20-12117-mew doc 12 filed 09/11/20 entered 09/11/20 00:18 ... · new postpetition insurance...
TRANSCRIPT
MINTZ & GOLD LLP
600 Third Avenue, 25th Floor
New York, New York 10016
Telephone: (212) 696-4848
Facsimile: (212) 696-1231
Andrew R. Gottesman, Esq.
Maria E. Garcia, Esq.
Gabriel Altman, Esq.
Proposed Attorneys for the Debtors
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
In re:
COSMOLEDO, LLC, et al.1
Debtors.
Chapter 11
Case No. 20-12117 ( )
(Joint Administration Pending)
MOTION OF THE DEBTORS FOR ENTRY OF ORDER (I) AUTHORIZING THE
DEBTORS TO (A) MAINTAIN INSURANCE POLICIES (B) MAINTAIN
PREPETITION INSURANCE BROKERAGE AGREEMENTS, AND ENTER INTO
NEW POSTPETITION INSURANCE BROKERAGE AGREEMENTS AND (C) PAY
PREPETITION INSURANCE OBLIGATIONS, INCLUDING OBLIGATIONS OWED
FOR DEBTORS’ INSURANCE POLICIES; AND (II) GRANTING RELATED RELIEF
Cosmoledo, LLC (“Cosmoledo”), and its affiliated debtors and debtors in possession in the
above-captioned cases (collectively the “Debtors”), by and through its proposed counsel, Mintz &
Gold LLP, hereby move the Court for entry of an interim order, substantially in the form annexed
hereto (the “Proposed Order”), pursuant to sections 105(a) and 363 of title 11 of the United States
1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax
identification number, include: Cosmoledo, LLC (6787); Breadroll, LLC, (3279); 688 Bronx Commissary, LLC
(6515); 95 Broad Commissary, LLC (2335); 178 Bruckner Commissary, LLC (2581); 8 West Bakery, LLC (6421);
NYC 1294 Third Ave Bakery, LLC (2001); 921 Broadway Bakery, LLC (2352); 1800 Broadway Bakery, LLC (8939);
1535 Third Avenue Bakery, LLC (1011); 2161 Broadway Bakery, LLC (2767); 210 Joralemon Bakery, LLC (4779);
1377 Sixth Avenue Bakery, LLC (9717); 400 Fifth Avenue Bakery, LLC (6378); 1400 Broadway Bakery, LLC
(8529); 575 Lexington Avenue Bakery, LLC (9884); 685 Third Avenue Bakery, LLC (9613); 370 Lexington Avenue
Bakery, LLC (0672); 787 Seventh Avenue Bakery, LLC (6846); 339 Seventh Avenue Bakery, LLC (1406); and 55
Hudson Yards Bakery, LLC (7583).
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Code (the “Bankruptcy Code”), and Rule 6004 of the Federal Rules of Bankruptcy Procedure (the
“Bankruptcy Rules”) (a) authorizing the Debtors to (i) continue prepetition insurance coverage and
enter into new policies, (ii) maintain prepetition premium financing agreements and enter into new
post-petition premium financing agreements, (iii) maintain insurance brokerage agreements and
enter into new post-petition insurance brokerage agreements, and (iv) pay all insurance obligations
in the Debtors’ sole discretion, on account of the Debtors’ insurance coverages provided through
various group insurance policies; and (b) authorizing and directing financial institutions to receive,
process, honor, and pay checks presented for payment and electronic payment requests related
thereto; and (c) granting related relief.
In support of the Motion, the Debtors rely upon and incorporate by reference the
declaration of Jose Alcalay, Chief Executive Officer of Cosmoledo, LLC in Support of Chapter 11
Petitions and First Day Pleadings (the “1007 Declaration”), filed with the Court concurrently
herewith and, respectfully represent as follows:
JURISDICTION AND VENUE
1. This Court has jurisdiction to consider this Motion under 28 U.S.C. §§ 157 and
1334. This is a core proceeding under 28 U.S.C. § 157(b). Venue of this case and this Motion in
this district is proper under 28 U.S.C. §§ 1408 and 1409.
2. The statutory predicates for the relief requested herein are Bankruptcy Code
sections 105, 345 and 363 and Bankruptcy Rules 6003 and 6004.
BACKGROUND
3. On September 10, 2020 the Debtors filed voluntary petitions for relief under chapter
11 of the Bankruptcy Code (the “Petition Date”).
4. The Debtors continue to operate their business and manage their property as debtors
and debtors in The Debtors continue to operate their business and manage their property as a
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debtors and debtors in possession pursuant to Bankruptcy Code §§ 1107(a) and 1108.
Contemporaneously herewith, the Debtors have requested joint administration of these chapter 11
cases. No trustee or examiner has been appointed in this case. No official committee of unsecured
creditors has been appointed.
5. The Debtors own and operate sixteen (16) fine casual bakery cafés in New York
City under the trade name “Maison Kayser.” Maison Kayser, a global brand, is an authentic
artisanal French boulangerie that has been doing business in New York since 2012. Despite its
loyal customer base, the Debtors’ production and operational costs required a reorganization of
their production facilities and store level management that was completed throughout 2019 into
early 2020. At approximately the same time this restructuring was nearing completion, Governor
Cuomo declared a state of emergency for the State of New York which required the Debtors to
temporarily cease operations.2 The Debtors determined that there was too great a risk that future
operations would fail to generate sufficient capital to repay their obligations in the ordinary course
of business and continue profitable operations in the near term. Accordingly, the Debtors decided
to not reopen their cafés and began seeking restructuring alternatives in mid-July.
6. The Debtors filed these cases to seek approval of a sale of the Debtor’s assets and
effectuate an orderly liquidation of the remainder of their assets. These cases are necessary to
protect the Debtors’ assets in order to maximize the value of their estates. Without the protection
available under of the Bankruptcy Code, the Debtors would undoubtedly face the immediate and
irreparable reduction of their asset base, including their interests under the non-residential leases
for many of their stores. The Debtors also face the potentially exorbitant cost of state court
litigation by multiple unpaid creditors. The Debtors filed a motion, concurrently herewith, for
2 See New York State Exec. Order No. 202, dated March 7, 2020.
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approval of bidding procedures and ultimately a sale of substantially all of their assets (the “363
Motion”). The Debtors hope to have the 363 Motion approved and the sale contemplated therein
quickly and follow a closing with confirmation of a liquidating plan.
7. Additional facts regarding the Debtors’ business, the events leading up to the
Petition Date and the facts and circumstances supporting the relief requested herein are set forth
in the 1007 Declaration.
THE DEBTORS’ INSURANCE POLICIES
8. The Debtors maintain various liability, property, casualty, workers’ compensation,
and other insurance programs in the ordinary course of their businesses, which are maintained on
a group basis (collectively, the “Insurance Policies”) that are provided and/or administered by
multiple third-party insurance carriers (collectively, the “Insurance Carriers”). The Insurance
Programs include coverage for, among other things, professional liability, operation of
automobiles, workers’ compensation,3 crime, breach of fiduciary duty by officers or directors,
cyber security, property damage and business interruption, contaminated products, and various
other general liability coverages.
9. A schedule of the current Insurance Policies, policy terms, and annual premium
amounts is attached hereto as Exhibit A.4 In general terms, the Debtors’ coverage can be described
as follows:
3 To the extent such authority is not already covered by the Motion of Debtors Pursuant to 11 U.S.C 105(a)
363(b), 507(a) and For Entry of Interim and Final Orders Authorizing (a) Payment of Prepetition Wages, Salaries,
Employee Benefits, and Other Compensation, (b) Maintenance of Employee Benefit Programs and Directing Financial
Institutions to Honor and Process Checks and Transfers Related to Such Obligations, which is being filed
contemporaneously herewith, Debtors seek authority to maintain workers’ compensation coverage and to pay
prepetition amounts related thereto pursuant to this Motion.
4 The Insurance Policies are sometimes maintained on an enterprise basis and can include coverage for one or
more Debtors. To the extent that a policy covers more than one legal entity, the Debtors generally allocate the cost to
the applicable legal entity in their books and records. Furthermore, although Exhibit A is intended to be
comprehensive, Debtors may have inadvertently omitted one or more Insurance Policies. By this Motion, Debtors
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a. D&O Insurance. The Debtors maintain two insurance policies for their directors
and officers (collectively, the “D&O Insurance Policies”). The D&O Insurance
Policies run through January 17, 2021, with the extended reporting policy running
through January 17, 2027.
b. Liability and Property Insurance. The Debtors maintain general commercial
liability and property insurance policies that provide coverage relating to, among
other things, personal injury liability, property damage, advertising injury,
environmental liability, voluntary compensation liability, cybersecurity issues,
workers’ compensation liability, and travel and automobile-related liability
(collectively, the “Liability Insurance Policies”). The Liability Insurance Policies
also include umbrella insurance coverage and excess liability policies. These
policies run through October 19, 2020.
c. Workers’ Compensation Insurance. The Debtors maintain workers’ compensation
coverage for Debtors’ employees, which is largely administered on an enterprise
basis. These policies run through October 19, 2020.
10. The Debtors employ Schechner Lifson Corporation (the “Broker”) to assist them
with the procurement and management of the Insurance Policies. Amounts due to the Broker are
paid to it through the premiums the Debtors pay to Insurance Carriers (the “Broker’s Fees”). The
employment of the Broker allows the Debtors to obtain and manage the Insurance Policies in a
reasonable and prudent manner and to realize considerable savings in the procurement of such
policies. Accordingly, the Debtors believe that it is in the best interest of the creditors and Debtors’
estates to continue their business relationships with the Broker. After review of their books and
records, the Debtors believe that as of the Petition Date, they do not owe any amounts to the Broker
on account of fees, commissions, or any other prepetition obligations. Nonetheless, in an
abundance of caution, in addition to authorizing the continuation of the Insurance Policies in the
ordinary course of business, the Debtors also seek authority to honor any amounts owed to the
Brokers to ensure uninterrupted coverage under their Insurance Policies.
request relief applicable to all Insurance Policies, regardless of whether such Insurance Policy is specifically identified
on Exhibit A.
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11. The Debtors’ aggregate annual insurance premiums under all of the Insurance
Policies total approximately $1.1 million, not including additional expenses and/or fees. As of the
Petition Date, the Debtors do not owe any amounts on account of prepetition insurance premiums.
12. Finally, pursuant to the Insurance Policies, the Debtors are required to pay various
deductibles and/or self-insured retention amounts (collectively, the “Insurance Deductibles”)
depending upon the type of claim and insurance policy involved. As of the Petition Date, the
Debtors do not believe that any prepetition obligations relating to Insurance Deductibles exist.
RELIEF REQUESTED
13. By this Motion, the Debtors request entry of the Proposed Order, substantially in
the form attached hereto, pursuant to sections 105(a), 362(d), 363(b)(1), 363(c)(1), and 364(c) of
the Bankruptcy Code, (a) authorizing, but not directing, the Debtors to (i) continue prepetition
insurance coverage and enter into new policies, (ii) maintain insurance brokerage agreements and
enter into new post-petition insurance brokerage agreements, and (iii) pay all insurance obligations
in the Debtors’ sole discretion, all amounts and obligations on account of prepetition insurance
premiums, Insurance Deductibles, Broker’s Fees, deductibles, taxes, charges, and other obligations
owed under or with respect to the Insurance Policies; and (b) authorizing and directing financial
institutions to receive, process, honor, and pay checks presented for payment and electronic
payment requests related thereto; and (c) granting related relief.
BASIS FOR RELIEF REQUESTED
A. Continuing the Insurance Policies and Paying All Insurance Obligations Is Necessary
to Preserve the Value of the Debtors’ Estates
14. The nature of the Debtors’ businesses makes it essential for the Debtors to maintain
their Insurance Policies on an ongoing and uninterrupted basis. The non-payment of any premiums,
deductibles, or related fees under the Insurance Policies could result in one or more of the
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Insurance Carriers (a) terminating the existing policies, (b) declining to renew the Insurance
Policies, or (c) refusing to enter into new insurance agreements with the Debtors in the future. If
any of the Insurance Policies lapse without renewal, the Debtors could be in violation of state
and/or federal law and be exposed to substantial liability for personal and/or property damages, to
the detriment of all parties in interest.
15. Therefore, the Insurance Policies are critical to the preservation of the Debtors’
property and business’s value which is necessary to support a sale.
16. Although the Debtors believe they are current on their prepetition obligations under
their Insurance Policies, it is possible that some prepetition obligations may still be outstanding.
In the event a prepetition obligation (a “Proposed Insurance Payment”) is owed to an Insurer or in
accordance with any of the Debtors’ Insurance Policies, Debtors will file a notice in the docket of
these cases (a “Proposed Insurance Payment Notice”) indicating, (a) the party to whom any
Proposed Insurance Payment is to be made, (b) the address for such party, (c) the amount of the
Proposed Insurance Payment and (d) the basis for the Proposed Insurance Payment. The Debtors
shall also serve any Proposed Payment Notice on the parties receiving notice of this Motion (the
“Notice Parties”).
17. The Debtors hereby request that the Court require any objection to the payment in
the Proposed Insurance Payment Notice be filed on the docket of these cases and served on the
Notice Parties and the party to whom payment is to be made no later than five (5) days after service
of the Proposed Insurance Payment Notice. The Debtors hereby request authority to make the
Proposed Insurance Payment if no objections are received, pursuant to the procedure outlined
above. In the event any objections to a Proposed Insurance Payment Notice is received, they will
request a hearing with respect to the dispute on no less than ten (10) days’ notice.
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18. Furthermore, Debtors recognize that additional insurance premiums will become
due and owing post-petition. Any interruption in insurance coverage could expose the Debtors to
serious risks, such as (a) incurring direct liability for claims, material costs, and other losses that
would have been payable by the Insurance Carriers under the Insurance Policies, and (b) higher
costs to re-establish lapsed policies or obtain new insurance coverage. In light of the Debtors’
anticipated consummation of a sale of Debtors’ operations (as described in greater detail in the
363 Motion), these concerns are even more acute.
B. The Continuation of the Insurance Programs and the Payment of the Insurance
Obligations Is Justified and Should Be Authorized
19. The Court may grant the relief requested herein, including the proposed
maintenance, continuance, and renewal of the Insurance Programs under sections 105(a), 363(b)
and 363(c) of the Bankruptcy Code.
20. Section 363(c) of the Bankruptcy Code authorizes a debtor-in-possession operating
its business pursuant to section 1108 of the Bankruptcy Code to use property of the estate in the
ordinary course of business without notice or hearing. The Debtors respectfully submit that
maintaining and renewing the Insurance Policies and obtaining replacement or additional
coverage, as needed, would be in the ordinary course of business pursuant to sections 363(c),
1107(a), and 1108 of the Bankruptcy Code, and would be allowed without further application to
the Court. Nonetheless, out of an abundance of caution, the Debtors are seeking the Court’s
authorization to continue to maintain and perform their obligations under the Insurance Policies in
the ordinary course of business, and obtain additional coverage, as needed.
21. In addition, to the extent applicable, section 363(b) of the Bankruptcy Code permits
a court to authorize Debtors to pay certain prepetition claims. Section 363(b)(1) provides that
“[t]he trustee, after notice and a hearing, may use, sell, or lease, other than in the ordinary course
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of business, property of the estate . . . .” 11 U.S.C. § 363(b)(1); see Official Comm. of Unsecured
Creditors v. LTV Corp. (In re Chateaugay Corp.), 973 F.2d 141, 143 (2d Cir. 1992); In re Filene’s
Basement, LLC, No. 11-13511 (KJC), 2014 WL 1713416, at *12 (Bankr. D. Del. Apr. 29, 2014).
To permit payment of prepetition claims, a court must conclude that the debtor has “articulate[d]
some business justification, other than the mere appeasement of major creditors . . . .” In re
Ionosphere Clubs, Inc., 98 B.R. 174, 175 (Bankr. S.D.N.Y. 1989).
22. Courts in this jurisdiction have approved relief similar to the relief requested in this
Motion, generally acknowledging that it is appropriate to authorize the payment of prepetition
obligations where necessary to protect and preserve the estate, including an operating business’s
going-concern value. See In re Ionosphere Clubs, Inc., 98 B.R. at 175 (granting authority to pay
prepetition wages); Armstrong World Indus., Inc. v. James A. Phillips, Inc. (In re James A. Phillips,
Inc.), 29 B.R. 391, 398 (S.D.N.Y. 1983) (granting authority to pay prepetition claims of suppliers);
see also In re CoServ, L.L.C., 273 B.R. 487, 497 (Bankr. N.D. Tex. 2002). In doing so, these courts
acknowledge that several legal theories rooted in sections 105(a) and 363(b) of the Bankruptcy
Code support the payment of prepetition claims as provided herein.
23. Pursuant to section 363(b) of the Bankruptcy Code, courts may authorize payment
of prepetition obligations where a sound business purpose exists for doing so. See In re Ionosphere
Clubs, 98 B.R. at 175 (noting that section 363(b) provides “broad flexibility” to authorize a debtor
to honor prepetition claims where supported by an appropriate business justification); see also
James A. Phillips, Inc., 29 B.R. at 397 (relying upon section 363 as a basis to allow a contractor to
pay the prepetition claims of suppliers who were potential lien claimants). Indeed, courts have
recognized that there are instances when a debtor’s fiduciary duty can “only be fulfilled by the
pre-plan satisfaction of a prepetition claim.” In re CoServ, 273 B.R. at 497.
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24. Implicit in the fiduciary duties of any debtor-in-possession is the obligation to
“protect and preserve the estate, including an operating business’s going concern value.” In re
CoServ, 273 B.R. at 497. Some courts note that there are instances in which a debtor can fulfill
this fiduciary duty “only . . . by the preplan satisfaction of a prepetition claim.” Id. The court in
CoServ specifically noted the pre plan satisfaction of prepetition claims would be a valid exercise
of the debtor’s fiduciary duty when the payment “is the only means to effect a substantial
enhancement of the estate . . . .” Id. Consistent with a debtor’s fiduciary duties, courts have also
authorized payment of prepetition obligations under section 363(b) of the Bankruptcy Code where
a sound business purpose exists for doing so. See, e.g., In re Ionosphere Clubs, 98 B.R. at 175.
25. Moreover, Section 1112(b)(4)(C) of the Bankruptcy Code provides that “failure to
maintain appropriate insurance that poses a risk to the estate or to the public” is “cause” for
mandatory conversion or dismissal of a chapter 11 case. 11 U.S.C. § 1112(b)(4)(C). Similarly,
certain of the Insurance Policies are required by various state and federal regulations. In addition,
the Operating Guidelines and Reporting Requirements for Debtors in Possession and Trustees (the
“U.S. Trustee Guidelines”)5 require that a debtor “shall maintain” certain types of insurance
coverage following the Commencement Date, including the kind Debtors seek to maintain here.
See U.S. Trustee Guidelines, § 6.
26. Therefore, the Debtors believe that it is essential to their estates, and consistent with
the Bankruptcy Code and the U.S. Trustee’s Operating Guidelines, to maintain and continue to
make all payments required under their Insurance Policies and have the authority to supplement,
5 The U.S. Trustee’s guidelines for Region 2 can be found at https://www.justice.gov/ust-regions-
r02/file/region_2_operating_guidelines.pdf/download.
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amend, extend, renew, or replace their Insurance Policies as needed, in their judgment, without
further order of the Court.
27. Courts in this district have routinely granted relief similar to that requested herein.
See, e.g., In re 21st Century Oncology Holdings, Inc., Case No. 17-22770 (RDD) (Bankr. S.D.N.Y.
June 20, 2017) (granting relief to continue insurance policies); In re BCBG Max Azria Global
Holdings, LLC, Case No. 17-10466 (SCC) (Bankr. S.D.N.Y. Mar. 29, 2017) (same); In re Avaya
Inc., Case No. 17-10089 (SMB) (Bankr. S.D.N.Y. Feb. 10, 2017) (same); In re Int’l Shipholding
Corp., Case No. 16-12220 (SMB) (Bankr. S.D.N.Y. Aug. 23, 2016) (authorizing debtors to pay
prepetition premiums and enter into new insurance policies pursuant to sections 105(a) and 363(b)
of the Bankruptcy Code); In re Aeropostale, Inc., Case No. 16-11275 (SHL) (Bankr. S.D.N.Y.
June 3, 2016) (same).
28. To ensure that Debtors comply with section 1112(b)(4)(C) of the Bankruptcy Code,
applicable state and federal regulations, and the U.S. Trustee Guidelines, Debtors respectfully
request the authority to: (i) continue prepetition insurance coverage and enter into new policies,
(ii) maintain prepetition premium financing agreements and enter into new post-petition premium
financing agreements, (iii) maintain insurance brokerage agreements and enter into new post-
petition insurance brokerage agreements, and (iv) pay all insurance obligations in the Debtors’ sole
discretion, on account of the Debtors’ insurance coverages provided through various group
insurance policies. Debtors further request the Court authorize and direct financial institutions to
receive, process, honor, and pay checks presented for payment and electronic payment requests
related thereto, and to grant related relief.
C. Processing of Checks and Electronic Fund Transfers Should Be Authorized
29. Debtors have sufficient funds to pay any amounts described in this Motion in the
ordinary course of business by anticipated access to cash collateral plus the proceeds from the
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anticipated sale of assets described in greater detail in Debtors’ 363 Motion, which is being filed
simultaneously herewith. In addition, under Debtors’ existing cash management system, which is
described in further detail in a separate motion being filed simultaneously herewith, Debtors can
readily identify checks or wire transfer requests as relating to an authorized payment with respect
to the Insurance Policies. Accordingly, Debtors believe there is minimal risk that checks or wire
transfer requests that the Bankruptcy Court has not authorized will be inadvertently made.
Therefore, Debtors respectfully request that the Bankruptcy Court authorize and direct all
applicable financial institutions, when requested by Debtors, to receive, process, honor, and pay
any and all checks or wire transfer requests in respect of the relief requested in this Motion.
WAIVER OF BANKRUPTCY RULES 6004(a) AND 6004(h)
30. To successfully implement the foregoing, Debtors request that the Bankruptcy
Court enter an order providing that notice of the relief requested herein satisfies Bankruptcy Rule
6004(a) and that Debtors have established cause to exclude such relief from the 14-day stay period
under Bankruptcy Rule 6004(h).
RESERVATION OF RIGHTS
Nothing contained herein is or should be construed as: (a) an admission as to the validity
of any claim against the Debtors; (b) a waiver of the Debtors’ rights to dispute any claim on any
grounds; (c) a promise to pay any claim; (d) an assumption or rejection of any executory contract
or unexpired lease pursuant to Bankruptcy Code section 365; or (e) otherwise affect the Debtors’
rights under Bankruptcy Code section 365 to assume or reject any executory contract with any
party subject to this Motion.
NOTICE
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31. No trustee, examiner or statutory creditors’ committee has been appointed in this
chapter 11 case. Notice of this Motion will be provided by overnight delivery to: (i) Office of the
United States Trustee for the Southern District of New York; (ii) the Internal Revenue Service;
(iii) New York State Department of Finance; (iv) Willkie Farr and Gallagher, 787 Seventh Avenue
New York, New York 10019 Attn: Paul V. Shalhoub, Esq.; counsel to the holder of Cosmoledo’s
equity interests; (v) Katten Muchin Rosenman LLP, 575 Madison Avenue New York, New York
10022, Attn: Steven J. Reisman, Esq. counsel to the Debtors’ senior secured lender; (vi) the
Debtors’ top twenty (20) unsecured creditors; and (vii) all other parties who have requested notice
under Bankruptcy Rule 2002. The Debtors submit that such notice is sufficient under the
circumstances.
NO PRIOR RELIEF REQUESTED
32. No previous request for the relief sought herein has been made to this or any other
Court.
CONCLUSION
WHEREFORE, the Debtors respectfully request entry of the Proposed Order annexed
hereto granting the relief requested herein and such other and further relief as the Court may deem
just and proper.
Dated: September 10, 2020
New York, New York
MINTZ & GOLD LLP
by: /s/ Andrew R. Gottesman
Andrew R. Gottesman
Maria E. Garcia
Gabriel Altman
600 Third Avenue, 25th Floor
New York, New York 10016
Telephone (212) 696-4848
Facsimile (212) 696-1231
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Proposed Attorneys for the Debtors
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UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
In re:
COSMOLEDO, LLC, et al.1
Debtors.
Chapter 11
Case No. 20-12117 ( )
(Joint Administration Pending)
ORDER (I) AUTHORIZING THE DEBTORS TO (A) MAINTAIN INSURANCE
POLICIES, (B) MAINTAIN PREPETITION INSURANCE BROKERAGE
AGREEMENTS AND ENTER INTO NEW POST-PETITION INSURANCE
BROKERAGE AGREEMENTS, AND (C) PAY PREPETITION INSURANCE
OBLIGATIONS, INCLUDING OBLIGATIONS OWED FOR DEBTORS’ INSURANCE
POLICIES; AND (II) GRANTING RELATED RELIEF
Upon the motion (the “Motion”)2 of Cosmoledo, LLC (“Cosmoledo”), and its affiliated
debtors and debtors in possession in the above-captioned cases (collectively the “Debtors”) for
entry of an order (the “Order”) under sections 105, 345, and 363 of title 11 of the United States
Code (the “Bankruptcy Code”), and Rules 6003 and 6004 of the Federal Rules of Bankruptcy
Procedure (the “Bankruptcy Rules”) (a) authorizing the Debtors to (i) continue prepetition
insurance coverage and enter into new policies, (ii) maintain prepetition premium financing
agreements and enter into new post-petition premium financing agreements, (iii) maintain
insurance brokerage agreements and enter into new post-petition insurance brokerage agreements,
and (iv) pay all insurance obligations in the Debtors’ sole discretion, on account of the Debtors’
1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax
identification number, include: Cosmoledo, LLC (6787); Breadroll, LLC, (3279); 688 Bronx Commissary, LLC
(6515); 95 Broad Commissary, LLC (2335); 178 Bruckner Commissary, LLC (2581); 8 West Bakery, LLC (6421);
NYC 1294 Third Ave Bakery, LLC (2001); 921 Broadway Bakery, LLC (2352); 1800 Broadway Bakery, LLC (8939);
1535 Third Avenue Bakery, LLC (1011); 2161 Broadway Bakery, LLC (2767); 210 Joralemon Bakery, LLC (4779);
1377 Sixth Avenue Bakery, LLC (9717); 400 Fifth Avenue Bakery, LLC (6378); 1400 Broadway Bakery, LLC
(8529); 575 Lexington Avenue Bakery, LLC (9884); 685 Third Avenue Bakery, LLC (9613); 370 Lexington Avenue
Bakery, LLC (0672); 787 Seventh Avenue Bakery, LLC (6846); 339 Seventh Avenue Bakery, LLC (1406); and 55
Hudson Yards Bakery, LLC (7583).
2 Capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in the Motion
or the 1007 Declaration.
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insurance coverages provided through various group insurance policies; and (b) authorizing and
directing financial institutions to receive, process, honor, and pay checks presented for payment
and electronic payment requests related thereto; and (c) granting related relief; and the Court
having jurisdiction to consider the Motion and the relief requested therein pursuant to 28 U.S.C.
§§ 157 and 1334; and venue being proper before this Court pursuant to 28 U.S.C. §§ 1408 and
1409; and notice of the Motion having been given as set forth in the Motion; and it appearing that
no other notice need be provided; and upon the record of the interim hearing held ________, 2020;
and the relief requested in the Motion being in the best interests of the Debtors and their estates
and creditors; and no objections having been interposed to the relief sought in the Motion or any
such objections having been heard and overruled; after due deliberation and sufficient cause
appearing therefore;
IT IS HEREBY ORDERED THAT:
1. The Motion is GRANTED solely to the extent set forth herein.
2. The Debtors are authorized to maintain, continue, and renew their Insurance
Policies.
3. The Debtors are authorized, but not directed, to pay all insurance obligations in the
Debtors’ sole discretion, all amounts and obligations on account of insurance premiums arising
after the Petition Date, Insurance Deductibles, Broker’s Fees, deductibles, taxes, charges, and
other obligations owed under or with respect to the Insurance Policies owed in connection with
the Insurance Policies, whether incurred prepetition or post-petition.
4. In the event the Debtors seek to pay a prepetition obligation (a “Proposed Insurance
Payment”) to an Insurer, or otherwise in accordance with any of the Debtors’ Insurance Policies,
the Debtors are hereby are required to file a notice in the docket of these cases (a “Proposed
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Insurance Payment Notice”) indicating, (a) the party to whom any Proposed Insurance Payment is
to be made, (b) the address for such party, (c) the amount of the Proposed Insurance Payment and
(d) the basis for the Proposed Insurance Payment. The Debtors shall serve any Proposed Payment
Notice on (i) the Office of the United States Trustee for the Southern District of New York; (ii)
the Internal Revenue Service; (iii) New York State Department of Finance; (iv) Willkie Farr and
Gallagher, 787 Seventh Avenue New York, New York 10019 Attn: Paul V. Shalhoub, Esq.;
counsel to the holder of Cosmoledo’s equity interests; (v) Katten Muchin Rosenman LLP, 575
Madison Avenue New York, New York 10022, Attn: Steven J. Reisman, Esq. counsel to the
Debtors’ senior secured lender; (vi) the Debtors’ top twenty (20) unsecured creditors; and (vii) all
other parties who have requested notice under Bankruptcy Rule 2002 (collectively, the “Notice
Parties”).
5. Any objection to a Proposed Insurance Payment Notice must be to be filed on the
docket of these cases, and served on proposed counsel to Debtors, Mintz & Gold LLP, 600 Third
Avenue, 25th floor, New York, New York 10016, Attn: Andrew R. Gottesman, Esq., the Notice
Parties and the party to whom payment is to be made so as to be received no later than five (5)
days following service of the Proposed Insurance Payment Notice.
6. In the event any objection to a Proposed Insurance Payment Notice is received, the
Debtors may request a hearing with respect to the dispute on no less than ten (10) days’ notice.
7. The Debtors are hereby authorized to make any Proposed Insurance Payment
subject to a Proposed Insurance Payment Notice, if no objections are received, pursuant to the
procedure outlined above.
8. The requirements set forth in Bankruptcy Rule 6003(b) are satisfied.
9. The requirements set forth in Bankruptcy Rule 6004(a) are hereby waived.
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10. The Debtors are hereby authorized to take such actions and to execute such
documents as may be necessary to implement the relief granted by this Order.
11. Notwithstanding Bankruptcy Rule 6004(h), this order shall be effective and
enforceable immediately upon entry hereof.
12. This Order, and all acts taken in furtherance of or reliance upon this Order, shall be
effective notwithstanding the filing of an Objection, pending the entry of the Final Order by this
Court.
13. The Debtors are authorized and empowered to take all actions necessary to
implement the relief granted in this Order.
14. A final hearing to consider final approval of the relief requested in the Motion (the
“Final Hearing”) shall be held on _________________, 2020 at ___:___ __.m. (Eastern Time).
Any objections or responses to entry of a final order on the Motion must be filed with the Court
on or before 4:00 p.m. (Eastern Time) on _________________, 2020.
15. This Court shall retain jurisdiction with respect to all matters arising from or related
to the implementation or interpretation of this Order.
Dated: _____________, 2020
New York, New York
________________________________
Hon. _________________
United States Bankruptcy Judge
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Exhibit A
Insurance Policies
Insured Insurance Carrier Policy Number Coverage Policy Term Premium
Cosmoledo LLC The Hanover Insurance
Company
LHY-D393959-03
D&O and Entity
Liability
Coverage, and
Crime Coverage
10/19/2019 to
01/17/2021
$20,131.00
Cosmoledo LLC The Hanover Insurance
Company
LHYD393959
Six-year
extended
reporting
coverage
01/17/2021 to
01/17/2027
$25,386.00
Cosmoledo LLC (d/b/a
“Maison Kayser”)
Travelers Casualty and
Surety Company of
America
107169083
D&O Excess
Policy
10/19/2019 to
10/19/2020
$7,703.00
Cosmoledo LLC Chubb D94405725
Cyber Enterprise
Risk
10/19/2019 to
10/19/2020
$6,934.00
Cosmoledo LLC Ironshore Indemnity,
Inc.
004233100
Employment
Practices
10/19/2019 to
10/19/2020
$67,996.00
Cosmoledo LLC Massachusetts Bay
Insurance Company
ZDY-D731522-01
Commercial
Property &
General Liability
Coverage
10/19/2019 to
10/19/2020
$225,265.63
Cosmoledo LLC1 The Hanover Insurance
Company
UHY-D731517-02
Umbrella Policy 10/19/2019 to
10/19/2020
$19,915.00
Cosmoledo LLC Hartford Insurance
Company
13WBBA7IWY
Workers’
Compensation &
Employer’s
Liability
10/19/2019 to
10/19/2020
$727,965.00
1 This policy’s coverage extends to all of the Debtor entities, not just Cosmoledo LLC.
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