IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: PERKINS & MARIE CALLENDERS INC.

,1 et al., Debtors. Chapter 11 Case No. 11-11795 (___) Joint Administration Pending

DEBTORS MOTION PURSUANT TO 11 U.S.C. 105(a) AND 363(b) AND (c) FOR ORDER AUTHORIZING THE PAYMENT OF PRE-PETITION CLAIMS OF FREIGHT FORWARDERS, CARRIERS, WAREHOUSEMEN AND SIMILAR CLAIMANTS Perkins & Marie Callenders Inc. (f/k/a The Restaurant Company) (PMCI) and its above-captioned affiliated debtor entities (collectively, with PMCI, the Debtors), by and through their undersigned proposed counsel, respectfully submit this motion (the Motion) for entry of an order authorizing, but not requiring, the Debtors, in their sole discretion, to pay certain pre-petition claims of freight forwarders, carriers, warehousemen and similar claimants in the ordinary course of business (each, a Shipper and Warehouseman, and collectively, the Shippers and Warehousemen) pursuant to sections 105(a) and 363 of title 11 of the United States Code, 11 U.S.C. 101 et seq. (the Bankruptcy Code). In support of this Motion, the Debtors submit and incorporate by reference herein the Declaration of Joseph F. Trungale in Support of Debtors Chapter 11 Petitions and First Day Motions, filed contemporaneously with this Motion. In further support of this Motion, the Debtors respectfully state as follows:

The Debtors, together with the last four digits of each Debtors federal tax identification number, are: Perkins & Marie Callenders Inc. (4388); Perkins & Marie Callenders Holding Inc. (3999); Perkins & Marie Callenders Realty LLC (N/A); Perkins Finance Corp. (0081); Wilshire Restaurant Group LLC (0938); PMCI Promotions LLC (7308); Marie Callender Pie Shops, Inc. (7414); Marie Callender Wholesalers, Inc. (1978); MACAL Investors, Inc. (4225); MCID, Inc. (2015); Wilshire Beverage, Inc. (5887); and FIV Corp. (3448). The mailing address for the Debtors is 6075 Poplar Avenue, Suite 800, Memphis, TN 38119.

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Jurisdiction and Venue 1. This Court has jurisdiction to hear the Motion under 28 U.S.C. 157 and 1334.

This is a core proceeding within the meaning of 28 U.S.C. 157(b)(2). 2. Venue of the above-captioned cases and this Motion are proper in this District

pursuant to 28 U.S.C. 1408 and 1409. 3. The statutory predicates for the relief requested herein are sections 105(a) and 363

of the Bankruptcy Code. Factual Background 4. On June 13, 2011 (the Petition Date), each of the Debtors filed a voluntary

petition (collectively, the Petitions) for relief under chapter 11 of the Bankruptcy Code, and each thereby commenced chapter 11 cases (collectively, the Chapter 11 Cases) in this Bankruptcy Court (the Court). No request has been made for the appointment of a trustee or examiner, and the Debtors continue to operate their businesses and manage their properties as debtors-in-possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. As of the date hereof, no Official Committee of Unsecured Creditors has been appointed in any of the Chapter 11 Cases. A. The Debtors Businesses 5. The Debtors are one of the leading operators of family-dining and casual-dining

restaurants, under their two (2) highly-recognized brands: (i) their full-service family dining restaurants located primarily in the Midwest, Florida and Pennsylvania under the name Perkins Restaurant and Bakery (Perkins), and (ii) their mid-priced, full-service casual-dining restaurants, specializing in the sale of pies and other bakery items, located primarily in the

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western United States under the name Marie Callenders Restaurant and Bakery (Marie Callenders). 6. Through the Debtors Foxtail Foods bakery goods manufacturing operations

(Foxtail), the Debtors offer pies, muffin batters, cookie doughs, pancake mixes, and other food products for sale to both company-owned and franchised Perkins and Marie Callenders restaurants, and to unaffiliated customers, such as food service distributors and supermarkets, as well as on-line to the public. 7. As of April 17, 2011, the Debtors owned and operated one hundred sixty (160)

Perkins restaurants located in thirteen (13) states, and franchised three hundred fourteen (314) Perkins restaurants located in thirty-one (31) states and five (5) Canadian provinces. Similarly, the Debtors owned and operated eighty-five (85) Marie Callenders restaurants located in nine (9) states, and franchised thirty seven (37) Marie Callenders restaurants located in four (4) states and Mexico.2 Thus, the Debtors operate or franchise approximately six hundred (600) restaurants throughout the United States, Canada and Mexico.* 8. As of April 17, 2011, the Debtors employed approximately twelve thousand three

hundred fifty (12,350) employees, consisting of approximately five thousand three hundred fifty (5,350) part-time employees and approximately seven thousand (7,000) full-time employees.* 9. $507 million. The Debtors revenues for the year ended December 26, 2010 were approximately

Included therein, MCPSI operates two (2) Callenders Grill restaurants in Los Angeles, California and a single East Side Marios restaurant in Lakewood, California. * Immediately prior to the Petition Date, the Debtors initiated a store reduction program to discontinue approximately sixty-five (65) corporate-operated restaurant locations, which will have the attendant effect of a reduction in workforce of approximately 2,500 people.

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B.

Corporate Structure and Pre-Petition Capitalization 10. Perkins & Marie Callenders Holding Inc. (f/k/a The Restaurant Holding

Corporation) is a holding company that wholly owns PMCI. PMCI is the Debtors principal operating entity and the primary obligor on the Debtors pre-Petition Date senior secured working capital facility and their secured and unsecured bond debt. PMCI directly or indirectly owns and operates the Debtors restaurant operations, oversees the Debtors franchised restaurant operations, and owns and operates its Foxtail business. 11. On September 24, 2008, PMCI issued $132 million in aggregate principal amount

of 14% Senior Secured Notes (the Senior Secured Notes), with a maturity date of May 31, 2013 and interest payable semi-annually on May 31 and November 30 of each year. Prior thereto, on September 21, 2005, PMCI issued $190 million of 10% Senior Notes (the Senior Notes), with a maturity date of October 1, 2013 and interest payable semi-annually on April 1 and October 1 of each year. Concurrently with the issuance of the Senior Secured Notes, PMCI and PMC Holding entered into a Credit Agreement dated as of September 24, 2008 (as amended, the Credit Agreement) with Wells Fargo Capital Finance, LLC (f/k/a Wells Fargo Foothill, LLC) as the lender and administrative agent (the Credit Facility Agent), consisting of a revolving credit facility in favor of PMCI, as borrower, of up to $26,000,000, with a sub-limit of $15,000,000 for the issuance of letters of credit (collectively, the Credit Facility). As of the Petition Date, approximately $103,000,000 in aggregate principal amount of the Senior Secured Notes are outstanding, $190,000,000 in aggregate principal amount of the Senior Notes are outstanding, and approximately $10,060,000 in principal amount is outstanding under the Credit Facility (comprised solely of outstanding letters of credit).

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12.

Effective April 30, 2011, PMCI and various of the other Debtors entered into two

(2) forbearance agreements (collectively, the Forbearance Agreements), one (1) with the holders of in excess of eighty (80%) percent in aggregate principal amount of the Senior Notes (the Senior Note Forbearance Agreement), and one (1) with the lender and Credit Facility Agent under the Credit Agreement. 13. In the weeks preceding the Petition Date, the Debtors entered into a

Restructuring Support Agreement dated as of June 6, 2011 with the holders of the Senior Notes signatory to the Senior Note Forbearance Agreement and the holders of one hundred (100%) percent of the Senior Notes (collectively, the Restructuring Support Parties) designed to mutually and consensually develop and agree upon the parameters of a reorganization program for the Debtors that will, among other things, delever the Debtors capital structure, and thereby establish a pre-filing blueprint for an efficient and effective chapter 11 reorganization process. In connection with entering into the Restructuring Support Agreement, the Debtors and the Restructuring Support Parties also negotiated the principal terms of the Debtors plan of reorganization, and such plan of reorganization and the accompany disclosure statement will be filed with the Court on or before July 14, 2011 in accordance with the milestones contained in the Restructuring Support Agreement. Debtors Supply, Delivery, and Distribution System 14. The Debtors ship their pies, baked goods and other finished products from each of

their manufacturing facilities at Foxtail to various warehouse and storage facilities through third party freight forwarders and trucking companies multiple times a day. These companies use a dedicated specialized fleet of trucks and trailers designed to handle the safe shipping of the finished items while minimizing damage and assuring the product is delivered to storage. The

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trucking companies drivers have been specially trained to facilitate deliveries to the Debtors. After the products are warehoused in third party storage facilities, Foxtail will take orders from distributors and other third parties and send them to the storage facilities. Once the storage facilities receive orders, they coordinate shipment pick-up with each of the distributors who target their deliveries to various parts of the country. 15. To meet these goals, the Debtors utilize a complex network of Shippers and

Warehousemen. In particular, the Debtors primarily depend upon the services of certain carriers (collectively, the Carriers) to move finished product to warehouses from Foxtails two (2) Cincinnati, Ohio locations and its Corona, California plant. The Carriers are dedicated freight carriers for the delivery of product to the Debtors warehouses and storage facilities. Additionally, the Debtors often use certain other carriers (collectively, the Secondary Carriers) for alternative delivery to warehouses and storage facilities. All third party product is warehoused in outside storage facilities. The Debtors utilize the warehouses of certain operators (collectively, the Warehouses) for finished items forwarded from Foxtails Cincinnati, Ohio facilities and its Corona, California facility. The Debtors products are released from the Warehouses to distributors and third parties for the fulfillment of orders. 16. The Debtors pay for transportation and outside storage services as follows: (a) the

Carriers and Secondary Carriers invoice the Debtors weekly for services based on the hours worked per week; and (b) the Warehouses invoice the Debtors monthly based on in and out charges, picking fees and storage. 17. The Debtors are concerned that the Shippers and Warehousemen will stop

providing services if they do not receive the full amount of their pre-petition invoices in a timely manner, and in accordance with past practice. Further, if they are not timely paid by the Debtors,

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the Shippers and Warehousemen may cease to provide shipping and other services to the Debtors on the same terms that they did pre-petition. 18. As discussed in more detail below, the Debtors are critically in need of the

services of the Shippers and Warehousemen and other applicable service providers and cannot easily, economically or quickly replace them with third party providers. Moreover, the Shippers and Warehousemen with possession or control of the Debtors goods or supplies may assert a possessory lien, thereby freezing up the shipment and delivery of such property. 19. Together, the Shippers and Warehousemen that handle the Debtors goods and

supplies ensure that the Debtors delivery and transport networks run smoothly and efficiently. The Debtors lack the ability to handle certain shipping themselves. Therefore, the Debtors delivery systems would completely stop without the services and support provided by the Shippers and Warehousemen. The Debtors estimate that, as of the Petition Date, they owe approximately $175,000 in the aggregate to the Shippers and Warehousemen (the foregoing prepetition claims are collectively referred to herein as the Shipping and Warehouse Claims). Relief Requested 20. Pursuant to sections 105(a) and 363(b) and (c) of the Bankruptcy Code, and the

necessity of payment doctrine, the Debtors seek authority to pay, in their discretion, (a) the Shipping and Warehouse Claims up to an aggregate cap of $175,000 to obtain the release of valuable inventory or other goods or materials, (b) maintain the Debtors distribution system in an efficient and smooth manner, and/or (c) induce critical freight forwarders, carriers and support providers to continue to make timely deliveries of inventory and other goods and materials. 21. Under most state laws, the Shippers and Warehousemen may have a lien on the

goods in their possession or under their control, which lien secures the charges or expenses

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incurred in connection with the transportation or storage of such goods.3 Additionally, pursuant to section 363(e) of the Bankruptcy Code, such parties, as bailees, may potentially be entitled to adequate protection in the form of a possessory lien. As a result, certain Shippers and Warehousemen may refuse to deliver or release the Debtors inventory or other goods and materials, as applicable, before their liens and claims have been satisfied. 22. The Debtors businesses are extremely dependent on the sale and distribution of

their own products and those received from vendors. The Debtors rely upon the Shippers and Warehousemen and the distribution system described above to maintain necessary inventory and deliver products timely to their customers and their various restaurant locations. Transportation charges are a small portion of the cost of sale of the Debtors inventory, and if the Debtors are unable to pay such invoices timely, the cost in lost inventory and lost sales may greatly exceed the amount of those invoices. Indeed, even if the Shippers and Warehousemen do not have valid liens under applicable non-bankruptcy law, possession and retention of or control over the Debtors inventory and supplies and any attendant delay in delivery or shipment may severely disrupt the Debtors operations. 23. For these reasons, the Debtors believe that to continue to operate their businesses

and to preserve and maximize the value of the assets of the estates, the Debtors must be allowed to make payments on account of the Shipping and Warehouse Claims. 24. Accordingly, the Debtors hereby request authorization (but not direction) to pay

the Shipping and Warehouse Claims, as determined by the Debtors in their sole discretion, in order to continue receiving the services provided by the Shippers and Warehousemen. Subject to

For example, Uniform Commercial Code Section 7-307 provides, in pertinent part, that a carrier has a lien on the goods covered by a bill of lading for charges subsequent to the date of its receipt of the goods for storage or transportation (including demurrage and terminal charges) and for expenses necessary for preservation of the goods incident to their transportation or reasonably incurred in their sale pursuant to law.

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the terms set forth below, the Debtors propose to condition the payment of the Shipping and Warehouse Claims on the agreement of individual Shippers and Warehousemen to continue to provide services to the Debtors during the pendency of these Chapter 11 cases on the most favorable terms that existed prior to the Petition Date (the Historical Trade Terms), unless this requirement is waived by the Debtors; provided, however, that the Debtors shall provide five (5) business days notice to the Restructuring Support Parties of their waiver of any material terms of any agreement with a material Shipper and Warehouseman or other applicable provider. 25. If any party accepts payment from the Debtors on account of its Shipping and

Warehouse Claim and thereafter does not continue to provide services to the Debtors on the Historical Trade Terms, then the Debtors hereby seek authority, in their discretion and without further order of the Court, (a) to declare that any payments made to such Shipper and Warehouseman on account of its Shipping and Warehouse Claim be deemed to have been in payment of any then-outstanding (or subsequently accruing) undisputed post-petition claims of such Shipper and Warehouseman without further action by any person or entity, and (b) to recover any payment made to such Shipper and Warehouseman on account of its Shipping and Warehouse Claim to the extent that such payments exceeded the undisputed post-petition claims of such Shipper and Warehouseman, without giving effect to any rights of setoff or recoupment, claims, provision for payment of reclamation or trust fund claims, or other defenses; provided, however, that upon recovery of any such payments by the Debtors, the applicable portion of the Shipping and Warehouse Claim shall be reinstated as a pre-petition claim in the amount recovered by the Debtors.

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Basis for the Relief Requested 26. Section 105(a) of the Bankruptcy Code provides that the Court may issue any

order ... that is necessary or appropriate to carry out the provisions of this title. 11 U.S.C. 105(a). A bankruptcy courts use of its equitable powers to authorize the payment of prepetition debt when such payment is needed to facilitate the rehabilitation of the debtor is not a novel concept. In re Ionosphere Clubs, Inc., 98 B.R. 174, 175 (Bankr. S.D.N.Y. 1989). Pursuant to section 105(a) of the Bankruptcy Code, the Court can permit pre-plan payment of a pre-petition obligation when essential to the continued operation of the debtor. In re NVR L.P., 147 B.R. 126, 127 (Bankr. E.D. Va. 1992); In re Lehigh & New England Ry. Co., 657 F.2d 570, 581 (3d Cir. 1981); In re Just for Feet, Inc., 242 B.R. 821, 825 (D. Del. 1999); Pension Benefit Guarantee Corp. v. Sharon Steel Corp. (In re Sharon Steel Corp.), 159 B.R. 730, 736 (Bankr. W.D. Pa. 1993). 27. Section 363(b) of the Bankruptcy Code provides that [t]he trustee, after notice

and a hearing, may use, sell, or lease, other than in the ordinary course of business, property of the estate. 11 U.S.C. 363(b). Under this section, a court may authorize a debtor to pay certain pre-petition claims. See Ionosphere Clubs, 98 B.R. at 175 (authorizing payment of pre-petition claims where the debtors articulate some business justification, other than the mere appeasement of major creditors); see also In re James A. Phillips, Inc., 29 B.R. 391, 397 (S.D.N.Y. 1983) (pursuant to section 363 of the Bankruptcy Code the Court authorized a contractor to pay pre-petition claims of some suppliers who were potential lien claimants because the payments were necessary for the general contractors to release funds owed to the debtors).

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28.

Section 363(c)(1) of the Bankruptcy Code provides that [w]ho trustee may enter

into transactions, including the sale or lease of property of the estate, in the ordinary course of business without notice or a hearing. 11 U.S.C. 363(c)(1). 29. Also, the necessity of payment doctrine4 supports the relief requested in this

Motion and has been embraced by the Third Circuit. The necessity of payment doctrine teaches no more than, if payment of a claim that arose prior to reorganization is essential to the continued operation of the [business] during the reorganization, payment may be authorized even if it is made out of corpus. In re Lehigh & New England Ry. Co., 657 F.2d 570, 581 (3d Cir. 1981); see also Pension Benefit Guarantee Corp. v. Sharon Steel Corp. (In re Sharon Steel Corp.), 159 B.R. 730, 736 (Bankr. W.D. Pa. 1993). The necessity of payment doctrine recognizes the existence of the judicial power to authorize a debtor in a reorganization case to pay pre-petition claims where such payment is essential to the continued operation of the debtor. Ionosphere Clubs, 98 B.R. at 176; In re C.A.F. Bindery, 199 B.R. 828, 835 (Bankr. S.D.N.Y. 1996); In re Eagle-Picher Indus., Inc., 124 B.R. 1021, 1023 (Bankr. S.D. Ohio 1991); In re Structurlite Plastics Corp., 86 B.R. 922, 931 (Bankr. S.D.Ohio 1988) (payment of prepetition claims are authorized when necessary to permit the greatest likelihood of survival of the debtor and payment of creditors in full or at least proportionately); In re Chateaugay Corp., 80 B.R. 279 (S.D.N.Y. 1987). This rule is consistent with the paramount goal of Chapter 11, i.e., facilitating the continued operation and rehabilitation of the debtor.... Ionosphere Clubs, 98 B.R. at 176; see Just for Feet, 242 B.R. at 826 (To invoke the necessity of payment doctrine, a

The necessity of payment doctrine was first articulated by the Supreme Court in a railroad reorganization case. Miltenberger v. Logansport, C. & S.W. R. Co., 106 U.S. 286 (1882). The doctrine has also been held to be equally applicable to non-railroad cases. See, e.g., Dudley v. Mealey, 147 F.2d 268, 271 (2d Cir. 1945) (hotel); In re Gulf Air. Inc., 112 B.R. 152, 153 (Bankr. W.D. La. 1989) (airline).

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debtor must show that payment of the pre-petition claims is critical to the debtors reorganization). 30. Under the doctrine of necessity, a bankruptcy court may exercise its equitable

power to authorize a debtor to pay the pre-petition claims of creditors whose services are essential to the debtors reorganization efforts. See In re Columbia Gas Sys.. Inc., 136 B.R. 930, 939 (Bankr. D. Del. 1992) (recognizing that [i]f payment of a pre-petition claim is essential to the continued operation of [the debtor], payment maybe authorized); In re Eagle-Picher Indus., Inc., 124 B.R. at 1023 (payment must be necessary to avert a serious threat to the Chapter 11 process). 31. The Debtors firmly believe that the (i) continuation of their positive relationships

with the Shippers and Warehousemen is imperative to the Debtors continued business operations and efforts in these Chapter 11 Cases and (ii) payment of the Shipping and Warehouse Claims is essential to preserve and maximize the value of the Debtors estates. 32. Payment of the Shipping and Warehouse Claims is necessary and appropriate here

because the failure to satisfy the Shipping and Warehouse Claims could have a material adverse effect on the Debtors day-to-day business operations and relationships with their customers and vendors, as well as their efforts to reorganize in these Chapter 11 Cases. In that regard, the Debtors submit that the aggregate amount to be paid to the Shippers and Warehousemen is relatively small compared to the importance and necessity of such service providers to the Debtors business operations and to the direct and indirect losses that the Debtors will suffer if such parties refuse to deliver inventory or other goods or materials to the Debtors or their customers. Moreover, the Debtors would not be able to make cost-effective, viable alternative arrangements in a timely manner. The Debtors believe that, if prompt payment of the Shipping

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and Warehouse Claims is not made in the ordinary course of business, the Shippers and Warehousemen may immediately cease to provide services to the Debtors and some carriers and storage facilities may potentially assert liens in the goods and supplies at issue, thereby threatening to severely hinder, delay or cripple the Debtors supply and delivery system. 33. It is essential for the Debtors business operations and efforts that the Debtors

maintain a reliable and efficient supply and distribution network. Because the Debtors are dependent on third parties for the delivery of materials and supplies to their warehouse/distribution facilities, and new inventory to their customers, it is essential that the Debtors bankruptcy cases not be a reason or excuse for any such party to cease timely performing or delaying delivery services or to retain goods in their possession on account of unpaid pre-petition claims. If the Debtors and their customers are unable to receive deliveries on a timely and uninterrupted basis, the Debtors operations may be impeded with devastating consequences. Disruption in the continuous flow of the Debtors goods and supplies will likely result in shortages of inventory and supplies necessary to the Debtors businesses, adverse responses from the Debtors customers, a significant loss of credibility and customer goodwill, and a resulting loss of revenue, thereby causing substantial harm to the Debtors businesses and efforts to maximize the value of their assets for the benefit of the estates. 34. Absent the relief requested by this Motion, the Debtors will be required to expend

substantial time and resources: (i) convincing those parties holding the Debtors goods and supplies that they should not assert a lien or hold this property in transit; (ii) attempting to persuade certain Shippers and Warehousemen to release goods held and to continue making future shipments; (iii) locating replacement vendors for those Shippers and Warehousemen that

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cease doing business with the Debtors; and (iv) convincing such parties of the Debtors authority and ability to make certain payments. 35. Indeed, for these and related reasons, it is not uncommon for courts in this District

to authorize the payment of pre-petition claims of freight forwarders, carriers, warehousemen, and similar claimants. See e.g., In re Harry & David Holdings Inc., Case No. 11-10884 (MFW) (Bankr. D. Del. March 29, 2011); In re Appleseeds Intermediate Holdings LLC, Case No. 1110160 (KG) (Bankr. D. Del. Feb. 23, 2011); In re Atrium Corp., Case No.10-10150 (BLS) (Bankr. D. Del. Feb 23, 2010); In re Linens Holding Co., Case No. 08-10832 (CSS) (Bankr. D. Del. May 2, 2008); In re Adva-Lite Inc., Case No. 07-10264 (Bankr. D. Del. March 2, 2007) (KJC). 36. The Debtors believe that obtaining immediate authorization to pay the Shipping

and Warehouse Claims is vital to their continued viability. Specifically, the Debtors believe that any delay or interruption in the Debtors supply chain to their restaurants and customers, however temporary it might be, would immediately jeopardize the Debtors continued ability to operate their businesses and generate revenues. Because the Shippers and Warehousemen typically deliver and store the necessary goods and supplies related to the Debtors customers daily, even a one-day delay in deliveries could severely disrupt hundreds of distributors, third parties and end users. Request For Immediate Relief and Waiver of Stay to Avoid Immediate and Irreparable Harm 37. The Debtors seek immediate authorization for the relief contemplated by this

Motion. Pursuant to Rule 6003(b) of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules), the Court cannot grant relief regarding a motion to use, sell, lease or otherwise incur an obligation regarding property of the estate, including a motion to pay all or 14
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part of a claim that arose before the filing of the petition within twenty-one (21) days of the filing of the petition unless the relief is necessary to avoid immediate and irreparable harm. Fed.R.Bankr.P. 6003(b). For the reasons set forth above, the Debtors submit that the requirements of Bankruptcy Rule 6003(b) are met and that the relief requested in the Motion is necessary to avoid immediate and irreparable harm to the Debtors and their estates. 38. In addition, by this Motion, the Debtors seek a waiver of any stay of the

effectiveness of the order approving this Motion. Pursuant to Bankruptcy Rule 6004(h), [a]n order authorizing the use, sale, or lease of property other than cash collateral is stayed until the expiration of 14 days after entry of the order, unless the court orders otherwise. For the reasons set forth above, the Debtors submit that ample cause exists to justify a waiver of the fourteen (14) day stay imposed by Bankruptcy Rule 6004(h). Reservation of Rights 39. Nothing contained herein is intended 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; or (c) an approval or assumption of any agreement, contract or lease, pursuant to section 365 of the Bankruptcy Code. Notice 40. The Debtors will serve notice of this Motion upon: (i) the Office of the United

States Trustee; (ii) the Debtors consolidated list of creditors holding the forty (40) largest unsecured claims; (iii) counsel to the agent for the Debtors pre-petition Credit Facility and postpetition debtor-in-possession financing facility; (iv) counsel to the indenture trustee for the Senior Secured Notes; (v) counsel to the indenture trustee for the Senior Notes; and (vi) counsel to the Restructuring Support Parties. Notice of this Motion and any order entered hereon will be

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served in accordance with Local Rule 9013-1(m). In light of the nature of the relief requested, the Debtors submit that no other or further notice is necessary. No Prior Request 41. other court WHEREFORE, the Debtors respectfully request that the Court enter an order, in the form attached hereto as Exhibit A, granting the relief requested herein and such other and further relief the Court may deem necessary and proper. Dated: June 13, 2011 Wilmington, Delaware Respectfully submitted, YOUNG CONAWAY STARGATT & TAYLOR, LLP By: /s/ Robert S. Brady Robert S. Brady (No. 2847) Robert F. Poppiti, Jr. (No. 5052) The Brandywine Building 1000 West Street, 17th Floor P.O. Box 391 Wilmington, DE 19801 Telephone: (302) 571-6600 Facsimile: (302) 571-1253 And TROUTMAN SANDERS LLP Mitchel H. Perkiel Brett D. Goodman The Chrysler Building 405 Lexington Avenue New York, NY 10174 Telephone: (212) 704-6000 Facsimile: (212) 704-6288 Proposed Counsel for Perkins & Marie Callenders Inc., et al. Debtors and Debtors-in-Possession No prior application for the relief requested herein has been made to this or any

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EXHIBIT A

YCST01:11162235.1

070242.1001

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: PERKINS & MARIE CALLENDERS INC.,1 et al., Debtors. Ref. Docket No. _____ ORDER PURSUANT TO 11 U.S.C. 105(a) AND 363(b) AND (c) AUTHORIZING THE PAYMENT OF PRE-PETITION CLAIMS OF FREIGHT FORWARDERS, CARRIERS, WAREHOUSEMEN AND SIMILAR CLAIMANTS Upon the Debtors Motion Pursuant to 11 U.S.C. 105(a) and 363(b) and (c) For Order Authorizing the Payment of Pre-Petition Claims of Freight Forwarders, Carriers, Warehousemen and Similar Claimants (the Motion)2, the Court finds that (i) it has jurisdiction over this matter pursuant to 28 U.S.C. 157 and 1334; (ii) this is a core proceeding pursuant to 28 U.S.C. 157(b)(2); (iii) venue of these cases and the Motion are proper in this District pursuant to 28 U.S.C. 1408 and 1409; (iv) the requirements of Federal Rule of Bankruptcy Procedure 6003 have been satisfied; and (v) notice of the Motion and the hearing thereon was sufficient under the circumstances; and upon consideration of the Declaration of Joseph F. Trungale in Support of Debtors Chapter 11 Petitions and First Day Motions and the record herein, and after due deliberation, the Court hereby finds that good and sufficient cause exists for the relief requested and that the requirements of Bankruptcy Rule 6003 have been satisfied because the relief Chapter 11 Case No. 11-11795 (___) Jointly Administered

The Debtors, together with the last four digits of each Debtors federal tax identification number, are: Perkins & Marie Callenders Inc. (4388); Perkins & Marie Callenders Holding Inc. (3999); Perkins & Marie Callenders Realty LLC (N/A); Perkins Finance Corp. (0081); Wilshire Restaurant Group LLC (0938); PMCI Promotions LLC (7308); Marie Callender Pie Shops, Inc. (7414); Marie Callender Wholesalers, Inc. (1978); MACAL Investors, Inc. (4225); MCID, Inc. (2015); Wilshire Beverage, Inc. (5887); and FIV Corp. (3448). The mailing address for the Debtors is 6075 Poplar Avenue, Suite 800, Memphis, TN 38119.
2

Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Motion.

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requested in the Motion is necessary to avoid immediate and irreparable harm. Accordingly, it is hereby, ORDERED, ADJUDGED AND DECREED that: 1. 2. The Motion is granted. The Debtors are authorized, but not required, in their discretion, to pay in the

ordinary course of the Debtors business the Shipping and Warehouse Claims in an aggregate amount not to exceed $175,000. 3. Unless otherwise waived by the Debtors (after the Debtors have provided five (5)

business days notice to the Restructuring Support Parties), in their sole discretion, any Shipper and Warehouseman that accepts any payments made by the Debtors on account of its Shipping and Warehouse Claim, in return for the payment thereof, shall continue to provide services to the Debtors during the pendency of the Chapter 11 Cases on the Historical Trade Terms (or such other terms as are agreed to by the Debtor and such party) and shall waive and release any previously asserted lien on the assets of the Debtors. 4. If any Shipper and Warehouseman accepts payment on account of its Shipping

and Warehouse Claim and thereafter does not continue to provide services to the Debtors on the Historical Trade Terms (or such other terms as are agreed to by the Debtor and such party), then the Debtors may, in their sole discretion and without further order of the Court: (a) declare that any payments made to such Shipper and Warehouseman on account of its Shipping and Warehouse Claim be deemed to have been in payment of any then-outstanding (or subsequently accruing) postpetition claims of such party without further action by any person or entity; and (b) recover any payments made to such Shipper and Warehouseman on account of its Shipping and Warehouse Claim to the extent that such payments exceeded the undisputed postpetition

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claims of such Shipper and Warehouseman, without giving effect to any rights of setoff or recoupment, claims, provision for payment of reclamation or trust fund claims or other defenses. Under any such circumstances, such Shipper and Warehouseman shall immediately repay to the Debtors any payment made to it on account of its Shipping and Warehouse Claim to the extent that such payments exceed any undisputed post-petition claims of such Shipper and Warehouseman then outstanding or subsequently accruing, without giving effect to any rights of setoff or recoupment, claims, provision for payment of reclamation or trust fund claims, or other defenses. Upon recovery of any such payments by the Debtors, the applicable portion of the Shipping and Warehouse Claim shall be reinstated as a pre-petition claim in the amount recovered by the Debtors. Nothing herein shall constitute a waiver of the Debtors rights to seek damages or other appropriate remedies against any Shipper and Warehouseman. 5. The Debtors banks shall be, and hereby are, authorized, when requested by the

Debtors in their sole discretion, to process, honor, and pay any and all checks or electronic fund transfers drawn on the Debtors bank accounts to pay any payments approved by this Order, including, without limitation, those related to the Shipping and Warehouse Claims, whether those checks were presented prior to or after the Petition Date, provided that sufficient funds are available in the applicable accounts to make the payments. 6. The Debtors banks may rely on the representations of the Debtors with respect to

whether any check or other transfer drawn or issued by the Debtors prior to the Petition Date should be honored pursuant to this Order, and any such bank shall not have any liability to any party for relying on such representations by the Debtors as provided for in this Order. 7. Nothing in the Motion or this Order, nor the Debtors payment of any claims

pursuant to this Order, shall be deemed or construed as: (a) an admission as to the validity of any

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claim against the Debtors; (b) a waiver of the Debtors rights to dispute any claim; or (c) an approval or assumption of any agreement, contract or lease, pursuant to section 365 of the Bankruptcy Code. 8. Notwithstanding anything to the contrary in this Order, any payment made or to

be made under this Order, and any authorization contained in this Order, shall be subject to the requirements imposed on the Debtors under any Order(s) of this Court approving the Debtors debtor-in-possession financing facility and use of cash collateral and any budget in connection therewith. 9. The Debtors are authorized and empowered to take all actions necessary to

implement the relief granted in this Order. 10. 11. The requirements set forth in Bankruptcy Rule 6003(b) are satisfied. Notwithstanding any applicability of Bankruptcy Rule 6004(h), the terms and

conditions of this Order shall be immediately effective and enforceable upon its entry. 12. This Court shall retain jurisdiction with respect to all matters arising from or

related to the interpretation and implementation of this Order. Date: June _____, 2011 UNITED STATES BANKRUPTCY JUDGE

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