Case 17-12906-CSS Doc 871 Filed 12/14/18 Page 1 of 8 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: Chapter 11 CHARMING CHARLIE HOLDINGS INC., et al., 1 Case No. 17-12906 (CSS Debtors. Jointly Administered STIPULATION REGARDING ALLOWANCE AND PAYMENT OF 503(B(9 ADMINISTRATIVE EXPENSE CLAIM OF LLOYD S UNDERWRITERS/TOKIO MARINE KILN SYNDICATES LIMITED, AS ASSIGNEE OF FRAGMENTS HOLDING LLC This Stipulation (this Stipulation is entered into this 14 th day of December, 2018, by and among the above captioned debtors and debtors-in-possession (collectively, the Reorganized Debtors, and Lloyd s Underwriters/Tokio Marine Kiln Syndicates Limited ( Lloyd s and, together with the Reorganized Debtors, collectively, the Parties, as the assignee of Fragments Holding LLC ( Fragments with respect to the Proof of Claim (as defined below. WHEREAS, on December 11, 2017 (the Petition Date, each of the Reorganized Debtors filed a voluntary petition for relief under chapter 11 of title 11 of the United States Code (the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (the Court ; WHEREAS, on March 23, 2018, Fragments filed Proof of Claim No. 81 (the Proof of Claim asserting, among other things, an administrative expense Claim under Section 503(b(9 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, include: Charming Charlie Canada LLC (0693; Charming Charlie Holdings Inc. (6139; Charming Charlie International LLC (5887; Charming Charlie LLC (0263; Charming Charlie Manhattan LLC (7408; Charming Charlie USA, Inc. (3973; and Poseidon Partners CMS, Inc. (3302. The location of the Debtors service address is: 6001 Savoy Drive, 4th Floor, Houston, Texas 77036.
Case 17-12906-CSS Doc 871 Filed 12/14/18 Page 2 of 8 of the Bankruptcy Code in the aggregate amount of $108,493.37 against Reorganized Debtors Charming Charlie Holdings, Inc. ( CCH relating to certain goods asserted to be delivered to CCH within the 20-day period preceding the Petition Date (such administrative expense Claim being the Fragments Administrative Claim. In addition to the Fragments Administrative Claim, Fragments also asserted a general unsecured claim against CCH in the aggregate amount of $600,485.60 in the Proof of Claim (the Fragments GUC. WHEREAS, March 29, 2018, the Reorganized Debtors filed the Fourth Amended Joint Chapter 11 Plan of Reorganization of Charming Charlie Holdings Inc. and its Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code [Docket No. 564] (the Plan. 2 WHEREAS, on April 3, 2018, the Bankruptcy Court entered its Findings of Fact, Conclusions of Law and Order Confirming the Fourth Amended Joint Chapter 11 Plan of Reorganization of Charming Charlie Holdings Inc. and Its Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code [Docket No. 584] (the Confirmation Order confirming the Plan; WHEREAS, on April 24, 2018, the Reorganized Debtors filed their Notice of (I Entry of Confirmation Order, (II Occurrence of Effective Date, and (III Related Bar Dates [Docket No. 618] stating that the Effective Date had occurred; WHEREAS, on July 23, 2018, the Reorganized Debtors filed their First Omnibus Objection to Proofs of Claim [Docket No. 756] (the First Objection. Under the First Objection, the Reorganized Debtors asserted, among other things, that the Proof of Claim (including, without limitation, the Fragments Administrative Claim and Fragments GUC should be recharacterized as being asserted solely against Reorganized Debtor Charming Charlie LLC; WHEREAS, on July 23, 2018, the Reorganized Debtors filed their Second Omnibus Objection to Proofs of Claim [Docket No. 757] (the Second Objection. Under the Second 2 Capitalized terms used but not otherwise defined herein shall have the meaning ascribed to them in the Plan.
Case 17-12906-CSS Doc 871 Filed 12/14/18 Page 3 of 8 Objection, the Reorganized Debtors objected to, among other things, the extent to which the Fragments Administrative Claim is properly entitled to administrative expense priority under Section 503(b(9 of the Bankruptcy Code; WHEREAS, on March 19, 2018, Fragments transferred, assigned and conveyed 100% of its rights, titles and interests in and to the Proof of Claim to Lloyd s; WHEREAS, on December 12, 2018, Fragments filed its Preliminary Limited Objection by Lloyd s Underwriters/Tokio Marine Kiln Syndicates Limited, as Assignee of, Inter Alia, Claims Filed by Fragments Holding LLC to A: Reorganized Debtors First Omnibus Objection to Certain Proofs of Claim (Non-Substantive; B: The Reorganized Debtors Second Omnibus Objection to Certain Proofs of Claim (Substantive, and C: Motion of Reorganized Debtors for Entry of an Order Issuing a Final Decree and Closing the Chapter 11 Cases [Docket Nos. 866, 866-1 and 866-2] (the Lloyd s Objection responding to, among other things, the First Objection and Second Objection; WHEREAS, following arms length discussions between Lloyd s and the Reorganized Debtors, the Reorganized Debtors have stipulated to allow the Fragments Administrative Claim, to be satisfied as set forth herein, and the Fragments GUC; WHEREAS, pursuant to paragraph 81 of the Confirmation Order and Section IX.A of the Plan, the Reorganized Debtors may compromise and settle Claims against the Debtors and their Estates without any further notice to or action, order or approval of the Bankruptcy Court after the Effective Date. NOW THEREFORE, it is hereby stipulated and agreed to by and among the Parties as follows:
Case 17-12906-CSS Doc 871 Filed 12/14/18 Page 4 of 8 1. The entirety of the Proof of Claim (including, without limitation, the Fragments Administrative Claim and Fragments GUC shall be recharacterized as being asserted solely against Reorganized Debtor Charming Charlie LLC. The Fragments Administrative Claim shall be allowed in the total amount of $108,493.37 (the Administrative Expense Payment and treated as an Allowed General Administrative Claim under Article II.A of the Plan. The Fragments GUC shall be allowed in the total amount of $600,485.60 and treated as an Allowed General Unsecured Claim (Class 4 under Article III.B of the Plan. The Reorganized Debtors claims agent shall update the Claims Registry in the Reorganized Debtors bankruptcy cases to reflect the terms of this Stipulation, including the aforementioned recharacterization of the Proof of Claim, the $108,493.37 Allowed General Administrative Claim and the $600,485.60 Allowed General Unsecured Claim described herein. The Administrative Expense Payment shall be paid to Lloyd s via check payable to Lloyd s Underwriters/Tokio Marine Kiln Syndicates Limited and transmitted to Arthur D. Goguen, B.B.A., AIIC CFE, Managing Director, BBCG Claim Services, 1550 Enterprise Road, Suite 320, Mississauga ON L4W 4P5 at the times and in the amounts set forth below: Amount Due Payment Due Date $27,123.35 No later than December 21, 2018 $27,123.35 No later than January 21, 2019 $27,123.35 No later than February 21, 2019 $27,123.35 No later than March 21, 2019 Any distributions made on account of the Fragments GUC shall be paid to Lloyd s in the manner described above.
Case 17-12906-CSS Doc 871 Filed 12/14/18 Page 5 of 8 2. For the avoidance of any doubt, this Stipulation modifies and allows the Fragments Administrative Claim and the Fragments GUC, each as set forth herein. Immediately upon Lloyd s receipt of the final installment of the Administrative Expense Payment in indefeasible funds, any and all General Administrative Claims arising on or before the Effective Date of the Plan against any one or more of the Reorganized Debtors filed by Fragments, including, without limitation, the Fragments Administrative Claim, whether heretofore, now or hereafter held by or for the benefit of Lloyd s, Fragments or otherwise, shall be deemed fully satisfied, paid and discharged in all respects. Notwithstanding any provision of this Agreement to the contrary, except with respect to the Fragments Administrative Claim and Fragments GUC, this Agreement in no way impairs any Claims, including any Administrative Claims, filed or held by Lloyd s. 3. Immediately upon the effectiveness hereof, (i the First Objection and the Second Objection shall each be deemed withdrawn solely with respect to the Proof of Claim and (ii the Lloyd s Objection shall be deemed withdrawn. 4. Nothing in this Stipulation is intended to, or shall be deemed to, waive, limit, impair, or restrict any rights, remedies, or interests of the Parties under the Confirmation Order or the Plan. 5. The relief granted herein shall be binding upon any chapter 11 trustee appointed in these chapter 11 cases (and upon any chapter 7 trustee appointed in the event of a subsequent conversion of these chapter 11 cases to cases under chapter 7. 6. This Stipulation constitutes the entire agreement between the Parties and supersedes all prior agreements and understandings, both written and oral, between the Parties
Case 17-12906-CSS Doc 871 Filed 12/14/18 Page 6 of 8 with respect to the subject matter hereof and, except as otherwise expressly provided herein, is not intended to confer upon any other person any rights or remedies hereunder. 7. The undersigned persons have full authority to execute this Stipulation on behalf of the respective Parties, and the respective Parties hereto have full knowledge of and have consented to this Stipulation. 8. This Stipulation is without prejudice to the right of the Reorganized Debtors (or any one or more of them to object, on any basis, to any Claim (other than (i the Fragments Administrative Claim and (ii the Fragments GUC now or hereafter held by or for the benefit of Fragments, Lloyd s or their respective successors and assigns. 9. Neither this Stipulation, nor any terms contained herein shall be offered or received in evidence or in any way referred to in any legal action or administrative proceeding among or between the parties hereto, other than as may be necessary: (a to enforce this Stipulation; or (b to seek damages or injunctive relief in connection therewith. 10. Each of the Parties shall bear its own attorneys fees and costs with respect to the execution and delivery of this Stipulation and the matters addressed herein; provided, however, that in the event a scheduled payment is not made and the bankruptcy case is closed, the Reorganized Debtors will, in the event it is necessary for Lloyd s to enforce its rights hereunder, reopen the applicable bankruptcy case at their own expense. 11. This Stipulation may be executed in counterparts, any of which may be transmitted by facsimile or electronic mail, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. 12. This Stipulation shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to principles of conflict of laws.
Case 17-12906-CSS Doc 871 Filed 12/14/18 Page 7 of 8 13. This Stipulation may not be amended without the express written consent of all Parties to this Stipulation. 14. This Stipulation shall be binding upon the Parties hereto and upon all of their respective affiliates, assigns and successors. 15. It is acknowledged that each Party has participated in and jointly consented to the drafting of this Stipulation and that any claimed ambiguity shall not be construed for or against either Party on account of such drafting. 16. The Court shall retain jurisdiction over any and all disputes or other matters arising under or otherwise relating to this Stipulation. [Signature Page Follows]
Case 17-12906-CSS Doc 871 Filed 12/14/18 Page 8 of 8 Dated: December 14, 2018 /s/ Domenic E. Pacitti Wilmington, Delaware Domenic E. Pacitti (DE Bar No. 3989 Michael W. Yurkewicz (DE Bar No. 4165 KLEHR HARRISON HARVEY BRANZBURG LLP 919 N. Market Street, Suite 1000 Wilmington, Delaware 19801 Telephone: (302 426-1189 Facsimile: (302 426-9193 -and- Drew T. Parobek (admitted pro hac vice Kari B. Coniglio (admitted pro hac vice Jeffrey W. Bieszczak (admitted pro hac vice VORYS, SATER, SEYMOUR AND PEASE LLP 200 Public Square, Suite 1400 Cleveland, Ohio 44114 Telephone: (216 479-6100 Facsimile: (216 479-6060 Co-Counsel for the Reorganized Debtors /s/ Scott J. Leonhardt Scott J. Leonhardt (DE Bar No. 4885 THE ROSNER LAW GROUP LLC 824 N. Market Street Suite 810 Wilmington, Delaware 19801 Telephone: (302-777-1111 Email: leonhardt@teamrosner.com Counsel for Lloyd s