20-10161-jlg doc 484 filed 05/15/20 entered …...held in trust or on a consignment basis where the...

Global Notes – 1

UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK --------------------------------------------------------------- x : In re : Chapter 11 : FAIRWAY GROUP HOLDINGS CORP., et al., : Case No. 20-10161 (JLG) : Debtors.1 : (Jointly Administered) : --------------------------------------------------------------- x

MONTHLY OPERATING REPORT APRIL 2020

FAIRWAY GROUP HOLDINGS CORP., et al. CASE NO. 20-10161

GLOBAL NOTES AND STATEMENTS OF LIMITATIONS AND

DISCLAIMERS REGARDING THE DEBTORS' MONTHLY OPERATING REPORTS On January 23, 2020 (the “Commencement Date”), Fairway Group Holdings Corp. and

certain of its affiliates, as debtors and debtors in possession (collectively “Fairway” or the “Debtors”), each commenced a voluntary case under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). The Debtors are authorized to operate their businesses and manage their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. On January 27, 2020 the Bankruptcy Court entered an order authorizing the joint administration of these cases pursuant to Bankruptcy Rule 1015(b) (ECF No. 68). On February 4, 2020, the United States Trustee for Region 2 (the “U.S. Trustee”) appointed an official committee of unsecured creditors pursuant to section 1102(a)(1) of the Bankruptcy Code (the “Creditors’ Committee”).2

The Debtors are filing their consolidated monthly operating report (the “MOR”) solely for

1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, are as follows: Fairway Group Holdings Corp. (2788); Fairway Group Acquisition Company (2860); Fairway Bakery LLC (4129); Fairway Broadway LLC (8591); Fairway Chelsea LLC (0288); Fairway Construction Group, LLC (2741); Fairway Douglaston LLC (2650); Fairway East 86th Street LLC (3822); Fairway eCommerce LLC (3081); Fairway Georgetowne LLC (9609); Fairway Greenwich Street LLC (6422); Fairway Group Central Services LLC (7843); Fairway Group Plainview LLC (8643); Fairway Hudson Yards LLC (9331); Fairway Kips Bay LLC (0791); FN Store LLC (9240); Fairway Paramus LLC (3338); Fairway Pelham LLC (3119); Fairway Pelham Wines & Spirits LLC (3141); Fairway Red Hook LLC (8813); Fairway Stamford LLC (0738); Fairway Stamford Wines & Spirits LLC (3021); Fairway Staten Island LLC (1732); Fairway Uptown LLC (8719); Fairway Westbury LLC (6240); and Fairway Woodland Park LLC (9544). The location of the Debtors’ corporate headquarters is 2284 12th Avenue, New York, New York 10027. Fairway Community Foundation Inc., a charitable organization, owned by Fairway Group Holdings Corp., is not a debtor in these proceedings.

2 Capitalized terms used by not defined here in shall have the meaning ascribed to them in the Declaration of Michael Nowlan Pursuant to Rule 1007-2 of Local Bankruptcy Rules for the Southern District of New York (ECF No. 4) and the Declaration of Abel Porter Porter Pursuant to Rule 1007-2 of Local Bankruptcy Rules for Southern District of New York (ECF No. 25) (collectively, the “First Day Declarations”).

20-10161-jlg Doc 484 Filed 05/15/20 Entered 05/15/20 21:59:38 Main Document Pg 1 of 18

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purposes of complying with the monthly operating requirements applicable in the Debtors’ chapter 11 cases. The MOR is in a format acceptable to the U.S. Trustee. The MOR should not be relied upon by any persons for information relating to current or future financial conditions, events, or performance of any of the Debtors or their affiliates. The Debtors’ management team and advisors have made reasonable efforts to ensure that the MOR is as accurate and complete as possible under the circumstances.

The following notes and statements and limitations should be referred to, and referenced in

connection with, any review of the MOR.

1. Basis of Presentation. For financial reporting purposes, the Debtors historically prepare consolidated financial statements, which include information for each of the Debtors. The MOR is unaudited and preliminary and reflects the Debtors’ reasonable efforts to report certain financial information of each Debtor on an unconsolidated basis. While the Debtors historically report their quarterly financial results in accordance with Generally Accepted Accounting Principles in the United States (“GAAP”), they do not do so on a monthly basis. Accordingly, the information furnished in this MOR uses the Debtors’ normal monthly accrual method of accounting and the presentation herein may not conform with GAAP.

2. Reporting Period. Consistent with the Debtors’ customary accounting calendar, the Debtors

completed a fiscal period close on May 3, 2020 (the “April Fiscal Period Close”). The Debtors previously completed a fiscal period close on March 29, 2020 (the “March Fiscal Period Close”), March 1, 2020 (the “February Fiscal Period Close”) and before that upon the Commencement Date. Accordingly, the reporting period for this MOR is for the period from March 30, 2020 through May 3, 2020 or as of May 3, 2020 (“Reporting Date”), as relevant to the specific information presented.

3. Consolidated Entity Accounts Payable and Disbursement Systems. As described in the

Cash Management Motion,3 the Debtors utilize an integrated, centralized cash management system, in the ordinary course of business, to collect, concentrate, and disburse funds generated by their operations (the “Cash Management System”). The Debtors maintain a consolidated accounts payable and disbursements system to pay operating and administrative expenses through various disbursement accounts. Accordingly, the Debtors’ payments for ordinary course goods and services are all processed by Fairway Group Central Services LLC. Additionally, due to the nature of its consolidated Cash Management System and resulting accounting records, it would be unduly burdensome and cost prohibitive for the Debtors to record cash receipts on individual Debtors’ books and records. In conjunction with this, and in order to effectively report their profit and loss statement and balance sheet by individual Debtor, the Debtors maintain business relationships among each other, which result in intercompany receivables and payables (the “Intercompany Transactions”). The Debtors track all Intercompany Transactions in their accounting system, which concurrently are recorded on the applicable Debtors’ balance sheets and at the legal-entity level.

3 Motion of Debtors for Entry of Order (I) Authorizing Debtors to (A) Continue Using Existing Cash Management System, Bank Accounts, and Business Forms, (B) Implement Changes to the Cash Management System in the Ordinary Course of Business, (C) Continue Intercompany Transactions; (II) Confirming Administrative Expense Priority for Postpetition Intercompany Claims and for Related Relief; and (III) Granting Related Relief (ECF No. 8) (the “Cash Management Motion”).


Global Notes – 3

4. Accuracy. The financial information disclosed herein was not prepared in accordance with federal or state securities laws or other applicable non-bankruptcy law or in lieu of complying with any periodic reporting requirements thereunder. Persons and entities trading in or otherwise purchasing, selling, or transferring the claims against or equity interests in the Debtors should evaluate this financial information in light of the purposes for which it was prepared. The Debtors are not liable for and undertake no responsibility to indicate variations from securities laws or for any evaluations of the Debtors based on this financial information or any other information. The debtors have had to utilize certain estimates in order to complete their February Fiscal Period Close. As necessary, the Debtors will record adjustments in subsequent months to ensure the continued accuracy of future fiscal period closes.

5. Currency. All amounts shown in the MOR are in U.S. Dollars.

6. Payment of Prepetition Claims Pursuant to First Day Orders. Shortly after the

commencement of the Debtors’ chapter 11 cases, the Bankruptcy Court entered orders (the “First Day Orders”) authorizing, but not directing, the Debtors to, among other things, pay certain prepetition (a) service fees and charges assessed by the Debtors’ banks and debit and credit card companies; (b) claims of warehousemen and miscellaneous lien claimants; (c) certain insurance obligations; (d) obligations to “critical vendors;” (e) customer programs obligations; (f) employee wages, salaries, and related items, including employee benefit programs and independent contractor obligations; (g) taxes and assessments; and (h) amounts held in trust or on a consignment basis where the Debtor has collected on behalf of a third party. If any payments were made on account of such claims following the commencement of these chapter 11 cases pursuant to the authority granted to the Debtors by the Bankruptcy Court under the First Day Orders, such payments have been included in the MOR unless otherwise noted.

7. Liabilities Subject to Compromise. Bankruptcy Rule 3003(c) requires the Bankruptcy Court to fix the time within which proofs of claim must be filed in the chapter 11 case pursuant to section 501 of the Bankruptcy Code. This Bankruptcy Rule also provides that any creditor who asserts a claim against the debtors that arose before the Commencement Date and whose claim (a) is not listed on the Debtors’ schedules, or (b) is listed on the schedules as disputed, contingent or unliquidated, must file a proof of claim. On April 3, 2020, the Bankruptcy Court entered an order that extended the deadline for persons, excluding governmental units, to file proofs of claim against the Debtors to April 27, 2020 at 5:00 p.m. (Eastern Time). More information regarding the filing of proofs of claim can be obtained at https://case.omniagentsolutions.com/fairway. Information from filed proofs of claims are not incorporated or otherwise made part of this report.

8. Reservation of Rights. The Debtors reserve all rights to amend or supplement the MOR in all

respects, as may be necessary or appropriate. Nothing contained in this MOR shall constitute a waiver of any of the Debtors' rights or an admission with respect to their chapter 11 cases.

9. Sale Transaction. On April 29, 2020 the Bankruptcy Court entered (a) the Order

(I) Approving Asset Purchase Agreement Among the Debtors and Village Super Market, Inc.; (II) Authorizing Sale of Certain of the Debtors’ Asset Free and Clear of Liens, Claims, Interests, and Encumbrances; (III) Authorizing Assumption and Assignment of Certain Executory Contracts and Leases in Connection Therewith; and (IV) Granting Related Relief (ECF No. 449), approving the sale of the Company’s Pelham, Chelsea, Upper East Side, Upper


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West Side, Kips Bay stores, the Harlem Parking Lot and the Production and Distribution Center to Village Super Market, Inc.; (b) the Order (I) Approving Asset Purchase Agreements Among the Debtors and Amazon Retail LLC; (II) Authorizing Sale of Certain of the Debtors’ Assets Free and Clear of Liens, Claims Interests, and encumbrances; (III) Authorizing Assumption and Assignment of Certain Executory Contracts and Unexpired Leases in Connection Therewith; and (IV) Granting Related Relief (ECF No. 445), approving the sale of the Company’s Paramus and Woodland Park leases to Amazon Retail LLC; and (c) the Order (I) Approving Asset Purchase Agreement Among the Debtors and Seven Seas Georgetowne, LLC; (II) Authorizing Sale of Certain of the Debtors’ Assets Free and Clear of Liens, Claims, Interests, and Encumbrances; (III) Authorizing Assumption and Assignment of Certain Executory Contracts and Unexpired Leases in Connection Therewith; and (IV) Granting Related Relief (ECF No. 448) approving the sale of the Company’s Georgetowne store to Seven Seas Georgetowne, LLC (the “Key Food Sale Transaction”). The Key Food Sale Transaction closed on May 1, 2020, during the reporting period. The impact from the Key Food Sale Transaction is reflected in this MOR.


UNITED STATES BANKRUPTCY COURTSOUTHERN DISTRICT OF NEW YORK

In re Fairway Group Holdings Corp., et al. Case No. 20-10161 Debtors Reporting Period: March 30, 2020 - May 3, 2020

Federal Tax I.D. # 20-5942788

File with the Court and submit a copy to the United States Trustee within 20 days after the end of the month andsubmit a copy of the report to any official committee appointed in the case. (Reports for Rochester and Buffalo Divisions of Western District of New York are due 15 days after the end ofthe month, as are the reports for Southern District of New York.)

REQUIRED DOCUMENTS Form No. Document Attached

Explanation Attached

Schedule of Cash Receipts and Disbursements MOR-1 XBank Reconciliation (or copies of debtor's bank reconciliations)

Copies of bank statements Cash disbursements journalsStatement of Operations MOR-2 XBalance Sheet MOR-3 XStatus of Post-petition Taxes MOR-4 X Copies of IRS Form 6123 or payment receipt Copies of tax returns filed during reporting period

Summary of Unpaid Post-petition Debts MOR-4 X Listing of Aged Accounts PayableAccounts Receivable Reconciliation and Aging MOR-5 XTaxes Reconciliation and Aging MOR-5 XPayments to Insiders and Professionals MOR-6 XPost Petition Status of Secured Notes, Leases Payable MOR-6 XDebtor Questionnaire MOR-7 X

I declare under penalty of perjury (28 U.S.C. Section 1746) that this report and the attached documentsare true and correct to the best of my knowledge and belief.

Signature of Debtor Date

/s/ Brad Schneider 5/15/2020Signature of Authorized Individual* Date

Brad Schneider 5/15/2020Printed Name of Authorized Individual Date

*Authorized individual must be an officer, director or shareholder if debtor is a corporation; a partner if debtor is a partnership; a manager or member if debtor is a limited liability company.

CORPORATE MONTHLY OPERATING REPORT

FORM MORApril 2020

PAGE 1 OF 11



Schedule of Cash Receipts and Disbursements - March 30, 2020 - May 3, 2020 Federal Tax I.D. # 20-5942788MOR-1(Unaudited - $ in thousands)

Net Sales 67,326

Total Cash Collections 71,187

Distributions:Merchandise 46,398 Store Related & Other 3,402 Payroll 13,648 Rent 5,044 Other Occupancy 865 Taxes 671 Insurance 96

Subtotal: Operating Disbursements 70,123

Debt Service Fees 1,054 Capital Expenditures 1

Subtotal: Other Sources / Uses 1,055

Georgetowne Sale Proceeds (4,537) Debtor Professional Fee Carve-Out Funding 3,201 Lender Professional Fees 655 U.S. Trustee Fees 258 Critical Vendor Payments - PACA / PASA Payments - Required Bankruptcy Deposits 620 Stub Rent - Rent Cures -

Subtotal: Bankruptcy (Sources) / Uses 198

Total: Disbursements 71,376

Net Cash Flow (189)

Beginning Cash Balance 19,352 Net Cash Flow (189) DIP Facility Funding / (Repayments) -

Ending Cash Balance 19,162

Beginning DIP Balance 63,256 * includes DIP Roll-Up LoansBorrowings / (Repayments) - DIP Roll-Up Loans -

Ending DIP Balance 63,256

Beginning Carve-Out Balance 6,499 Carve-Out Funding 3,201 Professional Fee Payouts (2,233)

Ending Carve-Out Balance 7,467

Notes:

Description Actual

See Exhibit 1 for a list of bank accounts and bank balances. Bank statements and bank reconciliations are not attached to this Monthly Operating Report, but will be provided to the US Trustee.

FORM MOR-1April 2020

PAGE 2 OF 11



Schedule of Cash Receipts and Disbursements - March 30, 2020 - May 3, 2020 Federal Tax I.D. # 20-5942788MOR-1(Unaudited - $ in thousands)

Debtor CaseTotal Disbursements

Less: Transfers To Other Debtor In Possession Accounts

Plus:Estate Disbursements Made By Outside Sources (i.e. From Escrow Accounts)

Total Disbursements For Calculating U.S. Trustee Quarterly Fees

Fairway Group Holdings Corp., et al. 20-10161 - - - - Fairway Group Acquisition Company 20-10162 - - - - Fairway Bakery LLC 20-10163 - - - - Fairway Broadway LLC 20-10164 - - - - Fairway Chelsea LLC 20-10165 - - - - Fairway Construction Group, LLC (2741) 20-10166 - - - - Fairway Douglaston LLC 20-10167 - - - - Fairway East 86th Street LLC 20-10168 - - - - Fairway eCommerce LLC 20-10169 - - - - Fairway Georgetowne LLC 20-10170 - - - - Fairway Greenwich Street LLC 20-10171 - - - - Fairway Group Central Services LLC 20-10172 71,376 3,201 - 68,175 Fairway Group Plainview LLC 20-10173 - - - - Fairway Hudson Yards LLC 20-10174 - - - - Fairway Kips Bay LLC 20-10175 - - - - FN Store LLC 20-10176 - - - - Fairway Paramus LLC 20-10177 - - - - Fairway Pelham LLC 20-10178 - - - - Fairway Pelham Wines & Spirits LLC 20-10179 - - - - Fairway Red Hook LLC 20-10180 - - - - Fairway Stamford LLC 20-10181 - - - - Fairway Stamford Wines & Spirits LLC 20-10182 - - - - Fairway Staten Island LLC 20-10183 - - - - Fairway Uptown LLC 20-10184 - - - - Fairway Westbury LLC 20-10185 - - - - Fairway Woodland Park LLC 20-10186 - - - -


PAGE 3 OF 11



Statement of Operations - March 30, 2020 - May 3, 2020 Federal Tax I.D. # 20-5942788MOR-2(Unaudited - $ in thousands)

Fairway Broadway

LLC

Fairway Uptown LLC

Fairway Group

Plainview LLC

Fairway Red Hook LLC

Fairway Paramus LLC

Fairway Pelham LLC

Fairway Stamford LLC

Fairway East 86th Street

LLC

Fairway Douglaston

LLC

Fairway Woodland Park LLC

Fairway Westbury

LLC

Fairway Kips Bay LLC

Fairway Chelsea LLC

20-10164 20-10184 20-10173 20-10180 20-10177 20-10178 20-10181 20-10168 20-10167 20-10186 20-10185 20-10175 20-10165

Net Sales 7,320$ 5,527$ 3,508$ 4,660$ 3,134$ 5,517$ 4,218$ 7,266$ 5,792$ 4,019$ 5,155$ 4,707$ 2,380$ Cost of Goods Sold 4,490 3,712 2,490 3,156 2,209 3,919 2,902 4,456 4,079 2,851 3,667 2,972 1,507

Gross Profit 2,830 1,815 1,018 1,504 925 1,598 1,316 2,811 1,713 1,168 1,488 1,735 874

Operating Expenses:Operating Expenses 2,416 1,465 908 1,219 953 1,287 1,244 2,244 1,471 949 1,196 1,425 970 One-Time (Non-Recurring) - - - - - - - - - - - - - Depreciation/Amortization 60 25 (3) 69 62 109 76 110 136 8 101 120 3

Gain / (Loss) from Operations 354 324 114 215 (90) 201 (4) 456 106 211 191 191 (99)

Interest (Income) / Expense - - - - - - - - - - - - - Gain / (Loss) Before Income Taxes 354 324 114 215 (90) 201 (4) 456 106 211 191 191 (99)

Income Tax Provision - - - - - - - - - - - - -

Net Gain / (Loss) 354$ 324$ 114$ 215$ (90)$ 201$ (4)$ 456$ 106$ 211$ 191$ 191$ (99)$

EBITDA 414$ 350$ 110$ 284$ (28)$ 311$ 72$ 566$ 242$ 219$ 292$ 311$ (96)$


PAGE 4 OF 11



Statement of Operations - March 30, 2020 - May 3, 2020 Federal Tax I.D. # 20-5942788MOR-2(Unaudited - $ in thousands)

FN Store LLCFairway

Georgetowne LLC

Fairway eCommerce

LLC

Fairway Pelham Wines &

Spirits LLC

Fairway Stamford Wines &

Spirits LLC

Fairway Group Central Services LLC

Fairway Bakery LLC

Fairway Construction Group, LLC

(2741)

Fairway Group

Acquisition Company

Fairway Group

Holdings Corp., et al.

Fairway Greenwich Street LLC

Fairway Hudson

Yards LLC

Fairway Staten Island

LLC

20-10176 20-10170 20-10169 20-10179 20-10182 20-10172 20-10163 20-10166 20-10162 20-10161 20-10171 20-10174 20-10183

Net Sales -$ 3,277$ -$ 996$ 644$ -$ -$ -$ -$ -$ -$ -$ -$ 68,121$ Cost of Goods Sold - 2,407 - 786 448 - - - - - - - - 46,050

Gross Profit - 870 - 210 196 - - - - - - - - 22,071

Operating Expenses:Operating Expenses - 856 45 78 99 2,923 997 - - - - - - 22,746 One-Time (Non-Recurring) - 1,207 - - - 5,301 - - - - - - - 6,508 Depreciation/Amortization - 122 0 3 2 21 127 - 30 - - - - 1,182

Gain / (Loss) from Operations - (1,315) (45) 129 95 (8,244) (1,123) - (30) - - - - (8,364)

Interest (Income) / Expense - - - - - - - - 2,639 - - - - 2,639 Gain / (Loss) Before Income Taxes - (1,315) (45) 129 95 (8,244) (1,123) - (2,668) - - - - (11,003)

Income Tax Provision - - - - - - - - - - - - - -

Net Gain / (Loss) -$ (1,315)$ (45)$ 129$ 95$ (8,244)$ (1,123)$ -$ (2,668)$ -$ -$ -$ -$ (11,003)$

EBITDA -$ 14$ (45)$ 133$ 97$ (2,923)$ (997)$ -$ 0$ -$ -$ -$ -$ (675)$

Total

FORM MOR-2 (CONT.)April 2020

PAGE 5 OF 11



Balance Sheet as of May 3, 2020 Federal Tax I.D. # 20-5942788MOR-3(Unaudited - $ in thousands)

Fairway Broadway

LLC

Fairway Uptown LLC

Fairway Group

Plainview LLC

Fairway Red Hook LLC

Fairway Paramus LLC

Fairway Pelham LLC

Fairway Stamford LLC

Fairway East 86th Street

LLC

Fairway Douglaston

LLC

Fairway Woodland Park LLC

Fairway Westbury

LLC

Fairway Kips Bay LLC

Fairway Chelsea LLC

20-10164 20-10184 20-10173 20-10180 20-10177 20-10178 20-10181 20-10168 20-10167 20-10186 20-10185 20-10175 20-10165 ASSETS

Cash 1,159$ 854$ 500$ 719$ 456$ 869$ 631$ 1,042$ 975$ 651$ 744$ 642$ 262$ Accounts Receivable, Net 19 171 (4) 91 105 20 2 4 4 (0) 128 65 2 Inventory 856 652 896 975 1,029 619 817 488 559 1,115 966 620 426 Income Tax Receivable - - - - - - - - - - - - - Prepaid Expenses 628 381 317 857 144 212 110 696 557 132 118 527 355 Other Current Assets 34 (3) 0 1 0 (1) 0 1 0 0 (0) 7 2

Total Current Assets 2,697 2,056 1,710 2,643 1,735 1,720 1,560 2,231 2,096 1,898 1,956 1,862 1,048

Property and Equipment, Net 2,507 305 (45) 1,158 2,049 1,816 1,597 5,176 3,993 937 4,112 6,208 516 Intangible Assets, Net - - - - 1,525 - - - - 175 - - -

(a) Other Long-Term Assets 266,912 112,919 47,307 79,404 22,971 24,435 (14,537) 105,109 2,452 (12,615) 5,688 8,512 (6,756)

Total Assets 272,116$ 115,280$ 48,972$ 83,205$ 28,281$ 27,971$ (11,380)$ 112,516$ 8,540$ (9,605)$ 11,756$ 16,581$ (5,193)$

LIABILITIES AND EQUITY(b) Accounts Payable 3,219$ 2,187$ 1,782$ 1,847$ 1,318$ 2,128$ 1,818$ 3,125$ 2,736$ 1,670$ 2,231$ 1,815$ 989$

Current Portion of Long-Term Liabilities - - - - - - - - - - - - - Income Taxes Payable - - - - - - - - - - - - - Accrued Expenses 352 193 133 87 108 117 18 283 126 (21) 18 127 125 Deferred Income Taxes, Current - - - - - - - - - - - - -

Total Current Liabilities 3,571 2,380 1,915 1,934 1,426 2,246 1,836 3,408 2,861 1,650 2,250 1,942 1,114

Liabilities Subject to Compromise(b) Accounts Payable 2,164 1,165 1,152 1,494 611 1,073 875 1,944 2,019 742 982 1,034 730

Accrued Expenses 305 494 206 656 169 253 164 187 209 139 251 1,964 245 Accrued Payroll and Related - - - - - - - - - - - - - Other Liabilities - - - - - - - - - - - - -

Total Liabilities Subject to Compromise 2,469 1,659 1,358 2,151 780 1,326 1,039 2,131 2,228 881 1,233 2,998 975

Long-Term Debt - - - - - - - - - - - - - Deferred Income Taxes, Non-Current - - - - - - - - - - - - - Other Long-Term Liabilities 1,673 3 4 8 550 878 1,413 1,840 1,344 1,038 778 1,371 1,433

Total Liabilities 7,714 4,042 3,277 4,092 2,755 4,450 4,288 7,378 6,434 3,569 4,260 6,311 3,523

Stock - - - - - - - - - - - - - Additional Paid-In-Capital - - - - - - - - - - - - - Treasury Stock - - - - - - - - - - - - - Retained Earnings 264,402 111,238 45,694 79,113 25,526 23,521 (15,669) 105,137 2,107 (13,174) 7,496 10,271 (8,716)

Total Equity 264,402 111,238 45,694 79,113 25,526 23,521 (15,669) 105,137 2,107 (13,174) 7,496 10,271 (8,716)

Total Liabilities and Equity 272,116$ 115,280$ 48,972$ 83,205$ 28,281$ 27,971$ (11,380)$ 112,516$ 8,540$ (9,605)$ 11,756$ 16,581$ (5,193)$

Notes:(a) Long Term Assets include intercompany receivables / payables.(b) Negative balance in Central Services reflects unapplied payments, which Debtors are in the process of matching these payments with payables reflected in other Debtor entities.


PAGE 6 OF 11



Balance Sheet as of May 3, 2020 Federal Tax I.D. # 20-5942788MOR-3(Unaudited - $ in thousands)

FN Store LLCFairway

Georgetowne LLC

Fairway eCommerce

LLC

Fairway Pelham Wines &

Spirits LLC

Fairway Stamford Wines &

Spirits LLC

Fairway Group Central Services LLC

Fairway Bakery LLC

Fairway Construction Group, LLC

(2741)

Fairway Group

Acquisition Company

Fairway Group

Holdings Corp., et al.

Fairway Greenwich Street LLC

Fairway Hudson

Yards LLC

Fairway Staten Island

LLC

20-10176 20-10170 20-10169 20-10179 20-10182 20-10172 20-10163 20-10166 20-10162 20-10161 20-10171 20-10174 20-10183 ASSETS

Cash (1)$ 280$ 1$ 266$ 90$ 12,652$ -$ -$ 286$ -$ -$ -$ -$ 23,080$ Accounts Receivable, Net 2 39 - 31 8 2,155 642 - 0 - - - - 3,484 Inventory - - - 358 839 - 1,059 - - - - - - 12,275 Income Tax Receivable - - - - - 17 - - 0 - - - - 17 Prepaid Expenses 19 (95) - (61) (78) 2,227 116 - (3) - - - - 7,160 Other Current Assets 0 0 2 0 0 438 19 - 7 - - - - 509

Total Current Assets 20 224 3 594 858 17,489 1,836 - 291 - - - - 46,526

Property and Equipment, Net - - 1 72 55 3,174 9,954 - - - - - - 43,583 Intangible Assets, Net - - - - - - - - 32,879 - - - - 34,579

(a) Other Long-Term Assets (12,496) (7,508) (6,640) 7,135 4,262 (727,356) (76,158) - (254,680) 458,656 - - - 27,017

Total Assets (12,476)$ (7,283)$ (6,636)$ 7,802$ 5,175$ (706,693)$ (64,368)$ -$ (221,510)$ 458,656$ -$ -$ -$ 151,705$

LIABILITIES AND EQUITY(b) Accounts Payable 1$ 1,222$ -$ 683$ 376$ (22,627)$ 6,074$ -$ -$ -$ -$ -$ -$ 12,595$

Current Portion of Long-Term Liabilities - - - - - - - - - - - - - - Income Taxes Payable - - - - - - - - (0) (0) - - - (1) Accrued Expenses 18 88 55 18 61 5,964 102 - (591) (71) - - - 7,311 Deferred Income Taxes, Current - - - - - - - - - - - - - -

Total Current Liabilities 19 1,311 55 700 437 (16,663) 6,175 - (591) (72) - - - 19,906

Liabilities Subject to Compromise - (b) Accounts Payable 29 831 27 105 45 810 3,239 - - - - - - 21,070

Accrued Expenses 319 52 - 66 52 1,988 710 - 706 (10) - - - 9,126 Accrued Payroll and Related - - - - - 2,311 (0) - - - - - - 2,311 Other Liabilities - - - - (0) 727 - - - - - - - 727

Total Liabilities Subject to Compromise 348 882 27 171 97 5,837 3,948 - 706 (10) - - - 33,234

Long-Term Debt - - - - - (60) - - 252,490 - - - - 252,430 Deferred Income Taxes, Non-Current - - - - - 241 - - 1,541 - - - - 1,782 Other Long-Term Liabilities 517 - - 76 139 260 1,360 - - - - - - 14,683

Total Liabilities 885 2,193 82 947 674 (10,386) 11,484 - 254,146 (82) - - - 322,035

Stock - - - - - - - - - 0 - - - 0 Additional Paid-In-Capital - - - - - - - - 1,599 65,778 - - - 67,377 Treasury Stock - - - - - - - - - - - - - - Retained Earnings (13,361) (9,476) (6,718) 6,854 4,501 (696,308) (75,852) - (477,255) 392,960 - - - (237,707)

Total Equity (13,361) (9,476) (6,718) 6,854 4,501 (696,308) (75,852) - (475,656) 458,738 - - - (170,330)

Total Liabilities and Equity (12,476)$ (7,283)$ (6,636)$ 7,802$ 5,175$ (706,693)$ (64,368)$ -$ (221,510)$ 458,656$ -$ -$ -$ 151,705$

Notes:(a) Long Term Assets include intercompany receivables / payables.(b) Negative balance in Central Services reflects unapplied payments, which Debtors are in the process of matching these payments with payables reflected in other Debtor entities.

Total

FORM MOR-3 (CONT.)April 2020

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Status of Post-Petition Taxes and Unpaid Post-Petition Debts Federal Tax I.D. # 20-5942788MOR-4(Unaudited - $ in thousands)

The beginning tax liability should be the ending liability from the prior month or, if this is the first report, theamount should be zero.Attach photocopies of IRS Form 6123 or payment receipt to verify payment or deposit of federal payroll taxes.Attach photocopies of any tax returns filed during the reporting period.

FederalBeginning

Tax

Amount Withheld

and/or Accrued

Amount Paid Ending Tax

Withholding 241$ 1,098$ 895$ 444$ FICA-Employee 174 803 657 320 FICA-Employer 174 802 656 320 Unemployment 2 7 6 2 Total Federal Taxes 591$ 2,709$ 2,214$ 1,085$ State and LocalWithholding 146$ 670$ 546$ 271$ Sales 325 731 652 404 Unemployment 24 92 83 33 Real Property 2,785 542 269 3,057 Other: EE DI/FL 7 33 27 13 Total State and Local 3,287$ 2,068$ 1,577$ 3,778$

Total Taxes 3,877$ 4,777$ 3,790$ 4,863$

As of May 3, 2020

Accounts Payable (a)Debtor Case # 0-30 Days 31-60 Days 61-90 Days 91+ Days Total Accrued Expenses

Fairway Broadway LLC 20-10164 1,549$ 635$ 321$ 120$ 2,625$ 352$ Fairway Uptown LLC 20-10184 1,290 411 141 61 1,904 193 Fairway Group Plainview LLC 20-10173 759 219 139 6 1,123 133 Fairway Red Hook LLC 20-10180 936 304 122 (12) 1,350 87 Fairway Paramus LLC 20-10177 764 202 127 5 1,098 108 Fairway Pelham LLC 20-10178 1,166 275 137 23 1,600 117 Fairway Stamford LLC 20-10181 934 230 439 4 1,608 18 Fairway East 86th Street LLC 20-10168 1,390 538 261 24 2,214 283 Fairway Douglaston LLC 20-10167 1,178 370 167 14 1,730 126 Fairway Woodland Park LLC 20-10186 1,025 180 103 5 1,313 (21) Fairway Westbury LLC 20-10185 1,199 340 155 8 1,703 18 Fairway Kips Bay LLC 20-10175 918 390 145 77 1,530 127 Fairway Chelsea LLC 20-10165 446 278 91 6 820 125 FN Store LLC 20-10176 - - - - - 18 Fairway Georgetowne LLC 20-10170 561 335 135 15 1,045 88 Fairway eCommerce LLC 20-10169 - - - - - 55 Fairway Pelham Wines & Spirits LLC 20-10179 491 14 10 - 516 18 Fairway Stamford Wines & Spirits LLC 20-10182 321 53 2 (0) 375 61 Fairway Group Central Services LLC 20-10172 (8,849) (8,799) (3,147) (445) (21,240) 5,964 Fairway Bakery LLC 20-10163 2,931 563 1,237 22 4,752 102 Fairway Construction Group, LLC (2741) 20-10166 - - - - - - Fairway Group Acquisition Company 20-10162 6 0 - - 7 (591) Fairway Group Holdings Corp., et al. 20-10161 - - - - - (71) Fairway Greenwich Street LLC 20-10171 - - - - - - Fairway Hudson Yards LLC 20-10174 - - - - - - Fairway Staten Island LLC 20-10183 - - - - - -

Total 9,014$ (3,460)$ 587$ (67)$ 6,074$ 7,311$

Notes:

STATUS OF POST-PETITION TAXES

SUMMARY OF UNPAID POST-PETITION DEBTS

(a) A negative balance is depicted for Fairway Group Central Services LLC because the Company is in the process of reconciling unapplied prepayments. Therefore, although there appears to be a delinquent balance now, once all unapplied prepayments are reconciled, the Debtors believe they will not show any delinquent post-petition payables. The prepayments will offset balances depicted in aged categories of other entities.


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Accounts Receivable and Taxes Reconciliation and Aging Federal Tax I.D. # 20-5942788MOR-5(Unaudited - $ in thousands)

Amount3,426$

3,484$

Accounts Receivable Aging as of 5/3/2020 0-30 Days 31-60 Days 61-90 Days 91+ Days TotalRebates 1,391$ $ 95 $ 184 $ 119 $ 1,790 Wholesale 175 117 128 258 677 Other (a) (b) 1,105

Less: Bad Debts (Amount considered uncollectible) (88)

Net Accounts Receivable $ 1,566 $ 212 $ 312 $ 377 $ 3,484

Notes:(a) Agings are not maintained for Other Accounts Receivable (eg, not Rebates or Wholesale).(b) Includes $375K related to store catering orders.

Taxes Payable as of 5/3/2020 0-30 Days 31-60 Days 61-90 Days 91+ Days TotalFederal $ 1,085 -$ $ - -$ 1,085$ State and Local 3,778 - - - 3,778 Total Taxes Payable $ 4,863 -$ $ - -$ 4,863$

ACCOUNTS RECEIVABLE RECONCILIATION AND AGING

TAXES RECONCILIATION AND AGING

Accounts Receivable ReconciliationTotal Accounts Receivable at the beginning of the reporting periodPlus: Amounts billed during the periodLess: Amounts collected during the period Total Accounts Receivable at the end of the reporting period

58


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Payments to Insiders and Professionals Federal Tax I.D. # 20-5942788MOR-6(Unaudited - in whole $)

Of the total disbursements shown on the Cash Receipts and Disbursements Report (MOR-1) list the amount paid to insiders (as defined in Section 101(31) (A)-(F) of the U.S. Bankruptcy Code) and to professionals. For payments to insiders, identify the type of compensation paid(e.g. Salary, Bonus, Commissions, Insurance, Housing Allowance, Travel, Car Allowance, Etc.). Attach additional sheets if necessary.

Amount Paid Total Paid to DatePayroll and Benefits 409,971$ 907,738$

NAME

DATE OF COURT ORDER

AUTHORIZING PAYMENT (a)

AMOUNT APPROVED AMOUNT PAID

TOTAL PAID TO DATE

TOTAL INCURRED & UNPAID (b)

Mackinac Partners 3/3/2020 490,459$ 490,459$ 490,459$ -$ Omni Management Group 3/3/2020 148,593 148,593 148,593 - PJ SOLOMON 3/3/2020 140,207 - - 170,207 Weil, Gotshal & Manges LLP 3/3/2020 1,593,816 1,593,816 1,593,816 380,085

2,373,074$ 2,232,867$ 2,232,867$ 550,291$

Notes:(a) Represents date of the court’s entry of the interim compensation order (ECF 235).(b) Total Incurred & Unpaid is based on fees and expenses incurred through April 30.

NAME OF CREDITOR

SCHEDULED MONTHLY

PAYMENT DUEAMOUNT PAID

DURING MONTHTOTAL UNPAID POST-PETITION

N/A

AND ADEQUATE PROTECTION PAYMENTS

TOTAL PAYMENTS

PAYMENTS TO INSIDERS AND PROFESSIONALS

PROFESSIONALS

TOTAL PAYMENTS TO PROFESSIONALS

POST-PETITION STATUS OF SECURED NOTES, LEASES PAYABLE

(1) Represents payments made by the Debtors persons considered “insiders” under the Bankruptcy Code during the reporting period. The total is shown on a cash basis, reflecting the actual amounts received, net of any applicable taxes, withholdings or other deductions. The total includes regular payroll, fees and expense reimbursements.

(2) Persons included as “insiders” have been included for informational purposes only. The Debtors do not concede or take any position with respect to: (a) such person’s influence over the control of the Debtors; (b) the management responsibilities or functions of such individual; (c) the decision-making or corporate authority of such individual; or (d) whether such individual could successfully argue that he or she is not an “insider” under applicable law, including, without limitation, the federal securities laws or with respect to any theories of liability or for any other purpose. Further, the inclusion of a party as an “insider” in not an acknowledgement or concession that such party is an “insider” under applicable bankruptcy law.

INSIDER PAYMENT SUMMARY


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Debtor Questionnaire Federal Tax I.D. # 20-5942788MOR-7(Unaudited)

Must be completed each month. If the answer to any of the questions is “Yes”, provide a detailed explanation of each item. Attach additional sheets if necessary.

Yes No

1) Have any assets been sold or transferred outside the normal course of business this reporting period? x

2) Have any funds been disbursed from any account other than a debtor in possession account this reporting period? x

3) Is the Debtor delinquent in the timely filing of any post-petition tax returns? x

4)Are workers compensation, general liability or other necessary insurance coverages expired or cancelled, or has the debtor received notice of expiration or cancellation of such policies?

x

5) Is the Debtor delinquent in paying any insurance premium payment? x

6) Have any payments been made on pre-petition liabilities this reporting period? x

7) Are any post petition receivables (accounts, notes or loans) due from related parties? x

8) Are any post petition payroll taxes past due? x9) Are any post petition State or Federal income taxes past due? x

10) Are any post petition real estate taxes past due? x11) Are any other post petition taxes past due? x12) Have any pre-petition taxes been paid during this reporting period? x13) Are any amounts owed to post petition creditors delinquent? x14) Are any wage payments past due? x

15) Have any post petition loans been received by the Debtor from any party? x

16) Is the Debtor delinquent in paying any U.S. Trustee fees? x

17) Is the Debtor delinquent with any court ordered payments to attorneys or other professionals? x

18) Have the owners or shareholders received any compensation outside of the normal course of business? x

1)

6)

13)

DEBTOR QUESTIONNAIRE

Have any assets been sold or transferred outside the normal course of business this reporting period? On April 29, 2020 the Bankruptcy Court entered (a) the Order (I) Approving Asset Purchase Agreement Among the Debtors and Village Super Market, Inc.; (II) Authorizing Sale of Certain of the Debtors’ Asset Free and Clear of Liens, Claims, Interests, and Encumbrances; (III) Authorizing Assumption and Assignment of Certain Executory Contracts and Leases in Connection Therewith; and (IV) Granting Related Relief (ECF No. 449), approving the sale of the Company’s Pelham, Chelsea, Upper East Side, Upper West Side, Kips Bay stores, the Harlem Parking Lot and the Production and Distribution Center to Village Super Market, Inc.; (b) the Order (I) Approving Asset Purchase Agreements Among the Debtors and Amazon Retail LLC; (II) Authorizing Sale of Certain of the Debtors’ Assets Free and Clear of Liens, Claims Interests, and encumbrances; (III) Authorizing Assumption and Assignment of Certain Executory Contracts and Unexpired Leases in Connection Therewith; and (IV) Granting Related Relief (ECF No. 445), approving the sale of the Company’s Paramus and Woodland Park leases to Amazon Retail LLC; and (c) the Order (I) Approving Asset Purchase Agreement Among the Debtors and Seven Seas Georgetowne, LLC; (II) Authorizing Sale of Certain of the Debtors’ Assets Free and Clear of Liens, Claims, Interests, and Encumbrances; (III) Authorizing Assumption and Assignment of Certain Executory Contracts and Unexpired Leases in Connection Therewith; and (IV) Granting Related Relief (ECF No. 448) approving the sale of the Company’s Georgetowne store to Seven Seas Georgetowne, LLC (the “Key Food Sale Transaction”). The Key Food Sale Transaction closed on May 1, 2020, during the reporting period. The impact from the Key Food Sale Transaction are reflected in this MOR.

Have any payments been made on pre-petition liabilities this reporting period?Payments have been made pursuant to certain First Day Orders including payments to certain prepetition (a) service fees and charges assessed by the Debtors’ banks and debit and credit card companies; (b) claims of warehousemen and miscellaneous lien claimants; (c) certain insurance obligations; (d) obligations to “critical vendors;” (e) customer programs obligations; (f) employee wages, salaries, and related items, including employee benefit programs and independent contractor obligations; (g) taxes and assessments; and (h) amounts held in trust or on a consignment basis where the Debtor has collected on behalf of a third party.

Are any amounts owed to post petition creditors delinquent?As noted in MOR-4, significant prepayments are in the process of being applied at Fairway Group Central Services LLC and thus system reporting shows amounts that appear delinquent. Once prepayments are applied correctly, the Debtors’ reports will more accurately reflect the status of their payables.


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EXHIBIT 1:

List of Bank Accounts and Bank Balances


Cash Management System Flow of Funds Diagram

COLLECTION ACCOUNTS CONCENTRATION ACCOUNTS DISBURSEMENT ACCOUNTS

Fairway Broadway LLC (Acct#: 1737)Fairway Uptown LLC (Acct#: 1745)

Fairway Group Plainview LLC (Acct#: 1753)Fairway Red Hook LLC (Acct#: 1761)Fairway Paramus LLC (Acct#: 1788)Fairway Pelham LLC (Acct#: 1796)

Fairway Stamford LLC (Acct#: 1818)Fairway East 86th Street LLC (Acct#: 1826) Payroll Disbursements Accounts

Fairway Douglaston LLC (Acct#: 1834)Fairway Woodland Park LLC (Acct#: 1842)

Fairway Westbury LLC (Acct#: 1850) ZBA auto funded

Fairway Kips Bay LLC (Acct#: 1869)Fairway Chelsea LLC (Acct#: 1877)Fairway Nanuet LLC (Acct#: 1885)

Fairway Georgetowne LLC (Acct#: 1893)

Accounts Payable Disbursement AccountsOTHER ACCOUNTS

ZBA autofunded

Fairway eCommerce LLC (Acct#: 1958)

Bottle Deposits Disbursement Accounts

Manually funded

Fairway Group Central Services LLC - NY Bottle Deposits (Acct#: 7247)

Fairway Group Central Services LLC - CT Bottle Deposits (Acct#: 7255)

* Cash typically flows in the manner and diection indicated above, in certain infrequent instances (fees and chargebacks, bounced checks, etc) cash can flow the opposite direction.

Fairway Stamford Wines & Spirits LLC (Acct#: 1915)

Fairway Group Central Services LLC (Acct#: 1923)

Fairway Group Central Services LLC - Disbursement (Acct#: 2008)

Fairway Group Central Services LLC (Acct#: 7018)

Fairway Group Central Services LLC - ACH Disbursement (Acct#: 2016)Fairway Group Central Services LLC - Catering

(Acct#: 2059)

Fairway Pelham Wines & Spirits LLC (Acct#: 1907)

Fairway Group Acquisition Company (Acct#: 1931)

Fairway Group Central Services LLC - Ulti Pro Wage Garnish (Acct#: 2024)Fairway Group Central Services LLC Operating

(Acct#: 1990) Fairway Group Central Services LLC - Ulti Pro Payroll (Acct#: 2032)

Fairway Group Central Services LLC - Ulti Pro Taxes (Acct#: 2040)


Fairway Group Holdings Corp.Cash Balance ReportApril 2020 Month End

Company# AccountFinancial

Institution Description

Last Four Digits of Account Number April Balance

1001 Fairway Broadway LLC Citizens Depository 1737 -$ 1002 Fairway Uptown LLC Citizens Depository 1745 - 1003 Fairway Group Plainview LLC Citizens Depository 1753 - 1004 Fairway Red Hook LLC Citizens Depository 1761 - 1005 Fairway Paramus LLC Citizens Depository 1788 - 1006 Fairway Pelham LLC Citizens Depository 1796 - 1007 Fairway Stamford LLC Citizens Depository 1818 - 1008 Fairway East 86th Street LLC Citizens Depository 1826 - 1009 Fairway Douglaston LLC Citizens Depository 1834 - 1010 Fairway Woodland Park LLC Citizens Depository 1842 - 1011 Fairway Westbury LLC Citizens Depository 1850 - 1012 Fairway Kips Bay LLC Citizens Depository 1869 - 1013 Fairway Chelsea LLC Citizens Depository 1877 - 1014 Fairway Nanuet LLC Citizens Depository 1885 N/A1017 Fairway Georgetowne LLC Citizens Depository 1893 - 2006 Fairway Pelham Wines & Spirits LLC Citizens Depository 1907 - 2007 Fairway Stamford Wines & Spirits LLC Citizens Depository 1915 - 9901 Fairway Group Central Services LLC Citizens Gift Card 1923 - 9950 Fairway Group Acquisition Company Citizens Operating 1931 286,018.87 (a)1999 Fairway eCommerce LLC Citizens Depository 1958 - 9901 Fairway Group Central Services LLC - Operating Citizens Operating 1990 13,745,972.87 (a)9901 Fairway Group Central Services LLC - Disbursement Citizens Disbursement 2008 - 9901 Fairway Group Central Services LLC - ACH Disbursement Citizens ACH Disbursement 2016 - 9901 Fairway Group Central Services LLC - Ulti Pro Wage Garnish Citizens Payroll 2024 - 9901 Fairway Group Central Services LLC - Ulti Pro Payroll Citizens Payroll 2032 - 9901 Fairway Group Central Services LLC - Ulti Pro Taxes Citizens Payroll 2040 - 9901 Fairway Group Central Services LLC - Catering Citizens Depository 2059 - 9901 Fairway Group Central Services LLC Citizens Cash Collateral 7018 12,015,625.24 (b)9901 Fairway Group Central Services LLC Citizens Prof Fee (BK) 9893 7,467,132.52 (c)9901 Fairway Group Central Services LLC Citizens Utility (BK) 9907 730,926.25 (a)

Total 34,245,675.75$ Notes:(a) General Operating Cash

Fairway Group Central Services LLC - Operating (1990) 13,745,972.87 Fairway Group Acquisition Company (1931) 286,018.87 Fairway Group Central Services LLC (9907) 730,926.25 General Operating Cash 14,762,917.99$

(b) The Cash Collateral account collateralizes the Company's LC's and accordingly is accounted for in Other Assets in the Company's books and records.(c) The segregated Professional Fee account is represented in MOR-1 in the carve-out amount depicted below General Operating Cash.

The Company closes its books and records on the Sunday closest to month end, which was May 3, 2020. The Company's month end balances are inclusive of weekend activity (through May 3). While Citizen's Bank also uses a May 3 cutoff, its May 3 balance excludes weekend activity, thus technically representing a May 1 balance. This creates the reconciling difference between the bank statements ($14,762,918 above) and bank cash represented on MOR-1 ($19,162,440).


20-10161-jlg doc 484 filed 05/15/20 entered …...held in trust or on a consignment basis where the...

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