Case KG Doc 426 Filed 10/14/15 Page 1 of 13 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

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1 Case KG Doc 426 Filed 10/14/15 Page 1 of 13 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: Chapter 11 HAGGEN HOLDINGS, LLC, et al., 1 Case No (KG Debtors. (Jointly Administered Requested Hearing Date: October 29, 2015 at 10:00 a.m. (ET Requested Objection Deadline: October 26, 2015 at 4:00 p.m. (ET DEBTORS MOTION FOR ENTRY OF AN ORDER, PURSUANT TO SECTIONS 105(a, 363(b AND 503(b OF THE BANKRUPTCY CODE AND BANKRUPTCY RULE 9019, APPROVING CRITICAL VENDOR TRADE ARRANGEMENT BY AND AMONG THE DEBTORS AND UNIFIED GROCERS, INC. Haggen Holdings, LLC and its above-captioned affiliated debtors and debtors in possession (each a Debtor, and collectively, the Debtors hereby submit this motion (this Motion for the entry of an order, substantially in the form attached hereto as Exhibit A (the Proposed Order, pursuant to sections 105(a, 363(b and 503(b of title 11 of the United States Code, 11 U.S.C. 101 et seq. (the Bankruptcy Code, and Rule 9019 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules, approving that certain critical vendor trade arrangement (the Trade Arrangement, dated October 6, 2015, by and among the Debtors and Unified Grocers, Inc. ( Unified Grocers, and together with the Debtors, the Parties, a copy of which is attached hereto as Exhibit B. In support of this Motion, the Debtors respectfully state as follows: 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, are: Haggen Holdings, LLC (7558, Haggen Operations Holdings, LLC (6341, Haggen Opco South, LLC (7257, Haggen Opco North, LLC (5028, Haggen Acquisition, LLC (7687, and Haggen, Inc. (4583. The mailing address for each of the Debtors is 2211 Rimland Drive, Bellingham, WA

2 Case KG Doc 426 Filed 10/14/15 Page 2 of 13 JURISDICTION AND VENUE 1. The Court has jurisdiction over this matter pursuant to 28 U.S.C. 157 and 1334, and the Amended Standing Order of Reference from the United States District Court for the District of Delaware, dated as of February 29, 2012 (the Amended Standing Order. This is a core proceeding pursuant to 28 U.S.C. 157(b(2, and the Court may enter a final order consistent with Article III of the United States Constitution. Venue is proper in this Court pursuant to 28 U.S.C and The statutory and legal predicates for the relief requested herein are sections 105(a, 363(b and 503(b of the Bankruptcy Code and Bankruptcy Rule BACKGROUND A. General Background 2. On September 8, 2015 (the Petition Date, the Debtors filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code (the Cases. The Debtors are operating their businesses and managing their properties as debtors-in-possession pursuant to sections 1107(a and 1108 of the Bankruptcy Code. These Cases are being jointly administered for procedural purposes pursuant to Bankruptcy Rule 1015(b. No request for the appointment of a trustee or examiner has been made in these Cases. 3. On September 17, 2015, the Office of the United States Trustee for the District of Delaware (the U.S. Trustee appointed the Consumer Privacy Ombudsman in these Cases pursuant to section 332 of the Bankruptcy Code. On September 21, 2015, the U.S. Trustee appointed the Official Committee of Unsecured Creditors (the Committee in these Cases pursuant to section 1102 of the Bankruptcy Code. 4. On September 9, 2015, the Debtors filed the Debtors Motion (1 For Entry of Interim and Final Orders, Pursuant to Sections 105(a, 363(b, 503(b, 1107(a and 1108 of the 2

3 Case KG Doc 426 Filed 10/14/15 Page 3 of 13 Bankruptcy Code, (I Authorizing the Debtors to Pay Certain Prepetition Claims (A Arising Under the Perishable Agricultural Commodities Act and the Packers and Stockyards Act of 1921, (B Of Lien Vendors, and (C Of Critical Vendors and Service Providers, (II Authorizing Banks to Honor and Process Check and Electronic Transfer Requests Related Thereto, and (III Granting Certain Related Relief, and (2 For Entry of a Final Order, Pursuant to Sections 105(a and 503(b(9 of the Bankruptcy Code, Establishing Exclusive Procedures for the Assertion, Resolution, Allowance and Satisfaction of Claims Arising Under Section 503(b(9 of the Bankruptcy Code [Docket No. 11] (the Critical Vendor Motion. 5. On September 10, 2015, the Court entered an interim order [Docket No. 49] (the Interim Order authorizing, but not directing, the Debtors to pay, honor or otherwise satisfy critical vendor claims in the ordinary course up to an aggregate amount of $15,000,000, and authorizing the Debtors to enter into trade agreements with vendors. 6. On October 5, 2015, the Court entered a second interim order [Docket No. 276] (the Second Interim Order with respect to the Critical Vendor Motion. 7. On October 13, 2015, the Court entered a final order [Docket No. 387] (the Final Order, and together with the Interim Order and the Second Interim Order, the Vendor Orders authorizing, but not directing, the Debtors to pay, honor or otherwise satisfy critical vendor claims in the ordinary course of business up to an aggregate amount of $25,000, The relief requested herein is consistent with the Vendor Orders. 9. Additional information about the Debtors business and the events leading up to the Petition Date can be found in the Declaration of Blake Barnett in Support of Debtors Chapter 11 Petitions and First-Day Motions [Docket No. 15], which is incorporated herein by reference. 3

4 Case KG Doc 426 Filed 10/14/15 Page 4 of 13 B. Relevant Background 10. Prior to the Petition Date, Unified Grocers supplied the Debtors with certain merchandise, food products, non-food items, and services pursuant to (a that certain Supply Agreement, dated as of December 18, 2014 (as amended, supplemented or otherwise modified, the Supply Agreement between Unified Grocers and certain of the Debtors, (b that certain Amended and Restated Specialty Supply Agreement, dated as of December 18, 2014, as amended, supplemented or otherwise modified, (the Specialty Agreement between Unified Grocers (as successor to Market Centre, Inc. and certain of the Debtors, and (c certain auxiliary agreements (together with the Supply Agreement and the Specialty Agreement, the Agreements. Unified Grocers served as the Debtors primary supplier in California, Arizona and Nevada and served as a substantial supplier in Washington and Oregon. 11. On September 8, 2015, Unified Grocers terminated the Agreements. In addition, on October 2, 2015, Unified Grocers filed a limited objection to the Debtors Critical Vendor Motion [Docket No. 256]. Moreover, Unified Grocers is listed as one of the Debtors top thirty largest unsecured creditors in these Cases with a potential claim of approximately $14.8 million Unified Grocers is the largest retailer-owned wholesale grocery cooperative in the western United States. Through membership in the cooperative, retailers are able to leverage their purchasing power with suppliers, employ store-level programs and systems at an affordable cost and compete on a level playing field with larger grocery retailers. Through Unified Grocers, the Debtors have historically obtained goods and services from numerous third party suppliers, and have utilized their membership in Unified Grocers to obtain advantageous pricing and cost reductions from having a consolidated source of supply for various products sold in their stores. 2 Unified Grocers is also a member of the Committee. 4

5 Case KG Doc 426 Filed 10/14/15 Page 5 of 13 The Debtors deem their continued participation in the Unified Grocers cooperative to be critical to their business operations and maximizing value for all parties in interest in these Cases. 13. Accordingly, in the interest of preserving estate assets, and paving the way towards an efficient resolution of these Cases, the Debtors and Unified Grocers engaged in extensive good faith negotiations regarding: (a the Agreements, (b claims of Unified Grocers against the Debtors estates, and (c appropriate terms for a continued post-petition business relationship. Through the course of these settlement discussions, the Debtors determined it would be in the best interests of their estates and creditors to continue their relationship with Unified Grocers, pursuant to the terms of the Trade Arrangement, and subject to the approval of the Court. As a result, the Parties have reached a resolution that is embodied in the Trade Arrangement presented for the Court s approval through this Motion. 14. A summary of the key terms of the Trade Arrangement is as follows: 3 (a (b Pacific Southwest Stores: The Debtors agree to source all perishable items from items that Unified Grocers carries for other retailers, except as mutually agreed. Unified Grocers agrees that its prior rates shall apply to all categories, with a minor surcharge. The Debtors shall pay Unified Grocers a weekly flat fee, however, the fee shall no longer be payable when shipments to the Pacific Southwest Stores cease. Pacific Northwest Stores: Unified Grocers agrees that its prior rates shall apply to seventeen (17 of the Debtors core stores ( Core Stores. The Debtors agree that Unified Grocers shall continue as the primary supplier for the Core Stores in a manner that is consistent with prior purchases throughout the pendency of these Cases. The Debtors shall retain the right to transition to another supplier for the Core Stores upon forty-five (45 days notice to Unified Grocers. Unified Grocers shall then have the right to terminate shipping upon twenty-one (21 days notice to the Debtors. To the extent commercially reasonable and consistent with the Debtors fiduciary duties, the Debtors will provide Unified Grocers with the opportunity to bid on any supply arrangements for the Core Stores. 3 The summary of the Trade Arrangement provided is not intended to be a comprehensive recitation of all of the terms of the Trade Arrangement. The summary is qualified in its entirety by the actual terms of the Trade Arrangement, and to the extent that there is any inconsistency between the summary provided herein and the actual terms of the Trade Arrangement, the actual terms of the Trade Arrangement shall control. 5

6 Case KG Doc 426 Filed 10/14/15 Page 6 of 13 (c (d (e (f (g Additional Requirements: The Debtors agree that any remaining prepetition funds held by Unified Grocers shall be applied to the prepetition claims held by Unified Grocers, in Unified Grocers discretion. The Parties agree that on or before the date of the Final Order, Unified Grocers shall provide the Debtors with a roll-forward shipping summary statement from August 3, 2015 and such summary shall reflect payment application between Debtors Haggen Inc., Haggen Opco North, LLC and Haggen Opco South, LLC. Deposit. The Debtors have provided Unified Grocers with a deposit for perishable items and the Debtors shall pay for deliveries of such items in the ordinary course. Unified Grocers and the Debtors agree to reduce or increase said deposit upon the closing of stores or changes in purchases. Unified Grocers shall return to the Debtors all amounts on deposit at such time that purchases of perishable items cease. Avoidance Actions. The Debtors agree not to pursue any and all potential claims or causes of action arising under sections 547 and 550 of the Bankruptcy Code against Unified Grocers. Critical Vendor Payments. The Debtors shall make payments to Unified Grocers pursuant to its interim authority to pay critical vendors (i upon execution of the Trade Arrangement (the Interim Critical Trade Payment, and (ii an additional critical vendor payment to Unified Grocers within five (5 business days of the date the Final Order is entered. 4 Upon Unified Grocers receipt of the Interim Critical Trade Payment, Unified Grocers shall deliver goods to the Debtors under the following payment terms: (a the Debtors shall pay Unified Grocers by 1:00 p.m. (Pacific Time on the second day after picking of inventory commences, except when picking commences on Thursday and Friday, in which case the Debtors shall pay Unified Grocers on Monday; and (b the Debtors shall pay Unified Grocers a weekend advance by 1:00 p.m. (Pacific Time every Friday in advance of weekend deliveries (the Weekend Advance. Provided that the Debtors comply with the terms of the Trade Arrangement, Unified Grocers shall reverse the Weekend Advance on Monday. Allowed Section 503(b(9 Claim. The Debtors shall agree to an allowed Unified Grocers administrative expense claim under section 503(b(9 of the Bankruptcy Code for the balance of Unified Grocers prepetition claim for goods shipped to the Debtors for which Unified Grocers has not received payment. The Parties shall use commercially reasonable efforts to determine the amount of the section 503(b(9 claims within five (5 days of the execution of the Trade Arrangement. Unified Grocers will be 4 These critical vendor payments to Unified Grocers are being made pursuant to and in accordance with the procedures set forth in the Vendor Orders. 6

7 Case KG Doc 426 Filed 10/14/15 Page 7 of 13 exempted from any section 503(b(9 procedures approved in these Cases. 5 RELIEF REQUESTED 15. By this Motion, the Debtors request that the Court enter the Proposed Order, approving the Trade Arrangement pursuant to sections 105(a, 363(b and 503(b of the Bankruptcy Code and Bankruptcy Rule BASIS FOR RELIEF I. The Trade Arrangement Should be Approved Pursuant to Bankruptcy Rule 9019(a 16. Bankruptcy Rule 9019, which governs the approval of compromises and settlements by a debtor, provides that, [o]n motion by the trustee and after notice and a hearing, the court may approve a compromise or settlement. FED. R. BANKR. P Further, section 105(a of the Bankruptcy Code provides that [t]he court 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. 17. A starting point in analyzing any proposed settlement is the general policy of encouraging settlements and favoring compromises. See Myers v. Martin (In re Martin, 91 F.3d 389, 394 (3d Cir To approve a settlement, a bankruptcy court must determine that such settlement is in the best interest of a debtor s estate. Law Debenture Trust Co. of New York v. Kaiser Aluminum Corp. (In re Kaiser Aluminum Corp., 339 B.R. 91, (D. Del In addition, a court must: assess and balance the value of the claim that is being compromised against the value to the estate of the acceptance of the compromise proposal in light of four factors: (1 the probability of success in the litigation, (2 the likely difficulties in collection, (3 the complexity of 5 Paragraph 12 of the Final Order provides that the 503(b(9 Procedures (as defined therein shall not apply to Unified Grocers. 7

8 Case KG Doc 426 Filed 10/14/15 Page 8 of 13 the litigation involved, and the expense, inconvenience and delay necessarily attending it, and (4 the paramount interests of the creditors. Id. at 96 (quoting Martin, 91 F.3d at 393. The United States District Court for the District of Delaware has explained that a court s ultimate inquiry is whether a settlement is fair, reasonable, and in the best interest of a debtor s estate. In re Marvel Entm t Grp., Inc., 222 B.R. 243, 249 (D. Del (quoting In re Louise s, Inc., 211 B.R. 798, 801 (D. Del The decision to approve a particular settlement lies within the sound discretion of the bankruptcy court. In re World Health Alts., Inc., 344 B.R. 291, 296 (Bankr. D. Del A court need not decide the numerous issues of law and fact raised by the settlement and it need not be convinced that the proposed settlement is the best possible, rather [t]he court need only conclude that the settlement falls within the reasonable range of litigation possibilities somewhere above the lowest point in the range of reasonableness. In re Nutritional Sourcing Corp., 398 B.R. 816, 833 (Bankr. D. Del (quoting In re Coram Healthcare Corp., 315 B.R. 321, 330 (Bankr. D. Del In the Debtors business judgment, the resolution embodied in the Trade Arrangement is reasonable and in the best interest of the Debtors, their estates and creditors and other parties in interest. The proposed settlement provides for a fair and practical resolution of the issues raised by Unified Grocers, which, if litigated, would consume the Debtors limited resources and would delay these Cases. The Trade Arrangement was the product of significant and lengthy discussions and negotiations between the Parties, culminating in a settlement that falls well within the range of reasonable litigation outcomes as to each of the issues encompassed by the Trade Arrangement. In addition, as discussed below, several of the applicable Martin factors weigh in favor of approving the Trade Arrangement. 8

9 Case KG Doc 426 Filed 10/14/15 Page 9 of 13 A. The Probability of Success in Litigation 20. Had the Parties failed to reach a consensual resolution, the Debtors might have been forced to litigate with Unified Grocers, at significant cost and risk to the Debtors and their estates. By contrast, the terms of the Trade Arrangement provide certainty with respect to the nature of Unified Grocers claims and the continued supply of merchandise to the Debtors from Unified Grocers, which has no contractual obligation to do so. The Debtors have carefully reviewed their books and records and information provided by Unified Grocers, and believe that the allowance of a section 503(b(9 claim for the balance of Unified Grocers prepetition claim for goods shipped to the Debtors for which Unified Grocers has not received payment is appropriate under the circumstances, and that resort to the 503(b(9 Procedures is not necessary in this instance. Moreover, the Debtors have carefully reviewed their prepetition transactions with and payments to Unified Grocers, and have concluded that a release of claims under sections 547 and 550 of the Bankruptcy Code is appropriate under the circumstances, given the potential amount of such claims and potential defenses thereto. 21. In light of the foregoing, the first Martin factor weighs significantly in favor of approving the Trade Arrangement. B. The Complexity of the Litigation Involved, and the Expense, Inconvenience and Delay Necessarily Attending It 22. Litigation to resolve the issues between the Parties will necessarily be complex and involve extensive discovery and litigation. Such complicated litigation and uncertainty would be at a tremendous expense to the Debtors estates and creditors, both in terms of cost of the litigation itself, and in terms of the cost of continuing the Cases and the delay and uncertainty in resolving Unified Grocers section 503(b(9 administrative expense claims. Accordingly, the third Martin factor weighs in favor of approving the Trade Arrangement. 9

10 Case KG Doc 426 Filed 10/14/15 Page 10 of 13 C. The Paramount Interest of Creditors 23. Here, the paramount interest of creditors will be best served by approving the Trade Arrangement and efficiently moving these Cases forward. Approval of the Trade Arrangement will avoid potentially costly and time-consuming litigation with Unified Grocers with regards to its section 503(b(9 administrative expense claim and any preference claims of the Debtors estates, the outcome of which would be uncertain, while ensuring that Unified Grocers continues to act as a vendor during this critical time in the Debtors operations and these Cases. 24. Accordingly, the Court s approval of the Trade Arrangement is in the best interests of the Debtors, their creditors and estates, and, for the reasons set forth above, the fourth Martin factor weighs in favor of approving the Trade Arrangement. II. The Debtors Should Be Authorized to Make the Trade Arrangement Payments Pursuant to Sections 105(a and 363(b of the Bankruptcy Code 25. Section 363(b(1 of the Bankruptcy Code provides, in relevant part, 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 of the Bankruptcy Code does not set forth a standard for determining when it is appropriate for a court to authorize the debtor s use of estate property, courts in this Circuit and others, in applying this section, have required that decisions regarding the disposition of assets outside the ordinary course of business be based upon the debtor s sound business judgment and a finding of good faith. See In re Abbotts Dairies of Pennsylvania, Inc., 788 F.2d 143, (3d Cir (requiring a finding of good faith to approve a sale under section 363(b; Meyers v. Martin (In re Martin, 91 F.3d 389, 395 (3d Cir (noting that under normal circumstances, courts defer to a trustee s judgment concerning use of property 10

11 Case KG Doc 426 Filed 10/14/15 Page 11 of 13 under section 363(b when there is a legitimate business justification; Dai-Ichi Kangyo Bank, Ltd. v. Montgomery Ward Holding Corp. (In re Montgomery Ward Holding Corp., 242 B.R. 147, 153 (D. Del ( In determining whether to authorize the use, sale or lease of property under [section 363(b], courts require the debtor to show that a sound business purpose justifies such actions. ; In re Delaware & Hudson Ry. Co., 124 B.R. 169, 176 (D. Del (examining the history of the standard required for a pre- confirmation sale of assets under section 363(b and opining that the Third Circuit has implicitly abandoned the emergency test under earlier precedent and has adopted the sound business judgment test as utilized by other courts. 27. As previously noted, section 105(a of the Bankruptcy Code provides that [t]he court 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. 28. As set forth more fully above, through the Trade Arrangement, the Debtors, their estates and creditors will obtain certainty with respect to the nature of Unified Grocers claims. Furthermore, the Trade Arrangement was the product of significant and lengthy discussions and negotiations between the Parties, culminating in a settlement that falls well within the range of reasonable litigation outcomes as to each of the issues encompassed by the Trade Arrangement. Moreover, the payments provided for in the Trade Arrangement reflect a sound exercise of the Debtors business judgment, are consistent with the Final Order, and will facilitate the Debtors daily operations and their efforts to successfully prosecute these Cases. 29. Accordingly, the Debtors submit that the payments required by the Trade Arrangement should be authorized and approved by the Court pursuant to sections 105(a and 363(b of the Bankruptcy Code. 11

12 Case KG Doc 426 Filed 10/14/15 Page 12 of 13 CONCLUSION 30. A review of the relevant Martin factors, to the extent they are applicable, clearly demonstrates that approval of the Trade Arrangement is in the best interests of the Debtors, their estates and creditors, as well as other parties in interest in these Cases. The compromise embodied in the Trade Arrangement is the product of extensive and good faith arm s length negotiations between the Parties. The Trade Arrangement provides for a fair and practical resolution of the various issues between the Parties and, if approved, will be another significant step towards the Debtors expeditious and successful prosecution of these Cases. 31. For these reasons, in addition to the reasons set forth in the Critical Vendor Motion as it pertains to the importance of the Debtors maintaining a continued and uninterrupted supply of necessary goods from vendors such as Unified Grocers, the Debtors submit that the Trade Arrangement (a is fair, equitable and in the best interests of the Debtors, their estates and creditors and other parties in interest in these Cases; (b represents an exercise of the Debtors sound business judgment; and (c should be approved pursuant to sections 105(a, 363(b and 503(b of the Bankruptcy Code and Bankruptcy Rule NOTICE 32. Notice of this Motion has been provided to the following parties: (i the U.S. Trustee; (ii proposed counsel to the Committee; (iii counsel to the Debtors pre-petition and post-petition lenders; (iv counsel to Unified Grocers; and (v all parties that, as of the filing of this Motion, have requested notice in these Cases pursuant to Bankruptcy Rule The Debtors submit that, in light of the nature of the relief requested, no other or further notice need be given. 12

13 Case KG Doc 426 Filed 10/14/15 Page 13 of 13 NO PRIOR REQUEST 33. Except with respect to the critical vendor payments contemplated in the Trade Arrangement, the Debtors have not previously sought the relief requested herein from this or any other Court. WHEREFORE, the Debtors request entry of the Proposed Order, granting the relief requested herein, and such other and further relief to the Debtors as is just and proper. Dated: October 14, 2015 Wilmington, Delaware YOUNG CONAWAY STARGATT & TAYLOR, LLP /s/ Robert F. Poppiti, Jr. Matthew B. Lunn (No Robert F. Poppiti, Jr. (No Rodney Square 1000 N. King Street Wilmington, Delaware Telephone: ( Facsimile: ( and- STROOCK & STROOCK & LAVAN LLP Frank A. Merola (admitted pro hac vice Sayan Bhattacharyya (admitted pro hac vice Elizabeth Taveras (admitted pro hac vice 180 Maiden Lane New York, New York Telephone: ( Facsimile: ( Proposed Counsel to the Debtors and Debtors-in-Possession 13

14 Case KG Doc Filed 10/14/15 Page 1 of 2 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: Chapter 11 HAGGEN HOLDINGS, LLC, et al., 1 Case No (KG Debtors. (Jointly Administered NOTICE OF MOTION Requested Hearing Date: October 29, 2015 at 10:00 a.m. (ET Requested Objection Deadline: October 26, 2015 at 4:00 p.m. (ET TO: (I THE U.S. TRUSTEE; (II PROPOSED COUNSEL TO THE COMMITTEE; (III COUNSEL TO THE DEBTORS PRE-PETITION AND POST-PETITION LENDERS; (IV COUNSEL TO UNIFIED GROCERS; AND (V ALL PARTIES THAT, AS OF THE FILING OF THIS NOTICE, HAVE REQUESTED NOTICE IN THESE CHAPTER 11 CASES PURSUANT TO BANKRUPTCY RULE 2002 PLEASE TAKE NOTICE that Haggen Holdings, LLC and its above-captioned affiliated debtors and debtors in possession (each, a Debtor, and collectively, the Debtors have filed the attached Debtors Motion for Entry of an Order, Pursuant to Sections 105(a, 363(b and 503(b of the Bankruptcy Code and Bankruptcy Rule 9019, Approving Critical Vendor Trade Arrangement by and among the Debtors and Unified Grocers, Inc. (the Motion. PLEASE TAKE FURTHER NOTICE that, contemporaneously with the filing of the Motion, the Debtors have also filed a motion (the Motion to Shorten requesting that a hearing to consider the Motion be held on October 29, 2015 at 10:00 a.m. (ET before the Honorable Kevin Gross, in the United States Bankruptcy Court for the District of Delaware, 824 North Market Street, 6 th Floor, Courtroom No. 3, Wilmington, Delaware PLEASE TAKE FURTHER NOTICE that, pursuant to the Motion to Shorten, the Debtors have requested that any objections to the Motion must be filed on or before October 26, 2015 at 4:00 p.m. (ET (the Objection Deadline with the United States Bankruptcy Court for the District of Delaware, 824 North Market Street, 3rd Floor, Wilmington, Delaware At the same time, you must serve a copy of the objection upon the undersigned proposed counsel to the Debtors so as to be received on or before the Objection Deadline. 1 01: The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, are: Haggen Holdings, LLC (7558, Haggen Operations Holdings, LLC (6341, Haggen Opco South, LLC (7257, Haggen Opco North, LLC (5028, Haggen Acquisition, LLC (7687, and Haggen, Inc. (4583. The mailing address for each of the Debtors is 2211 Rimland Drive, Bellingham, WA

15 Case KG Doc Filed 10/14/15 Page 2 of 2 PLEASE TAKE FURTHER NOTICE THAT, IF YOU FAIL TO RESPOND IN ACCORDANCE WITH THIS NOTICE, THE COURT MAY GRANT THE RELIEF REQUESTED IN THE MOTION WITHOUT FURTHER NOTICE OR A HEARING. Dated: October 14, 2015 Wilmington, Delaware YOUNG CONAWAY STARGATT & TAYLOR, LLP /s/ Robert F. Poppiti, Jr. Matthew B. Lunn (No Robert F. Poppiti, Jr. (No Ian J. Bambrick (No Ashley E. Jacobs (No Rodney Square 1000 North King Street Wilmington, DE Telephone: ( Facsimile: ( and- STROOCK & STROOCK & LAVAN LLP Frank A. Merola Sayan Bhattacharyya Elizabeth Taveras 180 Maiden Lane New York, New York Telephone: ( Facsimile: ( PROPOSED COUNSEL TO THE DEBTORS AND DEBTORS-IN-POSSESSION 01:

16 Case KG Doc Filed 10/14/15 Page 1 of 10 EXHIBIT A Proposed Order

17 Case KG Doc Filed 10/14/15 Page 2 of 10 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE Chapter 11 In re: Case No (KG HAGGEN HOLDINGS, LLC, et al., 1 (Jointly Administered Debtors. Ref. Docket No. ORDER, PURSUANT TO SECTIONS 105(a, 363(b AND 503(b OF THE BANKRUPTCY CODE AND BANKRUPTCY RULE 9019, APPROVING CRITICAL VENDOR TRADE ARRANGEMENT BY AND AMONG THE DEBTORS AND UNIFIED GROCERS, INC. Upon consideration of the motion (the Motion 2 of the Debtors for the entry of an order, pursuant to sections 105(a, 363(b and 503(b of the Bankruptcy Code and Bankruptcy Rule 9019, approving that certain critical vendor trade arrangement by and among the Debtors and Unified Grocers, Inc. ( Unified Grocers, dated as of October 6, 2015 (the Trade Arrangement, a copy of which is attached to the Motion as Exhibit B; and upon consideration of the Motion and all pleadings related thereto; and due and proper notice of the Motion having been given; and it appearing that no other or further notice of the Motion is required; and it appearing that the Court has jurisdiction to consider the Motion in accordance with 28 U.S.C. 157 and 1334 and the Amended Standing Order; and it appearing that this is a core proceeding pursuant to 28 U.S.C. 157(b(2; and it appearing that venue of this proceeding and the Motion is proper pursuant to 28 U.S.C and 1409; and it appearing that the relief requested in the Motion and provided for herein is in the best interest of the Debtors, their estates 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, are: Haggen Holdings, LLC (7558, Haggen Operations Holdings, LLC (6341, Haggen Opco South, LLC (7257, Haggen Opco North, LLC (5028, Haggen Acquisition, LLC (7687, and Haggen, Inc. (4583. The mailing address for each of the Debtors is 2211 Rimland Drive, Bellingham, WA Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Motion.

18 Case KG Doc Filed 10/14/15 Page 3 of 10 and creditors and is an appropriate exercise of the Debtors business judgment; and after due deliberation and sufficient cause appearing therefor, IT IS HEREBY ORDERED THAT: 1. The Motion is GRANTED as set forth herein. 2. Pursuant to sections 105(a, 363(b and 503(b of the Bankruptcy Code and Bankruptcy Rule 9019, the Trade Arrangement is approved, and the terms and conditions of the Trade Arrangement (including without limitation the release set forth therein are incorporated into this Order as if fully set forth herein. 3. The Debtors are authorized to agree to an allowed administrative expense claim for the balance of Unified Grocers prepetition claim for goods shipped to the Debtors for which Unified Grocers has not received payment pursuant to section 503(b(9 of the Bankruptcy Code, without the need for further notice to, or action of, the Court. 4. The Debtors are authorized to execute and deliver such other instruments or documents, and take such other action as may be necessary or appropriate, to implement and effectuate the relief granted by this Order. 5. This Order shall bind the Debtors, their estates and any successors thereto, including, any subsequently appointed chapter 7 trustee in respect of the Debtors and their estates. 6. This Court shall retain jurisdiction to hear and determine all matters arising from or related to the implementation of this Order. Dated:, 2015 Wilmington, Delaware Kevin Gross United States Bankruptcy Judge 2

19 Case KG Doc Filed 10/14/15 Page 4 of 10 EXHIBIT B Trade Arrangement

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