In re

UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE
Chapter 11
BACK YARD BURGERS, INC., et a/.
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Case No. 12-12882 (PJW)
Debtors.
(Joint Administration Pending)
Ref. Docket No. I l
INTERM ORDER (A) AUTHORIZING, BUT NOT DIRECTING, THE DEBTORS TO
PAY ALL OR A PORTION OF THE PREPETITION CLAIMS OF CERTAIN
CRITICAL VENDORS, AND (B) AUTHORIZING FINANCIAL INSTITUTIONS
TO HONOR AND PROCESS RELATED CHECKS AND TRANSFERS
Upon the motion (the "Motion")
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filed by the above-captioned debtors and debtors-in-
possession (collectively, the "Debtors") pursuant to sections 105(a), 363, 1107, and 1108 oftitle 11
of the United States Code, 11 U.S.C. 101, et seq. (the "Bankruptcy Code") and Rules 6003 and
6004(h) of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules") for entry of an
order: (a) authorizing, but not directing, the Debtors to pay all or a portion of the prepetition claims of
certain Critical Vendors (as defined below), (b) authorizing financial institutions to honor and
process related checks and transfers, and (c) providing any additional relief required in order to
effectuate the foregoing; having reviewed the Motion; and upon the Declaration of James E.
Boyd, Jr. in Support of the Debtors' Chapter 11 Petitions and Requests for First Day Relief (the
"First Day Declaration"); and it appearing that this Court has jurisdiction to consider the
Motion pursuant to 28 U.S.C. 157 and 1334; and it appearing that venue of these cases and
the Motion in this district is proper pursuant to 28 U.S.C. 1408 and 1409; and it appearing
The Debtors in these chapter 11 Cases, along with the last four digits of each Debtor's federal tax
identification number, are: Back Yard Burgers, Inc. (7163), BYB Properties, Inc. (9046), Nashville BYB, LLC (6507)
and Little Rock Back Yard Burgers, Inc. (9133). The mailing address of the Debtors is: St. Clouds Building, 500
Church Street, Suite 200, Nashville, TN 37219.
Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Motion.
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that this matter is a core proceeding pursuant to 28 U.S.C. 157(b); and this Court having
determined that the relief requested in the Motion is in the best interests of the Debtors, their
estates, their creditors and other parties in interest; and it appearing that proper and adequate
notice of the Motion has been given and that no other or further notice is necessary; and after due
deliberation thereon; and good and sufficient cause appearing therefor,
IT IS HEREBY ORDERED THAT:
1. For the reasons set forth on the record, the Motion is GRANTED as set forth
herein on an interim basis.
2. Pursuant to sections 105(a), 363(b), 1107 and 1108 of the Bankruptcy Code, the
Debtors are authorized, but not directed, in the reasonable exercise of their business judgment, to
pay each Critical Vendor in the ordinary course of business.
3. The Debtors shall only make payment on account of Critical Vendor Claims to
Critical Vendors who agree to continue to supply goods or services to the Debtors on such
Critical Vendor's Governing Trade Terms. As used herein, "Governing Trade Terms" means,
with respect to a Critical Vendor: (a) the normal and customary trade terms, practices and
programs (including, but not limited to, credit limits, pricing, cash discounts, timing of
payments, allowances, rebates, coupon reconciliation, normal product mix and availability, and
other applicable terms and programs), that were most favorable to the Debtors and in effect
between such Critical Vend or and the Debtors prior to the Petition Date; or (b) such other trade
terms that are agreed to by the Debtors and such Critical Vendor.
4. The Debtors shall maintain a matrix summarizing (a) the name of each Critical
Vendor paid on account of Critical Vendor Claims, (b) the amount paid to each Critical Vendor
on account of its Critical Vendor Claim and (c) the goods or services provided by such Critical
Vendor. This matrix will periodically be provided to the following parties (together, the "Notice
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Parties"): the United States Trustee for the District of Delaware (the "U.S. Trustee"),
professionals retained by the official committee of unsecured creditors appointed in these cases
(the "Committee"), if any, and counsel to the Debtors' postpetition lenders, provided, however,
that the Notice Parties shall keep the matrix confidential and shall not disclose any of the
information in the matrix to anyone, including, but not limited to, any member of the Committee,
without prior written consent from the Debtors.
5. The Debtors shall undertake all appropriate efforts to cause Critical Vendors to
enter into an agreement (the "Vendor Agreement") including provisions substantially similar to
the form attached to the Motion as Exhibit "A".
6. The Debtors are authorized, but not directed, to enter into Vendor Agreements
when the Debtors determine, in the exercise of their reasonable business judgment, that it is
appropriate to do so. However, the Debtors' inability to enter into a Vendor Agreement shall not
preclude them from paying a Critical Vendor Claim when, in the exercise of their reasonable
business judgment, such payment is necessary to the Debtors' operations.
7. If a Critical Vendor that has received payment of a prepetition claim later refuses
to continue to supply goods or services for the applicable period in compliance with the Vendor
Agreement or this Order, then (a) the Debtors may, in their discretion, declare that the payment
of the creditor's Critical Vendor Claim is a voidable postpetition transfer pursuant to section
549(a) of the Bankruptcy Code that the Debtors may recover in cash or in goods from such
Critical Vendor, (b) the Debtors may then take any and all appropriate steps to cause such
Critical Vendor to repay payments made to it on account of its prepetition trade claims to the
extent that such payments exceed the postpetition amounts then owing to such Critical Vendor
without giving effect to alleged setoff rights, recoupment rights, adjustments, or offsets of any
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type whatsoever, and (c) the Critical Vendor Claim shall be reinstated in such an amount so as to
restore the Debtors and the Critical Vendor to their original positions as if the Vendor Agreement
had never been entered into and no payment of the Critical Vendor Claim had been made.
8. Each of the banks and financial institutions at which the Debtors maintain their
accounts relating to the payment of the claims that the Debtors request authority to pay in the
Motion are authorized to receive, process, honor and pay all checks presented for payment and to
honor all fund transfer requests made by the Debtors related thereto, to the extent that sufficient
funds are on deposit in those accounts, and are authorized to rely on the Debtors designation of
any particular check as approved by this Order.
9. Notwithstanding anything to the contrary contained herein any payment to be
made, or authorization contained, hereunder shall be subject to the requirements imposed on the
Debtors under any approved debtor-in-possession financing facility, or any order regarding the
Debtors' postpetition financing or use of cash collateral.
10. During the interim period, the Debtors will not make payments to Critical
Vendors in excess of $210,000 in the aggregate.
11. Rule 6003(b) of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy
Rules") has been satisfied because the relief requested in the Motion is necessary to avoid
immediate and irreparable harm to the Debtors.
12. Notwithstanding any applicability of Bankruptcy Rule 6004(h), the terms and
conditions of this Order shall be immediately effective and enforceable upon its entry.
13. This Court shall retain jurisdiction with respect to all matters arising from or
relating to the interpretation or implementation of this Order.
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1. Any objections to entry of a final order granting the relief requested in the Motion
shall be filed and served upon counsel for the Debtors by 5:00p.m. (Prevailing Eastern Time) on
No J , 6, 2012. In the event no objections are filed, a final order shall be entered without
further notice or a hearing. In the event that any objection is timely filed, a hearing will be held
on Nov. 2012 at I Eastern Time).
Dated: Octobe{-f 2012
UNITED STATES BANKRUPTCY JUDGE
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