In re

UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE
BACKYARD BURGERS, INC., et al.
1
Chapter 11
Case No. 12-12882 (PJW)
Debtors.
(Joint Administration Pending)
APPLICATION OF THE DEBTORS FOR ORDER PURSUANT TO
28 U.S.C. 156(c) AUTHORIZING THE RETENTION AND APPOINTMENT
OF RUST CONSULTING/OMNI BANKRUPTCY AS CLAIMS AND
NOTICING AGENT TO THE DEBTORS, EFFECTIVE
NUNC PRO TUNC TO THE PETITION DATE
The above-captioned debtors and debtors-in-possession (collectively, the "Debtors")
hereby submit this application (the "Application") pursuant to section 156(c) of title 28 of the
United States Code (the "Bankruptcy Code") and the Rule 2002-1 (f) of the Local Rules of
Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of
Delaware (the "Local Rules") for entry of an order: (a) authorizing and approving the retention
and appointment of Rust Consulting/Omni Bankruptcy ("Rust Omni") as claims and noticing
agent for the Clerk (the "Clerk") of the United States Bankruptcy Court for the District of
Delaware (the "Bankruptcy Court"); and (b) providing any additional relief required in order to
effectuate the foregoing. In support of this Application, the Debtors rely on the Declaration of
Paul Deutch In Support Of Application Of Debtors For Order Pursuant To 28 USC. 156(c)
Authorizing The Retention And Appointment Of Rust Consulting/Omni Bankruptcy As Claims
And Noticing Agent To The Debtors, Effective Nunc Pro Tunc To The Petition Date (the "Deutch
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 3 7219.
Declaration") attached hereto as Exhibit "A" and incorporated herein by reference. In further
support of the Application, the Debtors respectfully state as follows:
Status of the Case
1. On the date hereof (the "Petition Date"), each of the Debtors filed a voluntary
petition for relief under chapter 11 of title 11 of the United States Code, 11 U.S.C. 101-1532
(the "Bankruptcy Code").
2. The Debtors have continued in possession of their properties and are operating
and managing their business as debtors-in-possession pursuant to sections 1107(a) and 1108 of
the Bankruptcy Code.
3. No request has been made for the appointment of a trustee or examiner, and a
creditors' committee has not yet been appointed in these cases.
Jurisdiction, Venue, and Statutory Predicates
4. The Court has jurisdiction over this Application pursuant to 28 U.S.C. 157 and
1334. Venue is proper in this district pursuant to 28 U.S.C. 1408 and 1409. This matter is
core within the meaning of28 U.S.C. 157(b)(2).
5. The statutory predicates for the relief requested herein are section 156(c) of title
28 ofthe United States Code, 105(a) ofthe Bankruptcy Code, and Rule 2002-1() ofthe Local
Rules.
Background
6. The Debtors are an established quick-service restaurant chain with approximately
90 locations concentrated in the Southeast United States. The Debtors operate company owned
locations and maintain a franchise network of individually owned restaurants which collectively
employ approximately five hundred and twelve (512) employees. Back Yard Burgers began as a
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single restaurant in Cleveland, Mississippi in 1987, and today, the Debtors pride themselves on
having a strong reputation for offering big and bold backyard tastes served straight from the grill
at value prices. The Debtors compete for business by offering black-angus hamburgers and
chicken grilled on-site on charcoal grills, providing savory flavors most usually found only in
neighborhood back yards. Meal offerings include chicken sandwiches, turkey burgers, hot dogs,
salads, sides, and desserts; however, the main focus of the menu is centered on the Debtors'
premium Black Angus burgers.
7. The Debtors own and operate approximately 25 restaurants (excluding franchised
locations), positioned as quick-service dining destinations where families and children can enjoy
a wide variety of freshly prepared meals and desserts for lunch and dinner. Restaurant
operations generated $18.4 million in revenue in the first eight (8) months of 2012 with a $2.4
million EBITDA loss.
8. The Debtors also have contracted with approximately forty-two ( 42) franchisees
to operate more than sixty-four (64) restaurants under franchise agreements. Franchisees are
offered the right to operate a Back Yard Burgers restaurant for an upfront fee, and franchised
locations are operated under strict guidelines to present and preserve a unified brand image.
Franchising offers stable cash flows from the collection of royalties and product purchases,
accounting for approximately $1.3 million in revenue in the first eight (8) months of 2012.
9. In the first nine months of 2012, the Debtors reported a 0.8 percent decline and
1.8 percent incline in same store sales of franchise and company -operated stores, respectively.
In the same segments, the Debtors reported declines of 4.0 percent and 5.7 percent, respectively,
in 2011. These decreases were driven by a decline in guest traffic.
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10. A detailed factual background of the Debtors' businesses and operations, as well
as the events precipitating the commencement of these cases, is more fully set forth in the
Declaration of James E. Boyd, Jr. in Support of the Debtors' Chapter II Petitions and Requests
for First Day Relief (the "First Day Declaration"), filed contemporaneously herewith and
incorporated herein by reference.
Relief Requested
11. This Application is made pursuant to 28 U.S.C. 156(c), section 105(a) of the
Bankruptcy Code and Rule 2002-1 (f) of the Local Rules, for an order appointing Rust Omni as
claims and noticing agent ("Claims and Noticing Agent") in order to assume full responsibility
for the distribution of notices and the maintenance, processing, and docketing of proofs of claim
filed in the Debtors' cases. The Debtors' selection of Rust Omni to act as the Claims and
Noticing Agent satisfies the Court's Protocol for the Employment ofClaims and Noticing Agents
under 28 USC. I56(c), instituted by the Clerk on February 1, 2012 (the "Claims Agent
Protocol").
12. In accordance with the Claims Agent Protocol, prior to the selection of Rust
Omni, the Debtors reviewed and competitively compared engagement proposals from three
court-approved Claims and Noticing Agents, including Rust Omni, to ensure selection through a
competitive process. The Debtors submit, based on the engagement proposals obtained and
reviewed, that Rust Omni's rates are competitive and reasonable given Rust Omni's quality of
services and expertise. The terms of Rust Omni' s retention are set forth in the services
agreement dated October 3, 2012 annexed hereto as Exhibit "B" (the "Retention Agreement");
4
provided however, that Rust Omni is seeking approval solely of the terms and provisions as set
forth in this Application and the proposed order attached hereto
2
.
13. Although the Debtors have not yet filed their schedules of assets and liabilities,
they anticipate that there will be an excess of four hundred ( 400) entities to be noticed. In view
of the number of anticipated claimants and the complexity of the Debtors' businesses, the
Debtors submit that the appointment of a Claims and Noticing Agent is both necessary and in the
best interests of both the Debtors' estates and their creditors.
14. Rust Omni has acted as the Claims and Noticing Agent in numerous cases of
comparable size, including several cases currently pending in the United States Bankruptcy
Court for this District. See In re Allied Systems Holdings, Inc., Case No. 12-11564 (CSS) (Bankr.
D. Del. July 6, 2012); In re Fastship, Inc., Case No. 12-10968 (BLS) (Bank. D. Del. March 20,
2012); In re Perkins Marie Callender's, Case No. 11-11795 (KG) (Bankr. D. Del. June 14,
2011); In re Mervyn's Holding, Inc., Case No. 08-11586 (KG) (Bankr. D. Del. July 30, 2008).
3
15. By appointing Rust Omni as the Claims and Noticing Agent in these cases, the
distribution of notices and the processing of claims will be expedited, and the Clerk's office will
be relieved of the administrative burden of processing what may be an overwhelming number of
claims. In support of this Application, the Debtors submit the Deutch Declaration, attached
hereto as Exhibit "A".
16. This Application pertains only to the work to be performed by Rust Omni under
the Clerk's delegation of duties permitted by 28 U.S.C. 156(c) and Local Rule 2002-1() and
2
The Debtors intend to also file the Application of the Debtors for an Order Authorizing and Approving the
Retention and Employment of Rust Consulting/Omni Bankruptcy as Administrative Agent for the Debtors,
Nunc Pro Tunc to the Petition Date, whereby they will seek to employ Rust Omni to provide certain
bankruptcy administrative services to the Debtors in these cases.
Because of the voluminous nature of the orders cited herein, they are not attached to the Application.
5
any work to be performed by Rust Omni outside of this scope is not covered by this Application
or by any Order granting approval hereof. Specifically, Rust Omni will perform the following
tasks in its role as Claims and Noticing Agent (the "Claims and Noticing Services"), as well as
all quality control relating thereto:
(a) Prepare and serve required notices and documents in the cases in
accordance with the Bankruptcy Code Bankruptcy Rules in the
form and manner directed by the Debtors and/or the Court,
including (i) notice of the commencement of the cases and the
initial meeting of creditors under Bankruptcy Code 34l(a), (ii)
notice of any claims bar date, (iii) notices of transfers of claims,
(iv) notices of objections to claims and objections to transfers of
claims, (v) notices of any hearings on a disclosure statement and
confirmation of the Debtors' plan or plans of reorganization,
including under Rule 3017(d) of the Federal Rules of Bankruptcy
Procedure (the "Bankruptcy Rules"), (vi) notice of the effective
date of any plan and (vii) all other notices, orders, pleadings,
publications and other documents as the Debtors or Court may
deem necessary or appropriate for an orderly administration of the
cases;
(b) Maintain an official copy of the Debtors' schedules of assets and
liabilities and statement of financial affairs (collectively,
"Schedules"), listing the Debtors' known creditors and the
amounts owed thereto;
(c) Maintain (i) a list of all potential creditors, equity holders and
other parties-in-interest; and (ii) a "core" mailing list consisting of
all parties described in Bankruptcy Rules 2002(i), G) and (k) and
those parties that have filed a notice of appearance pursuant to
Bankruptcy Rule 901 0; update said lists and make said lists
available upon request by a party-in-interest or the Clerk;
(d) Furnish a notice to all potential creditors of the last date for the
filing of proofs of claim and a form for the filing of a proof of
claim, after such notice and form are approved by this Court, and
notify said potential creditors of the existence, amount and
classification of their respective claims as set forth in the
Schedules, which may be effected by inclusion of such
information (or the lack thereof, in cases where the Schedules
indicate no debt due to the subject party) on a customized proof of
claim form provided to potential creditors;
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(e) Maintain a post office box or address for the purpose of receiving
claims and returned mail, and process all mail received;
(f) For all notices, motions, orders or other pleadings or documents
served, prepare and file or caused to be filed with the Clerk an
affidavit or certificate of service within seven (7) business days of
service which includes (i) either a copy of the notice served or the
docket numbers(s) and title(s) of the pleading(s) served, (ii) a list
of persons to whom it was mailed (in alphabetical order) with their
addresses, (iii) the manner of service, and (iv) the date served;
(g) Process all proofs of claim received, including those received by
the Clerk's Office, and check said processing for accuracy, and
maintain the original proofs of claim in a secure area;
(h) Maintain the official claims register for each Debtor (the "Claims
Registers") on behalf of the Clerk; upon the Clerk's request,
provide the Clerk with certified, duplicate unofficial Claims
Registers; and specify in the Claims Registers the following
information for each claim docketed: (i) the claim number
assigned, (ii) the date received, (iii) the name and address of the
claimant and agent, if applicable, who filed the claim, (iv) the
amount asserted, (v) the asserted classification(s) of the claim
(e.g., secured, unsecured, priority, etc.), (vi) the applicable Debtor,
and (vii) any disposition of the claim;
(i) Implement necessary security measures to ensure the completeness
and integrity of the Claims Registers and the safekeeping of the
original claims;
G) Record all transfers of claims and provide any notices of such
transfers as required by Bankruptcy Rule 300l(e);
(k) Relocate, by messenger or overnight delivery, all ofthe court-filed
proofs of claim to the offices of Claims and Noticing Agent, not
less than weekly;
(1) Upon completion of the docketing process for all claims received
to date for each case, turn over to the Clerk copies of the claims
register for the Clerk's review (upon the Clerk's request);
(m) Monitor the Court's docket for all notices of appearance, address
changes, and claims-related pleadings and orders filed and make
necessary notations on and/or changes to the claims register;
(n) Assist in the dissemination of information to the public and
respond to requests for administrative information regarding the
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case as directed by the Debtors or the Court, including through the
use of a case website and/or call center;
( o) If the case is converted to chapter 7, contact the Clerk's Office
within three (3) days of the notice to Claims and Noticing Agent of
entry of the order converting the case;
(p) Thirty (30) days prior to the close of these cases, to the extent
practicable, request that the Debtors submit to the Court a
proposed Order dismissing the Claims and Noticing Agent and
terminating the services of such agent upon completion of its
duties and responsibilities and upon the closing of these cases;
(q) Within seven (7) days of notice to Claims and Noticing Agent of
entry of an order closing the chapter 11 cases, provide to the Court
the final version of the claims register as of the date immediately
before the close of the cases; and
(r) At the close of these cases, box and transport all original
documents, in proper format, as provided by the Clerk's Office, to
(i) the Federal Archives Record Administration, located at Central
Plains Region, 200 Space Center Drive, Lee's Summit, MO 64064
or (ii) any other location requested by the Clerk's Office.
17. The Claims Registers shall be opened to the public for examination without
charge during regular business hours and on a case-specific website maintained by Rust Omni.
18. Rust Omni shall not employ any past or present employee of the Debtors for work
that involves the Debtors' bankruptcy cases.
19. The Debtors respectfully request that the undisputed fees and expenses incurred
by Rust Omni in the performance of the above services be treated as administrative expenses of
the Debtors' estates pursuant to 28 U.S.C. 156(c) and 11 U.S.C. 503(b)(l)(A) and be paid in
the ordinary course of business without further application to or order of the Court. Rust Omni
agrees to maintain records of all services showing dates, categories of services, fees charged and
expenses incurred, and to serve monthly invoices on the Debtors, the office of the United States
Trustee, counsel for the Debtors, counsel for any official committee, if any, monitoring the
expenses of the Debtors and any party-in-interest who specifically requests service of the
8
monthly invoices. If any dispute arises relating to the Retention Agreement or monthly invoices,
the parties shall meet and confer in an attempt to resolve the dispute; if resolution is not
achieved, the parties may seek resolution of the matter from the Court.
20. Prior to the Petition Date, the Debtors provided Rust Omni a retainer in the
amount of $10,000 (the "Retainer"). Immediately prior to the filing, Rust Omni applied the
Retainer to the payment of all fees and expenses incurred in relation to the preparation of these
chapter 11 cases. The remaining balance of the Retainer, if any, will be applied to the payment
of Rust Omni's first invoice for post-petition services performed on behalf of the Debtors.
21. In connection with its retention as Claims and Noticing Agent, Rust Omni
represents in the Deutch Declaration, among other things, that:
(a) Rust Omni will not consider itself employed by the United States
government and shall not seek any compensation from the United
States government in its capacity as the Claims and Noticing
Agent in the cases;
(b) By accepting employment in the cases, Rust Omni waives any
rights to receive compensation from the United States government
in connection with the Debtors' cases;
(c) In its capacity as the Claims and Noticing Agent in the cases, Rust
Omni will not be an agent of the United States and will not act on
behalf of the United States; and
(d) It is a "disinterested person" as that term is defined in section
1 01 (14) of the Bankruptcy Code with respect to the matters upon
which it is to be engaged.
22. To the extent that there is any inconsistency between this Application, the
Retention Order and the Retention Agreement, the Retention Order shall govern.
23. This Application complies with the Claims Agent Protocol and conforms to the
standard section 156( c) application in use in this Court.
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Notice
24. Notice of this Motion has been given to the following parties or, in lieu thereof, to
their counsel, if known: (a) the Office of the United States Trustee for the District of Delaware;
(b) counsel to Harbert Mezzanine Partners, L.P., as the Debtors' prepetition lenders; (c) counsel
to Pharos Capital Partners II, L.P. and Pharos Capital Partners II-A, L.P., as the Debtors'
postpetition lenders; (d) creditors holding the thirty (30) largest unsecured claims as set forth in
the consolidated list filed with the Debtors' petitions; (e) those parties requesting notice pursuant
to Rule 2002; (f) the Office of the United States Attorney General for the District of Delaware;
and (g) the Internal Revenue Service. As the Application is seeking "first day" relief, within two
(2) business days of the hearing on the Application, the Debtors will serve copies of the
Application and any order entered respecting the Application in accordance with the Local
Rules. The Debtors submit that, in light of the nature of the relief requested, no other or further
notice need be given.
No Prior Request
25. No prior request for the relief sought in this Application has been made to this or
any other court.
[Signature on next page]
10
Conclusion
WHEREFORE, the Debtors respectfully request that the Court enter an order appointing
Rust Omni to act as Claims and Noticing Agent for the maintenance and processing of claims
and distribution of notices.
Dated: October 17, 2012
BBAC, LLC, et al.,
Deb. d Debtors-in-Pass
; ; : / ~
s . Boyd, Jr.
C ef Executive Officer
11
EXHIBIT A
The Deutch Declaration
12
In re
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
Chapter 11
BACKYARD BURGERS, INC., et al.
1
Case No. 12-12882 (PJW)
Debtors.
(Joint Administration Pending)
DECLARATION OF PAUL DEUTCH IN SUPPORT OF
APPLICATION OF THE DEBTORS FOR ORDER PURSUANT TO 28 U.S.C.
156(c) AUTHORIZING THE RETENTION AND APPOINTMENT OF
RUST CONSULTING/OMNI BANKRUPTCY AS CLAIMS AND NOTICING
AGENT TO THE DEBTORS, NUNC PRO TUNC TO THE PETITION DATE
Paul Deutch, hereby declares, under penalty of perjury, as follows:
1. I am the Executive Managing Director of Rust Consulting/Omni Bankruptcy
("Rust Omni"), whose offices are located at 1120 Avenue of the America's, 4th Floor, New
York, NY 10036. The matters set forth herein are made of my own personal knowledge and, if
called and sworn as a witness, I could and would testify competently thereto.
2
2. This declaration is submitted in support of the Application of the Debtors for
Order Pursuant to 28 USC 156(c) Authorizing the Retention and Appointment of Rust
Consulting/Omni Bankruptcy as Claims and Noticing Agent to The Debtors, Nunc Pro Tunc to
the Petition Date (the "Application")
3
, which has been filed contemporaneously herewith.
2
3. As agent and custodian of the Court records pursuant to 28 U.S.C. 156(c), Rust
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 3 7219.
Certain of the disclosures herein relate to matters within the knowledge of other professionals at Rust
Omni and are based on information provided by them.
Capitalized terms not defined herein shall have the meaning ascribed to them in the Application.
Omni will perform at the request of the Office of the Clerk of the Court (the "Clerk's Office")
the noticing and claims related services specified in the Application and the Retention
Agreement. In addition, at the Debtors' request, Rust Omni will perform such other claims and
noticing services specified in the Application.
4. Rust Omni is one of the country's leading chapter 11 administrators, with
experience in noticing, claims administration, solicitation, balloting, and facilitating other
administrative aspects of chapter 11 cases. Rust Omni has acted as the claims and noticing agent
("Claims and Notice Agent") in numerous cases of comparable size in a variety of jurisdictions,
such as: See In re Allied Systems Holdings, Inc., Case No. 12-11564 (CSS) (Bankr. D. Del. July
6, 2012); In re Fastship, Inc., Case No. 12-10968 (BLS) (Bank. D. Del. March 20, 2012); In re
Perkins Marie Callender's, Case No. 11-11795 (KG) (Bankr. D. Del. June 14, 2011); In re
Mervyn's Holding, Inc., Case No. 08-11586 (KG) (Bankr. D. Del. July 30, 2008).
4
4
5. Rust Omni represents, among other things, the following:
a. Rust Omni neither holds nor represents any interest adverse to the
Debtors' estates in connection with any matters for which Rust
Omni will be employed;
b. I am not related or connected to and, to the best of my
knowledge, no other professional of Rust Omni is related to or
connected to any United States Bankruptcy Judge for the District
of Delaware or the United States Trustee or to any employee in
the offices thereof;
c. Rust Omni will not consider itself employed by the United States
government and shall not seek any compensation from the United
States government in its capacity as the Claims and Noticing
Agent in these chapter 11 cases;
d. by accepting employment in these chapter 11 cases, Rust Omni
waives any rights to receive compensation from the United States
government;
Because of the voluminous nature of the orders cited herein, they are not attached to the Application.
2
e. in its capacity as the Claims and Noticing Agent in these chapter
11 cases, Rust Omni will not be an agent of the United States and
will not act on behalf of the United States;
f. Rust Omni will not employ any past or present employees of the
Debtors in connection with its work as the Claims and Noticing
Agent in these chapter 11 cases;
g. in its capacity as Claims and Noticing Agent in these chapter 11
cases, Rust Omni will not intentionally misrepresent any fact to
any person;
h. Rust Omni shall be under the supervision and control of the
Clerk's Office with respect to the receipt and recordation of
claims and claim transfers; and
1. none of the services provided by Rust Omni as Claims and
Noticing Agent shall be at the expense of the Clerk's Office.
6. The Debtors have many creditors, and accordingly, Rust Omni may have rendered
and may continue to render services to certain of these creditors in matters unrelated to these
cases, either as vendors or in cases where Rust Omni serves in a neutral capacity as a bankruptcy
Claims and Noticing Agent or class action settlement administrator. Rust Omni has not and will
not represent the separate interest of any such creditor in these cases. To the best of my
knowledge, neither Rust Omni, nor any of its professional personnel, has any relationship with
the Debtors that would impair Rust Omni's ability to perform as Claims and Noticing Agent in
the chapter 11 cases. Rust Omni has working relationships with certain of the professionals
retained by the Debtors and other parties herein, but such relationships are completely unrelated
to the Debtors' cases. In addition, Rust Omni personnel may have relationships with some of the
Debtors' creditors. Such relationships are, however, of a personal, financial nature and are
wholly unrelated to the Debtors' cases. Rust Omni has and will continue to represent clients in
matters unrelated to the Debtors' cases and has had and will continue to have relationships in the
ordinary course of its business with certain vendors and professionals in connection with matters
unrelated to these cases.
3
~ - - - - - - - - - - - - - - - - - - -
7. To the best of my knowledge and except as provided herein, Rust Omni neither
holds nor represents any interest materially adverse to the Debtors' estates in connection with
any matter on which it would be employed and that it is a "disinterested person," as that term is
defined in Bankruptcy Code 101(14) as modified by Bankruptcy Code 1107(b). Rust Omni
will supplement its disclosure to the Court if any facts or circumstances are discovered that
require additional disclosure.
8. In performing the services set forth in the Application, Rust Omni will charge the
Debtors the rates set forth in the Retention Agreement, which is attached as Exhibit "B" to the
Application.
9. Prior to the Petition Date, the Debtors provided Rust Omni a retainer in the
amount of$10,000. Rust Omni seeks to hold the retainer under the Retention Agreement during
the cases as security for the payment of fees and expenses incurred under the Retention
Agreement.
10. Rust Omni will comply with all requests of the Clerk's Office and the guidelines
promulgated by the Judicial Conference of the United States for the implementation of 28
U.S.C. 156(c).
11. The services provided by Rust Omni will be administrative in nature and Rust
Omni will not provide services in the nature of legal representation or advice to the Debtors.
12. Pursuant to 28 U.S.C. 1746, I declare under penalty of perjury that the
aul Deutch
Executive Managing Director, Rust Omni
FTL 108874641v16
4
EXHIBIT B
Retention Agreement
5
I
RUST!Omni
:., (; 1:-i U :. T: (.; C .1 /': 11 ,,, >f I; {'c 'i :.:. ,
October 3, 2012
Laura S. Derise, Esq.
Associate Legal Counsel
Back Yard Burgers, Inc.
St. Cloud Corner
500 Church Street, Suite 200
Nashville, TN 37219
Dear Laura:
Re: Rust Consulting/Omni Bankruptcy
-Retention letter
This letter (the "Agreement") wi II acknowledge that you have requested Rust
Consulting/Omni Bankruptcy ("Rust Omni'') to provide services to Back Yard Burgers,
Inc., BYB Properties, Inc., Little Rock Back Yard Burgers, Inc., and Nashville BYB, LLC
(collectively, the "Companies") in preparation of, and in connection with, the Companies'
anticipated chapter II filings. Rust Omni will make itself available to the Companies, as
requested, for the purposes of assisting the Companies with pre- and post-petition case
administration matters including preparation and management of the creditor matrix,
preparation of schedules of assets and liabilities and statement of financial affairs, claims
management, noticing, plan solicitation and tabulation, distribution, the development and
maintenance of an informational website and any other services as may be requested by
the Companies.
The services to be rendered by Rust Omni will be billed at our normal hourly rates
which range from $25.00 to $175.00 per hour as per the attached rate sheet. Rates are
adjusted annually on January 2nd of each year, and are subject to increases not to exceed
ten (1 0%) percent per annum. Increases greater than ten (1 0%) percent per annum will be
discussed with you, and be subject to your prior approval, before becoming effective.
For all such services rendered, we require a$ J 0,000 deposit, which such deposit
must be replenished immediately prior to the comrnencement of the Companies' chapter
11 proceedings. All cllarges will be on a po!1al to portal basis plus
expenses. Rust Omni shall be compensated on a monthly basis for those services
performed by Rust Omni during the preceding calendar month. Invoices are payable
Laura S. Derise, Esq.
October 3, 2012
Page 2
upon submission.
I
RUSTjOmni

Each of Rust Ornni and the Companies, on behalf of themselves and their
respective employees, agents, professionals and representatives, agrees to keep
confidential all non-public records, systems, procedures, software and other information
received from the other party in connection with the services provided under this
Agreement; provided, however, that if either patiy reasonably believes that it is required
to produce any such information by order of any govemmental agency or other regulatory
body it may, upon not less than five (5) business clays' written notice to the other party,
release the required information.
The parties understand that the software programs and other materials furnished
by Rust Omni pursuant to this Agreement and/or developed during the course of this
Agreement by Rust Omni are the sole property of Rust Omni. The term ''program" shall
include, without limitation, data processing programs, specifications, applications,
routines, and documentation. The Companies agree not to copy or pennit others to copy
the source code from the support software or any other programs or materials fm11ished
pursuant to this Agreement. The Companies fllliher agree that any ideas, concepts, know-
how or techniques relating to data processing or Rust Omni's perfonnance of its services
developed during the course of its Agreement by Rust Omni shall be the exclusive
property of Rust Omni. Upon the Companies' request at any time or times while this
Agreement is in effect, Rust Omni shall immediately deliver to the Companies and/or the
Companies' retained professionals, at the Companies' expense, any or all of the non-
proprietary data and records held by Rust Omni pursuant to this Agreement, in the form
requested by the Companies.
This Agreement is terminable at will by the parties hereto upon thirty (30) days
written notice. In the event that this Agreement is terminated, regardless of the reason for
such tennination, Rust Omni shall cooperate with the Companies to maintain an orderly
transfer of all records, data and information and record keeping functions, and shall
provide all necessary staff, services and assistance required for an orderly transfer. The
Companies agree to pay for such services in accordance with Rust Omni's then existing
prices for such services.
Laura S. Derise, Esq.
October 3, 2012
Page 3
I
RUST/Omni
'i !;-, .! l. ,... . f.;.::. fi ,., :, ,_ ;;: u 1' i \'
Please acknowledge the above by signing and returning a copy of this letter.
Should you have any questions regarding the above, please do not hesitate to call me.
En c.
cc: Maria Oiconza, Esq.
Brian Osborne
Eric Schwarz
Back Yard Burgers, Inc.
BYB Properties, Inc.
Little Rock Back Yard Burgers, Inc.
Nashville BYB, LLC
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Laura S. Derise, Esq.
Associate Legal Counsel
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re
BACK YARD BURGERS, INC., et al.
1
Chapter 11
Case No. 12-12882 (PJW)
Debtors. (Joint Administration Pending)
Ref. Docket No.
ORDER AUTHORIZING THE RETENTION AND APPOINTMENT
OF RUST CONSUL TING/OMNI BANKRUPTCY AS CLAIMS AND NOTICING
AGENT TO THE DEBTORS, NUNC PRO TUNC TO THE PETITION DATE
Upon the application (the "Application") of Back Yard Burgers, Inc. ("BYB"), one of
the above-captioned debtors and debtors-in-possession (the "Debtors"), for an order authorizing
the retention and appointment of Rust Consulting/Omni Bankruptcy ("Rust Omni") as claims
and noticing agent ("Claims and Noticing Agent"), under 28 U.S.C. 156(c), section 105(a) of
the Bankruptcy Code
2
and Local Rule 2002-1 (f) to, among other things, (i) distribute required
notices to parties in interest, (ii) receive, maintain, docket and otherwise administer the proofs of
claim filed in the Debtors' cases, and (iii) provide such other administrative services - as
required by the Debtors - that would fall within the purview of services to be provided by the
Clerk's Office; and upon the Declaration of Paul Deutch submitted in support of the Application;
and the Debtors having estimated that there are in excess of 400 creditors in these cases, many of
which are expected to file proofs of claim; and it appearing that the receiving, docketing and
maintaining of proofs of claim would be unduly time consuming and burdensome for the Clerk;
2
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 not otherwise defined herein shall have the meanings ascribed to such terms in the
Application.
and the Court being authorized under 28 U.S.C. 156(c) to utilize, at the Debtors' expense,
outside agents and facilities to provide notices to parties in title 11 cases and to receive, docket,
maintain, photocopy and transmit proofs of claim; and the Court being satisfied that Rust Omni
has the capability and experience to provide such services and that Rust Omni does not hold an
interest adverse to the Debtors or the estates respecting the matters upon which it is to be
engaged; and good and sufficient notice of the Application having been given; and no other or
further notice being required; and it appearing that the employment of Rust Omni is in the best
interests of the Debtors, the estates and creditors; and sufficient cause appearing therefor; it is
hereby
ORDERED, that, notwithstanding the terms of the Retention Agreement attached to the
Application, the Application is approved solely as set forth in this Order; and it is further
ORDERED, that the Debtors are authorized to retain Rust Omni nunc pro tunc to the
Petition Date under the terms of the Retention Agreement, and Rust Omni is authorized and
directed to perform noticing services and to receive, maintain, record and otherwise administer
the proofs of claim filed in these cases, and all related tasks, all as described in the Application
(the "Claims and Noticing Services"); and it is further
ORDERED, that Rust Omni shall serve as the custodian of court records and shall be
designated as the authorized repository for all proofs of claim filed in these cases and is
authorized and directed to maintain official claims registers for each of the Debtors and to
provide the Clerk with a certified duplicate thereof upon the request of the Clerk; and it is further
ORDERED, that Rust Omni is authorized and directed to obtain a post office box or
address for the receipt of proofs of claim; and it is further
ORDERED, that Rust Omni is authorized to take such other action to comply with all
duties set forth in the Application; and it is further
ORDERED, that the Debtors are authorized to compensate Rust Omni in accordance
with the terms of the Retention Agreement upon the receipt of reasonably detailed invoices
setting forth the services provided by Rust Omni and the rates charged for each, and to reimburse
Rust Omni for all reasonable and necessary expenses it may incur, upon the presentation of
appropriate documentation, without the need for Rust Omni to file fee applications or otherwise
seek Court approval for the compensation of its services and reimbursement of its expenses; and
it is further
ORDERED, that Rust Omni shall maintain records of all services showing dates,
categories of services, fees charged and expenses incurred, and shall serve monthly invoices on
the Debtors, the office of the United States Trustee, counsel for the Debtors, counsel for any
official committee, if any, monitoring the expenses of the Debtors and any party-in-interest who
specifically requests service of the monthly invoices; and it is further
ORDERED, that the parties shall meet and confer in an attempt to resolve any dispute
which may arise relating to the Retention Agreement or monthly invoices, and that the parties
may seek resolution of the matter from the Court if resolution is not achieved; and it is further
ORDERED, that pursuant to section 503(b)(l)(A) of the Bankruptcy Code, the fees and
expenses of Rust Omni under this Order shall be an administrative expense of the Debtors'
estates; and it is further
ORDERED, that Rust Omni may hold its retainer under the Retention Agreement during
the chapter 11 cases as security for the payment of fees and expenses incurred under the
Retention Agreement; and it is further
ORDERED, that the Debtors shall indemnify Rust Omni under the terms of the
Retention Agreement, as such terms may be modified by this Order; and it is further
ORDERED, that Rust Omni shall not be entitled to indemnification, contribution or
reimbursement pursuant to the Retention Agreement for services other than the services provided
under the Retention Agreement, unless such services and the indemnification, contribution or
reimbursement therefore are approved by the Court; and it is further
ORDERED, that notwithstanding anything to the contrary in the Retention Agreement,
the Debtors shall have no obligation to indemnify Rust Omni, or provide contribution or
reimbursement to Rust Omni, for any claim or expense that is either: (i) judicially determined
(the determination having become final) to have arisen from Rust Omni's gross negligence,
willful misconduct, or fraud; (ii) for a contractual dispute in which the Debtors allege the breach
of Rust Omni's contractual obligations ifthe Court determines that indemnification, contribution
or reimbursement would not be permissible pursuant to In re United Artists Theatre Co., eta!.,
315 F .3d 217 (3d Cir. 2003), or (iii) settled prior to a judicial determination under (i) or (ii), but
determined by this Court, after notice and a hearing, to be a claim or expense for which Rust
Omni should not receive indemnity, contribution or reimbursement under the terms of the
Retention Agreement as modified by this Order; and it is further
ORDERED, that if, before the earlier of (i) the entry of an order confirming a chapter 11
plan in these cases (that order having become a final order no longer subject to appeal), or (ii) the
entry of an order closing these cases, Rust Omni believes that it is entitled to the payment of any
amounts by the Debtors on account of the Debtors' indemnification, contribution or
reimbursement obligations under the Retention Agreement (as modified by this Order), including
without limitation the advancement of defense costs, Rust Omni must file an application therefor
in this Court, and the Debtors may not pay any such amounts to Rust Omni before the entry of an
order by this Court approving the payment. This paragraph is intended only to specify the period
of time under which the Court shall have jurisdiction over any request for fees and expenses by
Rust Omni for indemnification, contribution or reimbursement, and not a provision limiting the
duration of the Debtors' obligation to indemnify Rust Omni. All parties in interest shall retain
the right to object to any demand by Rust Omni for indemnification, contribution or
reimbursement; and it is further
ORDERED, that in the event Rust Omni is unable to provide the services set out in this
order, Rust Omni will immediately notify the Clerk and Debtors' attorney and cause to have all
original proofs of claim and computer information turned over to another Claims and Noticing
Agent with the advice and consent of the Clerk and Debtors' attorney; and it is further
ORDERED, that at the end of any of these cases or upon termination of Rust Omni; and
it is further
ORDERED, that after entry of a termination order, Rust Omni shall be responsible for
archiving all proofs of claim with the Federal Archives Record Administration, if applicable; and
it is further
ORDERED, that the Debtors may submit a separate retention application, pursuant to 11
U.S.C. 327 and/or any applicable law, for work that is to be performed by Rust Omni but is not
specifically authorized by this Order; and it is further
ORDERED, that the Debtors and Rust Omni are authorized to take all actions necessary
to effectuate the relief granted pursuant to this Order in accordance with the Application; and it is
further
ORDERED, that, notwithstanding any term in the Retention Agreement to the contrary,
the Court retains jurisdiction with respect to all matters arising from or related to the
implementation of this Order; and it is further
ORDERED, that Rust Omni shall not cease providing claims processing services during
the case(s) for any reason, including nonpayment, without an order of the Court; and it is further
ORDERED, that in the event of any inconsistency between the Retention Agreement, the
Application and the Order, the Order shall govern.
Dated: , 2012
----------------
PETER J. WALSH
UNITED STATES BANKRUPTCY JUDGE