Case Doc 462 Filed 10/14/16 Entered 10/14/16 10:54:17 Main Document Pg 1 of 26

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1 Case Doc 462 Filed 10/14/16 Entered 10/14/16 10:54:17 Main Document Pg 1 of 26 UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MISSOURI EASTERN DIVISION In re: THI SELLING CORPORATION, f/k/a TOTAL HOCKEY, INC., et al., 1 Debtors. Case No Chapter 11 (Jointly Administered) DEBTORS MOTION FOR ENTRY OF ORDERS (I) APPROVING PAYMENT OF ADMINISTRATIVE EXPENSES AND UNSECURED PRIORITY CLAIMS; (II) APPROVING PRO RATA DISTRIBUTIONS ON ACCOUNT OF GENERAL UNSECURED CLAIMS; (III) AUTHORIZING THE DESTRUCTION, ABANDONMENT, OR OTHER DISPOSITION OF REMAINING RECORDS AND DOCUMENTS; (IV) DISMISSING THE DEBTORS CHAPTER 11 CASES; AND (V) GRANTING RELATED RELIEF THI Selling Corporation, f/k/a Total Hockey, Inc. and its affiliated debtors and debtors in possession (collectively, the Debtors ) in the above-captioned chapter 11 cases (the Chapter 11 Cases ), by and through their undersigned counsel, respectfully file this motion (this Motion ) for entry of orders: (i) approving payment of administrative expenses and unsecured priority claims; (ii) approving pro rata distributions on account of general unsecured claims; (iii) authorizing the destruction, abandonment or other disposition of remaining records and documents, (iv) dismissing the Debtors Chapter 11 Cases, and (v) granting related relief. In support of this Motion, the Debtors rely upon and incorporate by reference the Declaration of Lee A. Diercks in Support of the Debtors Motion for Entry of Orders (I) Approving Payment of Administrative Expenses and Unsecured Priority Claims; (II) Approving Pro Rata Distributions 1 The Debtors in these cases, along with the last four digits of each Debtors federal tax identification number, are: THI Selling Corporation (f/k/a Total Hockey, Inc.) (4010); PBC Selling Corporation (f/k/a Player s Bench Corporation) (8085); and Hipcheck, L.L.C. (4406). The Debtors mailing address is 3120 Riverport Tech Center Dr., Maryland Heights, MO

2 Case Doc 462 Filed 10/14/16 Entered 10/14/16 10:54:17 Main Document Pg 2 of 26 on Account of General Unsecured Claims; (III) Authorizing the Destruction, Abandonment or Other Disposition of Remaining Records and Documents; (IV) Dismissing the Debtors Chapter 11 Cases; and (V) Granting Related Relief, which is attached as Exhibit A. In further support of this Motion, the Debtors respectfully represent as follows: PRELIMINARY STATEMENT 1. Since the commencement of these Chapter 11 Cases, the Debtors have sold substantially all of their assets to TSG Enterprises, LLC and its nominee TSG TH Acquisition Co., LLC ( TSG ) pursuant to the Sale Order (as defined below), with the sale closing on August 5, On August 5, 2016, at the closing of the sale to TSG, the Debtors paid in full their liabilities to their Lenders (as defined below), and on August 25, 2016, the Debtors paid in full its secured obligation to Bauer (as defined below). As a result of these payments, there are no pending secured claims against the Debtors or their estates. 3. Other than the Visa/MasterCard Claim (as defined and discussed below), the Debtors have no other significant assets to administer in these Chapter 11 Cases. 4. The Debtors estimate that after final administration of their estates and payment of allowed administrative expenses and unsecured priority claims, they will have approximately $1,100,000 to $1,300,000 to fund distributions on account of allowed general unsecured claims. In comparison, the Debtors estimate that allowed general unsecured claims in these Chapter 11 Cases will total approximately $32,000,000 to $33,000, Given the limited funds to distribute to general unsecured creditors, the Debtors do not believe it would be prudent or economical to incur significant additional administrative expenses to propose and seek confirmation of a chapter 11 plan, or to convert these Chapter 11 Cases to chapter 7, because the additional administrative expenses will substantially erode the

3 Case Doc 462 Filed 10/14/16 Entered 10/14/16 10:54:17 Main Document Pg 3 of 26 distributions which general unsecured creditors might otherwise receive. Moreover, if these Chapter 11 Cases remain open, the Debtors will continue to incur additional administrative expenses for no substantive purpose. 6. Based on these facts, and in consultation with the Committee, the Debtors have determined that dismissal of these Chapter 11 Cases is warranted as set forth herein. JURISDICTION AND VENUE 7. This Court has jurisdiction to consider this Motion pursuant to 28 U.S.C. 157 and This is a core proceeding pursuant to 28 U.S.C. 157(b) and Rule (B)(1) of the Local Rules of the United States District Court for the Eastern District of Missouri. Venue of these cases and this Motion before this Court is proper pursuant to 28 U.S.C and The statutory bases for the relief requested herein are sections 105(a), 305, 349, 363(b)(1), 554(a) and 1112(b) of title 11 of the United States Code (as amended, the Bankruptcy Code ), and rules 1017, 2002 and 6007 of the Federal Rules of Bankruptcy Procedures (the Bankruptcy Rules ). BACKGROUND 9. On July 6, 2016 (the Petition Date ), the Debtors commenced these Chapter 11 Cases by filing voluntary petitions for relief under chapter 11 of the Bankruptcy Code. The Debtors are authorized to continue to operate their businesses and manage their assets as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. No trustee or examiner has been appointed in the Chapter 11 Cases. 10. On July 15, 2016, the United States filed a notice regarding the appointment of an official committee of unsecured creditors (the Committee ) in these cases. 11. The factual background regarding the Debtors, including their business operations, their capital and debt structures, and the events leading to the filing of these Chapter

4 Case Doc 462 Filed 10/14/16 Entered 10/14/16 10:54:17 Main Document Pg 4 of Cases, is set forth in detail in the Declaration of Lee Diercks in Support of Chapter 11 Petitions and First Day Motions [Docket No. 4]. 12. On July 20, 2016, the Debtors filed their schedules of assets and liabilities and statements of financial affairs, and on July 29, 2016, the U.S. Trustee completed the 11 U.S.C. 341 Meeting of Creditors. Sale of Substantially All of Debtors Assets 13. On the Petition Date, the Debtors filed the Debtors Motion for Entry of (i) an Order (a) Approving Bid Procedures and Bid Protections in Connection with the Sale of Substantially All of the Debtors Assets, (b) Approving the Form and Manner of Notice Thereof, (c) Scheduling an Auction and Sale Hearing, (d) Approving Procedures for the Assumption and Assignment of Contracts and Leases, and (e) Granting Related Relief and (ii) an Order (a) Approving the Asset Purchase Agreement between the Debtors and the Purchaser, (b) Authorizing the Sale of Substantially All of the Debtors Assets Free and Clear of Liens, Claims, Encumbrances, and Interests, (c) Authorizing the Assumption and Assignment of Contracts and Leases, and (d) Granting Related Relief [Docket No. 12] (the Bid Procedures Motion ). 14. On July 8, 2016, the Court entered the Order (a) Approving Bid Procedures and Bid Protections in Connection with Sale of Substantially all of the Debtors Assets, (b) Approving the Form and Manner of Notice Thereof, (c) Scheduling an Auction and Sale Hearing, (d) Approving Procedures for the Assumption and Assignment of Contracts and Leases, and (e) Granting Related Relief [Docket No. 78] (the Bid Procedures Order ). 15. In connection with the Bid Procedures Motion, the Debtors executed an Asset Purchase Agreement (the Stalking Horse APA ) with TSG, as the stalking horse bidder (the Stalking Horse Bidder ) for the sale of substantially all the Debtors assets (the Sale ).

5 Case Doc 462 Filed 10/14/16 Entered 10/14/16 10:54:17 Main Document Pg 5 of On July 22, 2016, the Stalking Horse Bidder delivered to the Debtors a written notice waiving or deeming satisfied the Stalking Horse Contingencies prior to the expiration of the Stalking Horse Contingencies Deadline (as such terms are defined in the Bid Procedures Order). Also, no Acceptable Bidders (other than the Stalking Horse Bidder) submitted Acceptable Bids by the Bid Deadline of 12:00 p.m. (CT) on July 27, As a result, the Debtors canceled the Auction and designated the Stalking Horse APA as the Successful Bid pursuant to Article X(a) of the Bid Procedures Order. 17. On August 4, 2016, the Court entered its Order (A) Approving the Asset Purchase Agreement Between Debtors and the Purchaser, (B) Authorizing the Sale of Substantially All of the Debtors Assets Free and Clear of All Liens, Claims, Encumbrances and Interests, (C) Authorizing the Assumption and Assignment of Contracts and Leases, and (D) Granting Related Relief [Docket No. 247] (the Sale Order ) approving the final version of the Stalking Horse APA (the Agreement ) attached thereto and authorizing the Debtors to consummate the Sale pursuant to the Agreement. Closing of Sale and Payment of Secured Claims 18. On August 5, 2016, the Debtors and TSG, the Stalking Horse Bidder, closed the Sale contemplated under the Agreement. At the closing the Debtors paid in full their liabilities to their secured lenders, Citizens Business Capital, a division of Citizens Asset Finance, Inc. (a subsidiary of Citizens Bank, N.A.) and Gordon Brothers Finance Company (collectively, the Lenders ), as authorized by the Sale Order and the Third Interim Order (I) Authorizing Use of Cash Collateral, (II) Granting Adequate Protection, and (III) Modifying the Automatic Stay [Docket No. 248]. After funding the $1,000,000 Adjustment Fund (as defined in the Agreement), the Debtors received the remaining net proceeds from the Sale.

6 Case Doc 462 Filed 10/14/16 Entered 10/14/16 10:54:17 Main Document Pg 6 of On August 25, 2016, the Debtors paid in full their agreed-upon secured obligation of $775, to Bauer Hockey, Inc. (including all of its parents, subsidiaries, affiliates, successors and assigns, Bauer ), as authorized by the Final Order (I) Authorizing Use of Cash Collateral, (II) Granting Adequate Protection, and (III) Modifying the Automatic Stay [Docket No. 316] (the Final Cash Collateral Order ). 2 As a result of these payments, there are no pending secured claims against the Debtors or their estates Following the closing, the Debtors and TSG have worked, and continue to work, on completing certain post-closing adjustments and reconciliations. Upon the completion of this work, the remaining cash in the Adjustment Fund will be paid to the Debtors. The Debtors also will be entitled to payment from TSG of certain pro-rations of rent and other operating expenses incurred during the transition of ownership and operation of the business. Debtors Remaining Assets 21. The Debtors are currently attempting to monetize their potential claim related to Visa and MasterCard interchange fees (the Visa/MasterCard Claim ). The Debtors have contacted several parties that have purchased such claims in other chapter 11 cases to offer the Visa/MasterCard Claim for sale. These parties have requested that the Debtors provide historical credit card sales transaction documents back to 2005 before they are willing to make any offer, which the Debtors are attempting to provide. If the Debtors are able to secure one or more offers 2 The Final Cash Collateral Order also allowed the Bauer Unsecured Deficiency Claim in the amount of $13,225,000.00, but provided that Bauer would not be entitled to receive any distributions on account thereof unless holders of allowed general unsecured claims other than Bauer received cash distributions equal to the General Unsecured Distributions Threshold. (See Final Cash Collateral Order, at 9.) 3 BMW Bank of North America ( BMW ) filed a secured claim [Claim #1] against Debtor Hipcheck, L.L.C. ( Hipcheck ) relating to certain financing of an automobile co-owned by Hipcheck. Hipcheck and BMW have entered into a stipulation pursuant to which, among other things, BMW has agreed to withdraw its secured claim. The Debtors intend to file a motion to approve the stipulation to be heard at the hearing on this Motion.

7 Case Doc 462 Filed 10/14/16 Entered 10/14/16 10:54:17 Main Document Pg 7 of 26 in the near future, the Debtors will file a motion to approve the sale of the Visa/MasterCard Claim. 22. Other than the Visa/MasterCard Claim, the Debtors have no other significant assets left to administer in these Chapter 11 Cases. Among other things, the Debtors have investigated potential claims to avoid preferences and/or fraudulent transfers, and have determined that such claims do not have merit, would be unduly expensive to litigate in comparison to the anticipated recoveries, and/or any net recoveries from such claims would not materially increase the projected distributions to general unsecured creditors to justify incurring the additional administrative expenses of maintaining these Chapter 11 Cases and delaying distributions to creditors while such claims were pursued. Thus, in consultation with the Committee, the Debtors have decided, in their business judgment, not to pursue potential avoidance claims. 23. At present, the Debtors have approximately $2,200,000 to $2,400,000 in cash and anticipated recoveries on receivables, which will decrease in amount as continuing wind-down and other administrative expenses are incurred and paid. These funds are available to pay administrative expenses and unsecured priority claims and make pro rata distributions on account of general unsecured claims as set forth below. Outstanding Administrative Expenses and Claims 24. On August 19, 2016, the Court entered an Order (I) Establishing New Deadlines For Filing Proofs of Claim; (II) Approving Procedures For Filing Proofs of Claim; and (III) Approving the Form, Manner, and Sufficiency of Providing Notice Thereof [Docket No. 288] (the Bar Date Order ). The Bar Date Order provides that (a) all administrative expenses, other than the fees and expenses of retained professionals (collectively, the Professionals ), arising

8 Case Doc 462 Filed 10/14/16 Entered 10/14/16 10:54:17 Main Document Pg 8 of 26 prior to August 17, 2016, including expenses under section 503(b)(9) of the Bankruptcy Code (the 503(b)(9) Claims ), (b) unsecured priority claims, and (c) general unsecured claims, shall be filed on or before by September 23, 2016 (the General Bar Date ), with the exception of proofs of claim of governmental units (collectively, Governmental Claims ) for which the applicable bar date is January 3, 2017 (the Governmental Claim Bar Date ) The Debtors have reviewed and analyzed the requests for payment of administrative expenses and proofs of claim that have been filed to date and have sought to resolve any disputed claims without the need for the filing of a formal objection. However, the Debtors have filed objections to certain disputed administrative expenses and claims. 26. With respect to the Governmental Claims, certain governmental units have filed proofs of claim against the Debtors estates, and the Debtors are attempting to contact other governmental units with which the Debtors had dealings in the ordinary course of business prior to the Petition Date, to request that they file proofs of claim as soon as possible and not wait until the Governmental Claim Bar Date. The Debtors will seek to resolve any disputed issues with the Governmental Claims without the need for the filing of a formal objection. 27. With respect to the fees and expenses of Professionals, the Debtors have requested their retained Professionals, and have asked the Committee to request its retained Professionals, to file final fee applications to be heard concurrently with the hearing on this Motion. 28. The Debtors anticipate they will resolve any other remaining case administrative matters, including objections to claims, in the near future. Accordingly, the Debtors seek to dismiss the Chapter 11 Cases on a structured basis, pay allowed administrative expenses and 4 Pursuant to the Bar Date Order, the bar date for general unsecured claims for damages arising from the rejection of certain executory contracts pursuant to the Court s Order, Pursuant to Sections 105(a) and 365 of the Bankruptcy Code, and Bankruptcy Rule 6004, Authorizing Rejection of Certain Executory Contracts [Docket No. 357] is October 24, 2016.

9 Case Doc 462 Filed 10/14/16 Entered 10/14/16 10:54:17 Main Document Pg 9 of 26 unsecured priority claims, and make pro rata distributions on account of allowed general unsecured claims, as set forth herein. RELIEF REQUESTED 29. The Debtors request entry of an order, substantially in the form of order the Debtors have posted or will post on their case website, (the Proposed Order ): (i) approving payment of allowed administrative expenses and unsecured priority claims; (ii) approving pro rata distributions on account of allowed general unsecured claims; (iii) authorizing the destruction, abandonment or other disposition of remaining records and documents; (iv) approving dismissal of the Chapter 11 Cases; and (v) granting related relief. A. PROPOSED PAYMENT OF ADMINISTRATIVE EXPENSES (b)(9) Claims. Upon review of the Debtors books and records, the 503(b)(9) Claims filed by vendors by the General Bar Date and a reconciliation of these claims, the Debtors believe in good faith that the 503(b)(9) Claims listed on Exhibit B attached hereto constitute the properly allowed 503(b)(9) Claims in these Chapter 11 Cases. The Debtors propose to pay the allowed 503(b)(9) Claims in the amounts listed on Exhibit B in full and complete satisfaction of such claims immediately upon entry of the Proposed Order, to the extent such claims have not already been allowed and paid by the Debtors in the ordinary course of business. It should be noted, however, that the Debtors have filed an objection to certain 503(b)(9) Claims that are inconsistent with the claim amounts set forth on Exhibit B. The Debtors also have filed objections to certain claims in the other categories set forth below. All of these objections will be heard at the same time as the hearing on this Motion. 31. Other Administrative Expenses (except Professional Fees and Expenses). Upon review of the Debtors books and records, the other administrative expenses (except Professional fees and expenses) filed by the General Bar Date and a reconciliation of these claims, the

10 Case Doc 462 Filed 10/14/16 Entered 10/14/16 10:54:17 Main Document Pg 10 of 26 Debtors believe in good faith that there are no other administrative expenses that constitute properly allowed administrative expenses in these Chapter 11 Cases. 32. Administrative Expenses Arising On and After August 17, The Debtors propose that if any holder of an administrative expense arising on or after August 17, 2016 (which is not subject to the General Bar Date), fails to file a request for allowance and payment of such expense so that such request is heard by the Court prior to entry of the Proposed Order, such expense shall be deemed disallowed and such holder shall receive no payment on account thereof. 33. U.S. Trustee Fees. All payments required to be made to the U.S. Trustee pursuant to 28 U.S.C. 1930(a)(6) shall be made when and as due through the date of dismissal of the Chapter 11 Cases. 34. Ordinary Course Administrative Expenses. Notwithstanding anything to the contrary herein, the Debtors reserve the right to continue to pay administrative expenses incurred in the ordinary course of business prior to dismissal of these Chapter 11 Cases without further order of this Court. 35. Professional Fees and Expenses. With respect to the fees and expenses of Professionals retained in these Chapter 11 Cases, such Professionals have filed or will file applications for final allowance and payment of compensation for services rendered and reimbursement of expenses incurred by such Professionals on and after the Petition Date through September 30, 2016, to be heard at the hearing on this Motion. Pursuant to the Local Rules of this Court, eighty percent (80%) of the fees and one-hundred percent (100%) of the expenses of the Professionals for the months of July, August and September 2016 have been or will be paid by the date of the hearing on this Motion. The Debtors propose to pay the remaining,

11 Case Doc 462 Filed 10/14/16 Entered 10/14/16 10:54:17 Main Document Pg 11 of 26 outstanding allowed amounts of the Professionals fees and expenses immediately upon entry of the Proposed Order and orders approving such Professionals final fee applications. 36. Professional Fee Reserve. The Debtors request authority to establish a reserve(s) to pay all fees and expenses of the Professionals that will provide services on and after October 1, 2016, in connection with the final administration of these Chapter 11 Cases and wind-up of the Debtors financial affairs in the total amount of $325,000 (the Professional Fee Reserve ). The Debtors propose to pay from the Professional Fee Reserve the reasonable fees and expenses of the Professionals for such work arising on and after October 1, 2016, without further order of this Court. B. PROPOSED PAYMENT OF UNSECURED PRIORITY CLAIMS 37. Unsecured Priority Claims. Upon review of the Debtors books and records, the unsecured priority claims filed by the General Bar Date and a reconciliation of these claims, the Debtors believe in good faith that the unsecured priority claims listed on Exhibit C attached hereto constitute the properly allowed unsecured priority claims in these Chapter 11 Cases. The Debtors propose to pay these allowed unsecured priority claims in the amounts listed on Exhibit C in full and complete satisfaction of such claims immediately upon entry of the Proposed Order. 38. Governmental Claims. As of the filing of this Motion, the Debtors have filed all applicable sales tax returns with the governmental units in the various jurisdictions in which the Debtors operated their business. The Court previously authorized the Debtors to pay all sales and other taxes arising prior to the Petition Date, and the Debtors have paid such taxes. The Debtors also have paid all sales and other taxes that they believe were incurred and came due on and after the Petition Date. To date, the Debtors have not received any notices from any governmental units requesting an audit of the Debtors sales or other tax liabilities. Thus, the Debtors do not believe that any unsecured priority tax claims under section 507(b)(8) of the

12 Case Doc 462 Filed 10/14/16 Entered 10/14/16 10:54:17 Main Document Pg 12 of 26 Bankruptcy Code will arise or be filed prior to the Governmental Claim Bar Date. Nevertheless, the Debtors are attempting to contact governmental units that might file a proof of claim and request that they file any claim as soon as possible so that the Debtors can resolve any disputed issues with such claims. The Debtors will modify and re-file Exhibit C to reflect any new unsecured priority tax claims that are filed prior to the hearing on this Motion. 39. Additionally, on August 31, 2016, the Debtors filed a Motion for Entry of An Order Authorizing Retention and Compensation of BWTP, P.C. as Tax Accountants In the Ordinary Course of Business to prepare federal and state income tax returns, prepare Form 1099s and Form 550 for the Debtors Health and Welfare Plan, and audit the Debtors 401(k) Profit Sharing Plan. Although it will not be clear until BWTP has completed its work, the Debtors do not believe they will owe any additional federal or state income taxes or obligations under the above-mentioned plans. 40. Governmental Claim Reserve. Notwithstanding the foregoing, the Debtors propose to establish a reserve(s) on account of any unexpected Governmental Claims that may be filed or otherwise asserted against the Debtors after entry of the Proposed Order in the total amount of $75,000 (the Governmental Claim Reserve ). The Debtors propose to pay from the Governmental Claim Reserve any Governmental Claims that are filed or otherwise asserted against the Debtors after the entry of the Proposed Order through the Governmental Claim Bar Date which the Debtors determine in their business judgment are properly allowed without further order of this Court. If and to the extent that any Governmental Claims filed or asserted after the entry of the Proposed Order exceed the Governmental Claim Reserve and any available, unallocated funds in the Debtors possession as of the Governmental Claim Bar Date, the Debtors propose to make pro rata distributions on account of such claims from the

13 Case Doc 462 Filed 10/14/16 Entered 10/14/16 10:54:17 Main Document Pg 13 of 26 Governmental Claim Reserve and such other available funds in full and complete satisfaction of such claims. C. PROPOSED PRO RATA DISTRIBUTIONS ON GENERAL UNSECURED CLAIMS 41. Upon review of the Debtors books and records, the general unsecured claims filed as of the General Bar Date and a reconciliation of these claims, the Debtors believe in good faith that the general unsecured claims listed on Exhibit D attached hereto constitute the allowed general unsecured claims in these Chapter 11 Cases. 5 The Debtors propose to make a single pro rata distribution on account of these allowed general unsecured claims as soon as practicable after entry of the Proposed Order and resolution of the remaining administrative matters in these cases (but in no event later than December 15, 2016) from all remaining cash held by the Debtors (less such amounts the Debtors determine in their business judgment shall continue to be held in the Professional Fee Reserve, the Governmental Claim Reserve, or such other reserve(s) established by the Debtors in their business judgment to pay the administrative expenses relating to the final administration of these Chapter 11 Cases and wind-up of the Debtors business affairs). 42. The Debtors intend to maintain a reserve for the benefit of any and all holders of allowed general unsecured claims (and/or any administrative expenses and unsecured priority claims) that fail to cash their distribution checks, to hold such unclaimed distributions. If and to the extent such holders fail to claim their distributions on or before March 31, 2017, such holders shall cease to be entitled to their respective distributions, their respective administrative expenses and claims shall be deemed disallowed, and their respective unclaimed distributions shall be 5 In the event that any general unsecured claims for damages resulting from the rejection of executory contracts are filed after the date of this Motion and by the October 24, 2016 bar date for such claims, the Debtors will modify and re-file Exhibit D to reflect such claims.

14 Case Doc 462 Filed 10/14/16 Entered 10/14/16 10:54:17 Main Document Pg 14 of 26 deemed forfeited. After such date, the Debtors propose to donate and transfer to a charity or charities to be selected by the Debtors in consultation with the Committee, all such unclaimed funds as well as any remaining funds in the Professional Fee Reserve, the Governmental Claim Reserve, or such other reserve(s) established by the Debtors as set forth herein, or any other funds then in the Debtors possession, custody and control. 43. The Debtors submit that authorization to make the proposed distributions is justified and warranted under the circumstances of these Chapter 11 Cases. Given that it is economically unfeasible to confirm a plan in these cases, distributions to holders of allowed administrative expenses and claims as set forth in this Motion is the most efficient means of administering the Debtors cases and distributing the remaining assets of the Debtors estates. D. DESTRUCTION, ABANDONMENT, OR OTHER DISPOSITION OF REMAINING RECORDS AND DOCUMENTS. 44. Pursuant to the terms of the Stalking Horse APA, the Debtors sold to TSG substantially all of their business records. Notwithstanding this fact, the Debtors anticipate having some records and documents in their possession upon final administration of these cases and wind-up of their business affairs. Thus, following the dismissal of these Chapter 11 Cases, the Debtors will need to destroy, abandon, or otherwise dispose of such remaining records and documents (the Remaining Documents ). 45. Section 554(a) provides, in pertinent part: After notice and a hearing, the trustee may abandon any property of the estate that is burdensome to the estate or that is of inconsequential value and benefit to the estate. 11 U.S.C. 554(a). 46. Section 363(b)(1) provides, in pertinent part:

15 Case Doc 462 Filed 10/14/16 Entered 10/14/16 10:54:17 Main Document Pg 15 of 26 The trustee, after notice and a hearing, the trustee may use, sell, or lease, other than in the ordinary course of business, property of the estate. 11 U.S.C. 363(b)(1). 47. The abandonment, destruction or other disposal of the Remaining Documents is also governed by Bankruptcy Rule 6007(a), which reads, in pertinent part, as follows: Notice of Proposed Abandonment or Disposition; Objections; Hearing. Unless otherwise directed by the court, the trustee or debtor in possession shall give notice of a proposed abandonment or disposition of property to the United States trustee, all creditors, indenture trustees and committees elected pursuant to 705 or appointed pursuant to 1102 of the Code. A party in interest may file and serve an objection within 15 days of the mailing of the notice, or within the time fixed by the court. If a timely objection is made, the court shall set a hearing on notice to the United States trustee and to the other entities as the court may direct. Fed. R. Bankr. P. 6007(a). 48. Section 554(a) of the Bankruptcy Code serves the purpose of expeditious and equitable distribution by permitting the trustee to abandon property that consumes the resources and drains the income of the estate. In re Pilz Compact Disc, Inc., 229 B.R. 630, 635 (Bankr. E.D. Pa. 1999) (citation omitted). The Court need not consider speculative factors when making a determination pursuant to section 554 of the Bankruptcy Code. 49. Generally, when a debtor seeks to use, sell or lease assets of the estate pursuant to section 363(b) of the Bankruptcy Code, the Court should approve the transaction if the proposed use of estate assets is within the debtor s reasonable business judgment regarding the proposed transaction. See, e.g., Myers v. Martin (In re Martin), 91 F.3d 389, 395 (3d Cir. 1996) (stating that the court generally defers to the trustee s judgment so long as 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. 1999) (noting that courts have applied the sound business purpose test to evaluate motions brought pursuant to section

16 Case Doc 462 Filed 10/14/16 Entered 10/14/16 10:54:17 Main Document Pg 16 of (b)). The same standard applies to a request to abandon property pursuant to section 554 of the Bankruptcy Code. See In re Cult Awareness Network, 205 B.R. 575, 579 (Bankr. N.D. Ill. 1997) (stating that the bankruptcy court must examine the trustee s decision to abandon property to ensure it reflects business judgment made in good faith ). 50. The Debtors are no longer operating their business and should not utilize their limited resources to pay the expenses to indefinitely store the Remaining Documents. Furthermore, the Debtors will no longer have the personnel to access and review the Remaining Documents after the dismissal of these Chapter 11 Cases. Accordingly, the Debtors should be authorized to destroy, abandon, or otherwise dispose of the Remaining Documents in their business judgment. E. DISMISSAL OF THESE CHAPTER 11 CASES IS WARRANTED 51. As noted above, the sale of substantially all of the Debtors assets has been completed. Thus, the Court should approve the dismissal of these Chapter 11 Cases and distributions under the terms proposed by this Motion because the costs and expenses associated with confirming a chapter 11 plan would substantially diminish creditor recoveries. Thus, there would be no benefit to pursuing confirmation of a chapter 11 plan, and conversion of these cases to chapter 7 would provide no additional benefit to creditors because the Debtors have no remaining estate assets to administer other than cash. 52. The United States Court of Appeals for the Third Circuit recently made clear that bankruptcy courts have the power, in appropriate circumstances, to approve structured dismissals. Official Comm. of Unsecured Creditors v. CIT Grp./Bus. Credit Inc. (In re Jevic Holding Corp.), 787 F.3d 173, 182 (3d Cir. 2015), cert. granted, Czyzewski v. Jevic Holding Corp., 136 S. Ct (U.S. June 28, 2016) (No ). The Third Circuit stated that

17 Case Doc 462 Filed 10/14/16 Entered 10/14/16 10:54:17 Main Document Pg 17 of 26 structured dismissals are simply dismissals that are preceded by other orders of the bankruptcy court that for cause may be given continuing effect by the Court. Id. at 181 (referring to court s ability to deviate from section 349(b) of the Bankruptcy Code for cause). 6 See Order Granting Motion to Dismiss Case and to Approve Distributions [Docket No. 415] entered in In re Whittaker Builders, Inc., Case No (Bankr. E.D. Mo. Sept. 29, 2011) (Rendlen, B.J.) (approving structured dismissal of case, including distributions on account of claims); see also In re Mid Am. Brick & Structural Prods., L.L.C., Case No (Bankr. E.D. Mo. Sept. 26, 2014) (Surratt-States, B.J.) [Docket No. 221]. A court has broad discretion to dismiss a case. In re Hedquist, 450 F.3d 801, 804 (8 th Cir. 2006). 53. Under section 1112(b) of the Bankruptcy Code, a court shall convert a case under this chapter to a case under chapter 7 or dismiss a case under this chapter, whichever is in the best interests of creditors and the estate, if the movant establishes cause. 11 U.S.C. 1112(b); Jevic Holding, 787 F.3d at 180; Albany Partners Ltd. v. Westbrook (In re Albany Partners, Ltd.), 749 F.2d 670, 674 (11th Cir. 1984); In re Blunt, 236 B.R. 861, 864 (Bankr. M.D. Fla. 1999). Section 105(a) of the Bankruptcy Code provides in relevant part: The Court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title. Bankruptcy courts across the country have approved structured dismissals pursuant to sections 1112(b) and 105(a) of the Bankruptcy Code. See, e.g., In re Olympic 1401 Elm Assocs., LLC, No (HDH), 2016 WL , at *2 (Bankr. N.D. Tex. Aug. 29, 2016); In re Naartjie Custom Kids, Inc., 534 B.R. 416, 426 (Bankr. D. Utah 2015); In re LUHC Wind Down Corp., Case No (KJC) (Bankr. D. Del. Apr. 1, 2015) [Docket No. 596]; In re 6 Although Jevic Holding is currently on appeal to the U.S. Supreme Court, the primary issue on appeal is not present in these Chapter 11 Cases. Unlike Jevic Holding, where the debtor proposed to deviate from the general priority scheme under section 507 of the Bankruptcy Code when making distributions under the structured dismissal order (see 787 F.3d at ), here the Debtors propose to distribute their remaining cash in conformity with the established bankruptcy priority scheme.

18 Case Doc 462 Filed 10/14/16 Entered 10/14/16 10:54:17 Main Document Pg 18 of 26 Buffet Partners, L.P., Case No (HDH), 2014 WL (Bankr. N.D. Tex. July 28, 2014); In re AI Liquidation Co., Case No (CSS) (Bankr. D. Del. Feb. 28, 2014) [Docket No. 166]; In re Coach Am. Grp. Holdings Corp., Case No (KG) (Bankr. D. Del. May 31, 2013) [Docket No. 1568]; In re Penn Camera Exchange, Inc., Case No (PM) (Bankr. D. Md. Aug. 21, 2012) [Docket No. 271]; In re Felda Plantation, LLC, Case No (BSS) (Bankr. M.D. Fla. May 5, 2012) [Docket No. 244]; In re KB Toys, Inc., Case No (KJC) (Bankr. D. Del. Feb. 2, 2010) [Docket No. 993]; In re Shoe Pavilion Inc., Case No (MT) (Bankr. C.D. Cal. Nov. 17, 2009) [Docket No. 1014]; In re Bag Liquidation, LTD., Case No (Bankr. N.D. Tex. Sept. 8, 2009) [Docket No. 683]; In re Dawahare s of Lexington, LLC, Case No (Bankr. E.D. Ky. Dec. 30, 2008) [Docket No. 316]; In re Princeton Ski Shop Inc., Case No (MS) (Bankr. D.N.J. Dec. 23, 2008) [Docket No. 546]; In re Harvey Electronics, Inc., Case No (ALG) (Bankr. S.D.N.Y. Dec. 12, 2008) [Docket No. 177]; In re TSIC, INC., f/k/a Sharper Image Corp., Case No (KG) (Bankr. D. Del. Aug. 13, 2008) [Docket No. 2475]; In re Fleurantin, Case No (RG) (Bankr. D.N.J. Nov. 26, 2008) [Docket No. 244], aff d, 420 F. App x 194 (3d Cir. Mar. 28, 2011); In re Cornell Trading, Inc., Case No (JNF) (Bankr. D. Mass. June 5, 2007) [Docket No. 770]; In re Shoebilee, Inc., Case No (Bankr. N.D. Ga. May 4, 2005) [Docket No. 84]. 54. A determination of cause is made by the court on a case-by-case basis. Albany Partners, 749 F.2d at 674. The decision to dismiss or convert a case is particularly delegated to the bankruptcy court s sound discretion. See In re Camden Ordinance Mfg. Co. of Arkansas, Inc., 1999 WL , at *2 (Bankr. E.D. Pa. July 21, 1999).

19 Case Doc 462 Filed 10/14/16 Entered 10/14/16 10:54:17 Main Document Pg 19 of The legislative history of section 1112(b) of the Bankruptcy Code and relevant case authority indicate that a court has wide discretion to use its equitable powers to dispose of a debtor s case. H.R. Rep. No , 1st Sess., at 405 (1977), as reprinted in 1978 U.S.C.C.A.N. 5963; S. Rep. No , 2d Sess., at 117 (1978), as reprinted in 1978 U.S.C.C.A.N. 5787; see also Albany Partners, 749 F.2d at 674 (stating that the determination of cause under 1112(b) is subject to judicial discretion under the circumstances of each case ); Small Bus. Admin. v. Preferred Door Co. (In re Preferred Door Co.), 990 F.2d 547, 549 (10th Cir. 1993) (stating that a court has broad discretion to dismiss a bankruptcy case); Sullivan Cent. Plaza I, Ltd. v. BancBoston Real Estate Capital Corp. (In re Sullivan Cent. Plaza I, Ltd.), 935 F.2d 723, 728 (5th Cir. 1991) (stating that a determination of whether cause exists under section 1112(b) of the Bankruptcy Code rests in the sound discretion of the bankruptcy court ). 56. Section 1112(b) of the Bankruptcy Code provides a nonexclusive list of sixteen examples of cause which may constitute grounds for dismissal. 11 U.S.C. 1112(b)(4)(A)- (P); Frieouf v. U.S. (In re Frieouf), 938 F.2d 1099, 1102 (10th Cir. 1991) (stating that section 1112(b) of the Bankruptcy Code s list is non-exhaustive); In re Blunt, 236 B.R. at 864 (same). One such ground is where there is substantial or continuing loss to or diminution of the estate and the absence of a reasonable likelihood of rehabilitation[.] 11 U.S.C. 1112(b)(4)(A). 57. Here, there is no reasonable likelihood of rehabilitation since substantially all of the Debtors assets have been liquidated through the sale to TSG. The sizeable cost of pursuing a plan of reorganization would only further dilute the funds that remain. The Debtors have met their burden of proving that cause exists to dismiss these Chapter 11 Cases under section 1112(b) of the Bankruptcy Code due to the absence of a reasonable likelihood of rehabilitation and that

20 Case Doc 462 Filed 10/14/16 Entered 10/14/16 10:54:17 Main Document Pg 20 of 26 there would be a continuing loss to or diminution of the estate if the Debtors were to pursue confirmation of a plan or otherwise continue to administer their estates. 58. Once a court determines that cause exists to dismiss a chapter 11 case, the court must also evaluate whether dismissal is in the best interests of the estates and creditors, as opposed to conversion of the case to one under chapter 7 or the appointment of a chapter 11 trustee. See Rollex Corp. v. Associated Materials, Inc. (In re Superior Sliding & Window, Inc.), 14 F.3d 240, 243 (4th Cir. 1994); In re Mazzocone, 183 B.R. 402, 411 (Bankr. E.D. Pa. 1995), aff d, 200 B.R. 568 (E.D. Pa. 1996). Given that they have no remaining assets to administer aside from cash, the Debtors submit that conversion of their Chapter 11 Cases to cases under chapter 7 would only create additional unnecessary administrative expenses, without enhancing the prospect for recoveries. Therefore, conversion is unwarranted. Dismissal of these Chapter 11 Cases, on the other hand, will eliminate the accrual of additional administrative expenses and bring closure to these Chapter 11 Cases in a timely and efficient manner. 59. Dismissal meets the best interests test where a debtor has nothing left to reorganize and the debtor s assets are fixed and liquidated. See In re BTS, Inc., 247 B.R. 301, 310 (Bankr. N.D. Okla. 2000); Camden Ordnance Mfg. Co. of Ark., Inc. v. U.S. Trustee (In re Camden Ordinance Mfg. Co. of Arkansas, Inc.), 245 B.R. 794, 799 (E.D. Pa. 2000) (finding that a reorganization to salvage a business which ceased doing business was not feasible); Royal Trust Bank, N.A v. Brogdon Inv. Co. (In re Brogdon Inv. Co.), 22 B.R. 546, 549 (Bankr. N.D. Ga. 1982) (dismissing chapter 11 case in part where there was simply nothing to reorganize and no reason to continue the reorganization). 60. As noted above, the Debtors have liquidated and sold their assets and there is no business left to reorganize. There is no prospect of a confirmable plan in these cases except at

21 Case Doc 462 Filed 10/14/16 Entered 10/14/16 10:54:17 Main Document Pg 21 of 26 sizeable expense and conversion to chapter 7 would be a bridge to nowhere. Jevic Holding, 787 F.3d at 181. Dismissal of the Debtors cases is therefore warranted. 61. Alternatively, cause exists to dismiss these Chapter 11 Cases pursuant to section 305(a) of the Bankruptcy Code which provides, in pertinent part: 11 U.S.C. 305(a)(1). (a) The court, after notice and a hearing, may dismiss a case under this title, or may suspend all proceedings in a case under this title, at any time if (1) the interests of creditors and the debtor would be better served by such dismissal or suspension In applying section 305(a), courts have considered a wide range of factors including, but not limited to: i. economy and efficiency of administration; ii. iii. iv. whether federal proceedings are necessary to reach a just and equitable solution; whether there is an alternative means of achieving an equitable distribution of assets; and whether the debtor and the creditors are able to work out a less expensive out-of-court arrangement which better serves the interests in the case. See In re Crown Village Farm, LLC, 415 B.R. 86, 97 (Bankr. D. Del. 2009) (enumerating section 305(a) factors and denying motion only because dismissal or abstention would have a deleterious effect on the administration of the debtor s chapter 11 case which would languish while core issues were tried elsewhere ); see also Mazzocone, 200 B.R. at 575. However, the exact factors to be considered and the weight to be given to each of them is highly sensitive to the facts of each individual case. Id.

22 Case Doc 462 Filed 10/14/16 Entered 10/14/16 10:54:17 Main Document Pg 22 of Dismissal of these cases is warranted under section 305(a)(1) for the same reasons that cause exists to dismiss these cases pursuant to section 1112(b) dismissal of the cases will effectuate an efficient administration of the estates and represents the least expensive and most equitable alternative for distribution of the Debtors assets. Keeping the Debtors in bankruptcy, either in chapter 11 or chapter 7, will not yield results that provide a greater distribution to creditors and would only serve to continue the accrual of administrative expenses of the estates. 64. The Debtors submit that the distributions contemplated herein and the dismissal of these Chapter 11 Cases further the efficient administration of the Debtors estates and the maximization of value for creditors. Accordingly, the Debtors believe that cause exists to dismiss these Chapter 11 Cases under section 305(a) of the Bankruptcy Code. F. BINDING EFFECT OF PRIOR STIPULATIONS, SETTLEMENTS, RULINGS, ORDERS AND JUDGMENTS 65. Dismissal of a case by the court pursuant to section 349(b) of the Bankruptcy Code will typically reinstate the pre-petition state of affairs by revesting property in the debtor and vacating orders and judgments of the bankruptcy court. Jevic Holding, 787 F.3d at This result, however, may be altered for cause. See id. Based on the reasons set forth in this Motion, the Debtors submit that cause exists to allow all stipulations, settlements, rulings, orders, and judgments entered by this Court during these Chapter 11 Cases to be given continued effect, notwithstanding the requested dismissal. G. CERTIFICATION AND REQUEST FOR ENTRY OF DISMISSAL ORDER. 67. As soon as reasonably practicable following the payment of allowed administrative expenses and unsecured priority claims, payment of Professional fees and expenses approved by the Court, payment of U.S. Trustee fees, establishment of reserves, and

23 Case Doc 462 Filed 10/14/16 Entered 10/14/16 10:54:17 Main Document Pg 23 of 26 pro rata distributions on account of allowed general unsecured claims, the Debtors request that the Court dismiss these Chapter 11 Cases upon the filing of a certification (a Certification ) by the Debtors that the foregoing matters have been completed and requesting entry of a dismissal order, substantially in the form of order the Debtors have posted or will post on their case website, (the Dismissal Order ). The Debtors intend to file the Certification in enough time for the Court to enter the Dismissal Order no later than December 31, The Debtors intend to serve the Certification on the general service list established in these Chapter 11 Cases, including the U.S. Trustee, but will not send the Certification to the Debtors entire matrix of creditors and parties-in-interest, as such parties will receive notice of the proposed dismissal through notice of the hearing on this Motion. H. DUTIES OF CLAIMS AND NOTICING AGENT. 69. The Debtors propose that upon the dismissal of these Chapter 11 Cases, Rust Consulting/Omni Bankruptcy, the Debtors claims and noticing agent ( Rust Omni ), shall be relieved of its responsibilities as the Debtors claims and noticing agent in these cases; provided, however, that Rust Omni shall provide the services described herein and shall be entitled to charge to the Debtors the fees and costs it incurs in providing such services. Within fourteen (14) days of entry of the Dismissal Order, Rust Omni shall (a) forward to the Clerk of the Court an electronic version of all imaged claims, (b) upload the creditor mailing list into CM/ECF, (c) docket a combined final claims register containing claims against each Debtor, and (d) box and transport all original claims to the Federal Records Center as identified by the Clerk of this Court and docket a completed SF 135 Form indicating the accession and location numbers of the archived claims.

24 Case Doc 462 Filed 10/14/16 Entered 10/14/16 10:54:17 Main Document Pg 24 of 26 I. RELEASE OF CLAIMS AGAINST DEBTORS AND COMMITTEE. 70. The Debtors propose that neither the Debtors, the Committee, nor any of their respective present or former directors, officers, employees, shareholders, members (including ex officio members), partners, attorneys, consultants, advisors and agents (in each case, acting in such capacities), shall have or incur any liability to any person for any act taken or omitted to be taken in good faith in connection with or related to the Debtors Chapter 11 Cases or the formation, preparation, dissemination, implementation or consummation of this Motion (other than an act in contravention of the Motion or the implementation of this Order or any contract, instrument, release, agreement or document created or entered into, or any other act taken or omitted to be taken in good faith in connection with the Debtors Chapter 11 Cases, this Motion or the Proposed Order, except for any claim or cause of action arising from the fraud, gross negligence or willful misconduct of such party. J. AUTHORITY FOR DISSOLUTION OF DEBTORS. 71. The Debtor s propose that upon dismissal of the Debtors Chapter 11 Cases, the Debtors shall be authorized to take any action required or advisable under applicable nonbankruptcy law to effectuate the dissolution of the Debtors, including preparation of tax returns, execution and/or filing of any required certificate of dissolution, certificate of cancellation, or similar instrument with applicable state governmental authorities. NOTICE 72. Copies of this Motion and a notice of the hearing hereon is being sent by firstclass United States Mail to (a) counsel to the Committee; (b) the U.S. Trustee; (c) the Internal Revenue Service; (d) the United States Attorney for the Eastern District of Missouri; (e) the

25 Case Doc 462 Filed 10/14/16 Entered 10/14/16 10:54:17 Main Document Pg 25 of 26 creditors and other parties listed on Exhibits B, C, and D; and (f) such other parties entitled to notice pursuant to Bankruptcy Rule In addition, a copy of a notice of the hearing on this Motion is being sent by firstclass United States Mail to all other parties on the Debtors consolidated matrix of creditors and parties-in-interest (except those creditors whose claims have been paid or were assumed by TSG under the Stalking Horse APA, including, without limitation, former customers with outstanding gift cards as of the Petition Date), as provided in Rule 2002(a)(4) of the Bankruptcy Rules. The notice of hearing includes specific information regarding how to obtain a copy of this Motion free of charge and the procedures for filing an objection to this Motion. The Debtors submit that under the circumstances no other or further notice is necessary. 74. No previous request for the relief sought herein has been made by the Debtors to this or any other Court. CONCLUSION WHEREFORE, the Debtors respectfully request that the Court (i) enter the Proposed Order granting the relief requested herein; (ii) upon the filing of the Certification by the Debtors, enter the Dismissal Order; and (iii) grant such other relief as is just and proper. Dated: October 14, 2016 St. Louis, Missouri Respectfully submitted, Polsinelli PC /s/ Matthew S. Layfield Matthew S. Layfield, MO S. Fourth Street Suite 100 St. Louis, MO Telephone: (314) Facsimile: (314) mlayfield@polsinelli.com