In re Bravo Brio Restaurants, LLC, et al.

Summary

The United States Bankruptcy Court for the Middle District of Florida estimates inKind’s claims at $0 and sustains the debtors’ objection to those claims. The court concludes that, under the parties’ Delaware-law Credit Purchase Agreement, Bravo Brio’s liability was limited to credit purchased from Bravo Brio and that more than that amount had already been redeemed. The court also rejects inKind’s objections concerning service and adequacy of the disclosure statement and confirms the debtors’ joint plan of reorganization.

Holdings

1. The court may estimate an unliquidated or contingent claim under section 502(c) when liquidation would unduly delay administration, and may temporarily allow a disputed claim under Rule 3018 for voting purposes. Applying those provisions, inKind's claims were estimated at $0 for all purposes.
2. Under Delaware contract law, the agreement made BBR responsible for damages based on unredeemed credit actually purchased from BBR, not credit purchased from the sister merchants.
3. The disclosure statement satisfied the adequate-information requirement, and any failure to send inKind the statement by first-class mail was harmless because inKind's counsel received it electronically before solicitation and inKind had a meaningful opportunity to object.
4. The debtors satisfied the applicable requirements of 11 U.S.C. § 1129, including compliance with the Code, good faith, the best-interests test, acceptance by an impaired class, and feasibility; the plan was therefore confirmed.

Questions Presented

1. How should inKind's unliquidated claims be estimated under 11 U.S.C. § 502(c) and Federal Rule of Bankruptcy Procedure 3018?
2. Under the Credit Purchase Agreement, did BBR owe damages for unredeemed credit sold by sister merchants, and did inKind have an enforceable claim against the debtors?
3. Did inKind's claims and any asserted liens require treatment as secured or unsecured claims under the plan?
4. Did the debtors provide adequate notice and adequate information for approval of the disclosure statement?
5. Did the debtors satisfy the applicable requirements of 11 U.S.C. § 1129 for confirmation of the chapter 11 plan?

Disposition

approved