in accordance with the terms of this Order.
Dated: Chicago, Illinois
,2003
UNITED STATES BANKRUPTCY JUDGE
379293~?hlca~