PQ New York, Inc. and its affiliates (the “Debtors”), owners and operators of U.S.-based restaurants operating under the Le Pain Quotidien brand, sought bankruptcy protection in May with more than $100 million in debt and a grim road ahead due to the global COVID-19 pandemic. Through the efforts of the Debtors, LPQ USA, LLC (an affiliate of Aurify Brands (as “Purchaser”)) and the UCC, the Debtors narrowly-avoided a chapter 7 liquidation, were able to sell much of the business as a going concern, and ultimately confirmed a chapter 11 plan.

As part of the purchase, the Purchaser assumed over 40 leases and intends to resume restaurant operations under the Le Pain Quotidien name, preserving value for a large number of landlords and preserving jobs. S&K, in conjunction with its UCC co-counsel, Morris James, was also able to maximize the value of the Debtors’ estates through extensive negotiations with the Purchaser, which led to an increase in the purchase price and the preservation of certain claims for the direct benefit of unsecured creditors. This allowed the Debtors and the UCC to move forward with a chapter 11 plan.

The chapter 11 plan (the “Plan”), which was crafted and proposed jointly by the Debtors and the UCC, creates a liquidating trust to retain and resolve the preserved claims for the benefit of unsecured creditors.

The Plan received overwhelming support from classes of creditors entitled to vote, and, on September 25, 2020, the bankruptcy court confirmed the Plan at an uncontested hearing.

At the hearing, U.S. Bankruptcy Judge John T. Dorsey commended Debtor and UCC professionals for “getting this company from the brink of chapter 7 to a chapter 11 resolution that preserves jobs and hopefully will get past this COVID-19 pandemic.”

The UCC team was led by Robert J. Gayda, Catherine V. LoTempio, and Andrew Matott in New York, with Eric J. Monzo, Brya M. Keilson. Other professionals who worked on the transaction include:

• Matthew R. Kahn and Bruce Revzin, independent directors of PQ New York, Inc.;
• Mark D. Collins, Mark A. Kurtz, Michael J. Merchant, Jason M. Madron, Brendan J. Schlauch, Sarah E. Silveira, Megan Kenney, Jake M. Crosetto, Philip K. Micha, and Kate Peterson of Richards, Layton & Finger P.A., counsel to PQ New York, Inc.;
• Steven J. Fleming, Chief Restructuring Officer and Brian Koluch, David Ihn, and Jordan Aro of PricewaterhouseCoopers LLP, financial advisor to PQ New York, Inc.;
• Teresa C. Kohl, J. Scott Victor, Craig D. Warznak, Alexander D. Lamm, and Matthew R. DiTosto of SSG Capital Advisors, LLC, investment banker to PQ New York, Inc.;
• William A. Guerrieri of White & Case LLP, counsel to the PQ New York, Inc. equity holders;
• Steven J. Reisman, Wade A. Glover, Evan S. Borenstein, Paul Rosen, Jerry L. Hall, and Cindi M. Giglio of Katten Muchin Rosenman LLP, counsel to Aurify Brands, LLC;· Cynthia Romano of CohnReznick Advisory, financial advisor to Aurify Brands, LLC;
• Domenic E. Pacitti and Morton R. Branzburg of Klehr Harrison Harvey Branzburg LLP, counsel to Aurify Brands, LLC; and
• Cynthia Romano of CohnReznick Advisory, financial advisor to Aurify Brands, LLC