20-12117-mew doc 12 filed 09/11/20 entered 09/11/20 00:18 ... · new postpetition insurance...

MINTZ & GOLD LLP

600 Third Avenue, 25th Floor

New York, New York 10016

Telephone: (212) 696-4848

Facsimile: (212) 696-1231

Andrew R. Gottesman, Esq.

Maria E. Garcia, Esq.

Gabriel Altman, Esq.

Proposed Attorneys for the Debtors

UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF NEW YORK

In re:

COSMOLEDO, LLC, et al.1

Debtors.

Chapter 11

Case No. 20-12117 ( )

(Joint Administration Pending)

MOTION OF THE DEBTORS FOR ENTRY OF ORDER (I) AUTHORIZING THE

DEBTORS TO (A) MAINTAIN INSURANCE POLICIES (B) MAINTAIN

PREPETITION INSURANCE BROKERAGE AGREEMENTS, AND ENTER INTO

NEW POSTPETITION INSURANCE BROKERAGE AGREEMENTS AND (C) PAY

PREPETITION INSURANCE OBLIGATIONS, INCLUDING OBLIGATIONS OWED

FOR DEBTORS’ INSURANCE POLICIES; AND (II) GRANTING RELATED RELIEF

Cosmoledo, LLC (“Cosmoledo”), and its affiliated debtors and debtors in possession in the

above-captioned cases (collectively the “Debtors”), by and through its proposed counsel, Mintz &

Gold LLP, hereby move the Court for entry of an interim order, substantially in the form annexed

hereto (the “Proposed Order”), pursuant to sections 105(a) and 363 of title 11 of the United States

1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax

identification number, include: Cosmoledo, LLC (6787); Breadroll, LLC, (3279); 688 Bronx Commissary, LLC

(6515); 95 Broad Commissary, LLC (2335); 178 Bruckner Commissary, LLC (2581); 8 West Bakery, LLC (6421);

NYC 1294 Third Ave Bakery, LLC (2001); 921 Broadway Bakery, LLC (2352); 1800 Broadway Bakery, LLC (8939);

1535 Third Avenue Bakery, LLC (1011); 2161 Broadway Bakery, LLC (2767); 210 Joralemon Bakery, LLC (4779);

1377 Sixth Avenue Bakery, LLC (9717); 400 Fifth Avenue Bakery, LLC (6378); 1400 Broadway Bakery, LLC

(8529); 575 Lexington Avenue Bakery, LLC (9884); 685 Third Avenue Bakery, LLC (9613); 370 Lexington Avenue

Bakery, LLC (0672); 787 Seventh Avenue Bakery, LLC (6846); 339 Seventh Avenue Bakery, LLC (1406); and 55

Hudson Yards Bakery, LLC (7583).

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Code (the “Bankruptcy Code”), and Rule 6004 of the Federal Rules of Bankruptcy Procedure (the

“Bankruptcy Rules”) (a) authorizing the Debtors to (i) continue prepetition insurance coverage and

enter into new policies, (ii) maintain prepetition premium financing agreements and enter into new

post-petition premium financing agreements, (iii) maintain insurance brokerage agreements and

enter into new post-petition insurance brokerage agreements, and (iv) pay all insurance obligations

in the Debtors’ sole discretion, on account of the Debtors’ insurance coverages provided through

various group insurance policies; and (b) authorizing and directing financial institutions to receive,

process, honor, and pay checks presented for payment and electronic payment requests related

thereto; and (c) granting related relief.

In support of the Motion, the Debtors rely upon and incorporate by reference the

declaration of Jose Alcalay, Chief Executive Officer of Cosmoledo, LLC in Support of Chapter 11

Petitions and First Day Pleadings (the “1007 Declaration”), filed with the Court concurrently

herewith and, respectfully represent as follows:

JURISDICTION AND VENUE

1. This Court has jurisdiction to consider this Motion under 28 U.S.C. §§ 157 and

1334. This is a core proceeding under 28 U.S.C. § 157(b). Venue of this case and this Motion in

this district is proper under 28 U.S.C. §§ 1408 and 1409.

2. The statutory predicates for the relief requested herein are Bankruptcy Code

sections 105, 345 and 363 and Bankruptcy Rules 6003 and 6004.

BACKGROUND

3. On September 10, 2020 the Debtors filed voluntary petitions for relief under chapter

11 of the Bankruptcy Code (the “Petition Date”).

4. The Debtors continue to operate their business and manage their property as debtors

and debtors in The Debtors continue to operate their business and manage their property as a


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debtors and debtors in possession pursuant to Bankruptcy Code §§ 1107(a) and 1108.

Contemporaneously herewith, the Debtors have requested joint administration of these chapter 11

cases. No trustee or examiner has been appointed in this case. No official committee of unsecured

creditors has been appointed.

5. The Debtors own and operate sixteen (16) fine casual bakery cafés in New York

City under the trade name “Maison Kayser.” Maison Kayser, a global brand, is an authentic

artisanal French boulangerie that has been doing business in New York since 2012. Despite its

loyal customer base, the Debtors’ production and operational costs required a reorganization of

their production facilities and store level management that was completed throughout 2019 into

early 2020. At approximately the same time this restructuring was nearing completion, Governor

Cuomo declared a state of emergency for the State of New York which required the Debtors to

temporarily cease operations.2 The Debtors determined that there was too great a risk that future

operations would fail to generate sufficient capital to repay their obligations in the ordinary course

of business and continue profitable operations in the near term. Accordingly, the Debtors decided

to not reopen their cafés and began seeking restructuring alternatives in mid-July.

6. The Debtors filed these cases to seek approval of a sale of the Debtor’s assets and

effectuate an orderly liquidation of the remainder of their assets. These cases are necessary to

protect the Debtors’ assets in order to maximize the value of their estates. Without the protection

available under of the Bankruptcy Code, the Debtors would undoubtedly face the immediate and

irreparable reduction of their asset base, including their interests under the non-residential leases

for many of their stores. The Debtors also face the potentially exorbitant cost of state court

litigation by multiple unpaid creditors. The Debtors filed a motion, concurrently herewith, for

2 See New York State Exec. Order No. 202, dated March 7, 2020.


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approval of bidding procedures and ultimately a sale of substantially all of their assets (the “363

Motion”). The Debtors hope to have the 363 Motion approved and the sale contemplated therein

quickly and follow a closing with confirmation of a liquidating plan.

7. Additional facts regarding the Debtors’ business, the events leading up to the

Petition Date and the facts and circumstances supporting the relief requested herein are set forth

in the 1007 Declaration.

THE DEBTORS’ INSURANCE POLICIES

8. The Debtors maintain various liability, property, casualty, workers’ compensation,

and other insurance programs in the ordinary course of their businesses, which are maintained on

a group basis (collectively, the “Insurance Policies”) that are provided and/or administered by

multiple third-party insurance carriers (collectively, the “Insurance Carriers”). The Insurance

Programs include coverage for, among other things, professional liability, operation of

automobiles, workers’ compensation,3 crime, breach of fiduciary duty by officers or directors,

cyber security, property damage and business interruption, contaminated products, and various

other general liability coverages.

9. A schedule of the current Insurance Policies, policy terms, and annual premium

amounts is attached hereto as Exhibit A.4 In general terms, the Debtors’ coverage can be described

as follows:

3 To the extent such authority is not already covered by the Motion of Debtors Pursuant to 11 U.S.C 105(a)

363(b), 507(a) and For Entry of Interim and Final Orders Authorizing (a) Payment of Prepetition Wages, Salaries,

Employee Benefits, and Other Compensation, (b) Maintenance of Employee Benefit Programs and Directing Financial

Institutions to Honor and Process Checks and Transfers Related to Such Obligations, which is being filed

contemporaneously herewith, Debtors seek authority to maintain workers’ compensation coverage and to pay

prepetition amounts related thereto pursuant to this Motion.

4 The Insurance Policies are sometimes maintained on an enterprise basis and can include coverage for one or

more Debtors. To the extent that a policy covers more than one legal entity, the Debtors generally allocate the cost to

the applicable legal entity in their books and records. Furthermore, although Exhibit A is intended to be

comprehensive, Debtors may have inadvertently omitted one or more Insurance Policies. By this Motion, Debtors


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a. D&O Insurance. The Debtors maintain two insurance policies for their directors

and officers (collectively, the “D&O Insurance Policies”). The D&O Insurance

Policies run through January 17, 2021, with the extended reporting policy running

through January 17, 2027.

b. Liability and Property Insurance. The Debtors maintain general commercial

liability and property insurance policies that provide coverage relating to, among

other things, personal injury liability, property damage, advertising injury,

environmental liability, voluntary compensation liability, cybersecurity issues,

workers’ compensation liability, and travel and automobile-related liability

(collectively, the “Liability Insurance Policies”). The Liability Insurance Policies

also include umbrella insurance coverage and excess liability policies. These

policies run through October 19, 2020.

c. Workers’ Compensation Insurance. The Debtors maintain workers’ compensation

coverage for Debtors’ employees, which is largely administered on an enterprise

basis. These policies run through October 19, 2020.

10. The Debtors employ Schechner Lifson Corporation (the “Broker”) to assist them

with the procurement and management of the Insurance Policies. Amounts due to the Broker are

paid to it through the premiums the Debtors pay to Insurance Carriers (the “Broker’s Fees”). The

employment of the Broker allows the Debtors to obtain and manage the Insurance Policies in a

reasonable and prudent manner and to realize considerable savings in the procurement of such

policies. Accordingly, the Debtors believe that it is in the best interest of the creditors and Debtors’

estates to continue their business relationships with the Broker. After review of their books and

records, the Debtors believe that as of the Petition Date, they do not owe any amounts to the Broker

on account of fees, commissions, or any other prepetition obligations. Nonetheless, in an

abundance of caution, in addition to authorizing the continuation of the Insurance Policies in the

ordinary course of business, the Debtors also seek authority to honor any amounts owed to the

Brokers to ensure uninterrupted coverage under their Insurance Policies.

request relief applicable to all Insurance Policies, regardless of whether such Insurance Policy is specifically identified

on Exhibit A.


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11. The Debtors’ aggregate annual insurance premiums under all of the Insurance

Policies total approximately $1.1 million, not including additional expenses and/or fees. As of the

Petition Date, the Debtors do not owe any amounts on account of prepetition insurance premiums.

12. Finally, pursuant to the Insurance Policies, the Debtors are required to pay various

deductibles and/or self-insured retention amounts (collectively, the “Insurance Deductibles”)

depending upon the type of claim and insurance policy involved. As of the Petition Date, the

Debtors do not believe that any prepetition obligations relating to Insurance Deductibles exist.

RELIEF REQUESTED

13. By this Motion, the Debtors request entry of the Proposed Order, substantially in

the form attached hereto, pursuant to sections 105(a), 362(d), 363(b)(1), 363(c)(1), and 364(c) of

the Bankruptcy Code, (a) authorizing, but not directing, the Debtors to (i) continue prepetition

insurance coverage and enter into new policies, (ii) maintain insurance brokerage agreements and

enter into new post-petition insurance brokerage agreements, and (iii) pay all insurance obligations

in the Debtors’ sole discretion, all amounts and obligations on account of prepetition insurance

premiums, Insurance Deductibles, Broker’s Fees, deductibles, taxes, charges, and other obligations

owed under or with respect to the Insurance Policies; and (b) authorizing and directing financial

institutions to receive, process, honor, and pay checks presented for payment and electronic

payment requests related thereto; and (c) granting related relief.

BASIS FOR RELIEF REQUESTED

A. Continuing the Insurance Policies and Paying All Insurance Obligations Is Necessary

to Preserve the Value of the Debtors’ Estates

14. The nature of the Debtors’ businesses makes it essential for the Debtors to maintain

their Insurance Policies on an ongoing and uninterrupted basis. The non-payment of any premiums,

deductibles, or related fees under the Insurance Policies could result in one or more of the


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Insurance Carriers (a) terminating the existing policies, (b) declining to renew the Insurance

Policies, or (c) refusing to enter into new insurance agreements with the Debtors in the future. If

any of the Insurance Policies lapse without renewal, the Debtors could be in violation of state

and/or federal law and be exposed to substantial liability for personal and/or property damages, to

the detriment of all parties in interest.

15. Therefore, the Insurance Policies are critical to the preservation of the Debtors’

property and business’s value which is necessary to support a sale.

16. Although the Debtors believe they are current on their prepetition obligations under

their Insurance Policies, it is possible that some prepetition obligations may still be outstanding.

In the event a prepetition obligation (a “Proposed Insurance Payment”) is owed to an Insurer or in

accordance with any of the Debtors’ Insurance Policies, Debtors will file a notice in the docket of

these cases (a “Proposed Insurance Payment Notice”) indicating, (a) the party to whom any

Proposed Insurance Payment is to be made, (b) the address for such party, (c) the amount of the

Proposed Insurance Payment and (d) the basis for the Proposed Insurance Payment. The Debtors

shall also serve any Proposed Payment Notice on the parties receiving notice of this Motion (the

“Notice Parties”).

17. The Debtors hereby request that the Court require any objection to the payment in

the Proposed Insurance Payment Notice be filed on the docket of these cases and served on the

Notice Parties and the party to whom payment is to be made no later than five (5) days after service

of the Proposed Insurance Payment Notice. The Debtors hereby request authority to make the

Proposed Insurance Payment if no objections are received, pursuant to the procedure outlined

above. In the event any objections to a Proposed Insurance Payment Notice is received, they will

request a hearing with respect to the dispute on no less than ten (10) days’ notice.


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18. Furthermore, Debtors recognize that additional insurance premiums will become

due and owing post-petition. Any interruption in insurance coverage could expose the Debtors to

serious risks, such as (a) incurring direct liability for claims, material costs, and other losses that

would have been payable by the Insurance Carriers under the Insurance Policies, and (b) higher

costs to re-establish lapsed policies or obtain new insurance coverage. In light of the Debtors’

anticipated consummation of a sale of Debtors’ operations (as described in greater detail in the

363 Motion), these concerns are even more acute.

B. The Continuation of the Insurance Programs and the Payment of the Insurance

Obligations Is Justified and Should Be Authorized

19. The Court may grant the relief requested herein, including the proposed

maintenance, continuance, and renewal of the Insurance Programs under sections 105(a), 363(b)

and 363(c) of the Bankruptcy Code.

20. Section 363(c) of the Bankruptcy Code authorizes a debtor-in-possession operating

its business pursuant to section 1108 of the Bankruptcy Code to use property of the estate in the

ordinary course of business without notice or hearing. The Debtors respectfully submit that

maintaining and renewing the Insurance Policies and obtaining replacement or additional

coverage, as needed, would be in the ordinary course of business pursuant to sections 363(c),

1107(a), and 1108 of the Bankruptcy Code, and would be allowed without further application to

the Court. Nonetheless, out of an abundance of caution, the Debtors are seeking the Court’s

authorization to continue to maintain and perform their obligations under the Insurance Policies in

the ordinary course of business, and obtain additional coverage, as needed.

21. In addition, to the extent applicable, section 363(b) of the Bankruptcy Code permits

a court to authorize Debtors to pay certain prepetition claims. Section 363(b)(1) provides that

“[t]he trustee, after notice and a hearing, may use, sell, or lease, other than in the ordinary course


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of business, property of the estate . . . .” 11 U.S.C. § 363(b)(1); see Official Comm. of Unsecured

Creditors v. LTV Corp. (In re Chateaugay Corp.), 973 F.2d 141, 143 (2d Cir. 1992); In re Filene’s

Basement, LLC, No. 11-13511 (KJC), 2014 WL 1713416, at *12 (Bankr. D. Del. Apr. 29, 2014).

To permit payment of prepetition claims, a court must conclude that the debtor has “articulate[d]

some business justification, other than the mere appeasement of major creditors . . . .” In re

Ionosphere Clubs, Inc., 98 B.R. 174, 175 (Bankr. S.D.N.Y. 1989).

22. Courts in this jurisdiction have approved relief similar to the relief requested in this

Motion, generally acknowledging that it is appropriate to authorize the payment of prepetition

obligations where necessary to protect and preserve the estate, including an operating business’s

going-concern value. See In re Ionosphere Clubs, Inc., 98 B.R. at 175 (granting authority to pay

prepetition wages); Armstrong World Indus., Inc. v. James A. Phillips, Inc. (In re James A. Phillips,

Inc.), 29 B.R. 391, 398 (S.D.N.Y. 1983) (granting authority to pay prepetition claims of suppliers);

see also In re CoServ, L.L.C., 273 B.R. 487, 497 (Bankr. N.D. Tex. 2002). In doing so, these courts

acknowledge that several legal theories rooted in sections 105(a) and 363(b) of the Bankruptcy

Code support the payment of prepetition claims as provided herein.

23. Pursuant to section 363(b) of the Bankruptcy Code, courts may authorize payment

of prepetition obligations where a sound business purpose exists for doing so. See In re Ionosphere

Clubs, 98 B.R. at 175 (noting that section 363(b) provides “broad flexibility” to authorize a debtor

to honor prepetition claims where supported by an appropriate business justification); see also

James A. Phillips, Inc., 29 B.R. at 397 (relying upon section 363 as a basis to allow a contractor to

pay the prepetition claims of suppliers who were potential lien claimants). Indeed, courts have

recognized that there are instances when a debtor’s fiduciary duty can “only be fulfilled by the

pre-plan satisfaction of a prepetition claim.” In re CoServ, 273 B.R. at 497.


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24. Implicit in the fiduciary duties of any debtor-in-possession is the obligation to

“protect and preserve the estate, including an operating business’s going concern value.” In re

CoServ, 273 B.R. at 497. Some courts note that there are instances in which a debtor can fulfill

this fiduciary duty “only . . . by the preplan satisfaction of a prepetition claim.” Id. The court in

CoServ specifically noted the pre plan satisfaction of prepetition claims would be a valid exercise

of the debtor’s fiduciary duty when the payment “is the only means to effect a substantial

enhancement of the estate . . . .” Id. Consistent with a debtor’s fiduciary duties, courts have also

authorized payment of prepetition obligations under section 363(b) of the Bankruptcy Code where

a sound business purpose exists for doing so. See, e.g., In re Ionosphere Clubs, 98 B.R. at 175.

25. Moreover, Section 1112(b)(4)(C) of the Bankruptcy Code provides that “failure to

maintain appropriate insurance that poses a risk to the estate or to the public” is “cause” for

mandatory conversion or dismissal of a chapter 11 case. 11 U.S.C. § 1112(b)(4)(C). Similarly,

certain of the Insurance Policies are required by various state and federal regulations. In addition,

the Operating Guidelines and Reporting Requirements for Debtors in Possession and Trustees (the

“U.S. Trustee Guidelines”)5 require that a debtor “shall maintain” certain types of insurance

coverage following the Commencement Date, including the kind Debtors seek to maintain here.

See U.S. Trustee Guidelines, § 6.

26. Therefore, the Debtors believe that it is essential to their estates, and consistent with

the Bankruptcy Code and the U.S. Trustee’s Operating Guidelines, to maintain and continue to

make all payments required under their Insurance Policies and have the authority to supplement,

5 The U.S. Trustee’s guidelines for Region 2 can be found at https://www.justice.gov/ust-regions-

r02/file/region_2_operating_guidelines.pdf/download.


https://www.justice.gov/ust-regions-r02/file/region_2_operating_guidelines.pdf/download

https://www.justice.gov/ust-regions-r02/file/region_2_operating_guidelines.pdf/download

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amend, extend, renew, or replace their Insurance Policies as needed, in their judgment, without

further order of the Court.

27. Courts in this district have routinely granted relief similar to that requested herein.

See, e.g., In re 21st Century Oncology Holdings, Inc., Case No. 17-22770 (RDD) (Bankr. S.D.N.Y.

June 20, 2017) (granting relief to continue insurance policies); In re BCBG Max Azria Global

Holdings, LLC, Case No. 17-10466 (SCC) (Bankr. S.D.N.Y. Mar. 29, 2017) (same); In re Avaya

Inc., Case No. 17-10089 (SMB) (Bankr. S.D.N.Y. Feb. 10, 2017) (same); In re Int’l Shipholding

Corp., Case No. 16-12220 (SMB) (Bankr. S.D.N.Y. Aug. 23, 2016) (authorizing debtors to pay

prepetition premiums and enter into new insurance policies pursuant to sections 105(a) and 363(b)

of the Bankruptcy Code); In re Aeropostale, Inc., Case No. 16-11275 (SHL) (Bankr. S.D.N.Y.

June 3, 2016) (same).

28. To ensure that Debtors comply with section 1112(b)(4)(C) of the Bankruptcy Code,

applicable state and federal regulations, and the U.S. Trustee Guidelines, Debtors respectfully

request the authority to: (i) continue prepetition insurance coverage and enter into new policies,

(ii) maintain prepetition premium financing agreements and enter into new post-petition premium

financing agreements, (iii) maintain insurance brokerage agreements and enter into new post-

petition insurance brokerage agreements, and (iv) pay all insurance obligations in the Debtors’ sole

discretion, on account of the Debtors’ insurance coverages provided through various group

insurance policies. Debtors further request the Court authorize and direct financial institutions to

receive, process, honor, and pay checks presented for payment and electronic payment requests

related thereto, and to grant related relief.

C. Processing of Checks and Electronic Fund Transfers Should Be Authorized

29. Debtors have sufficient funds to pay any amounts described in this Motion in the

ordinary course of business by anticipated access to cash collateral plus the proceeds from the


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anticipated sale of assets described in greater detail in Debtors’ 363 Motion, which is being filed

simultaneously herewith. In addition, under Debtors’ existing cash management system, which is

described in further detail in a separate motion being filed simultaneously herewith, Debtors can

readily identify checks or wire transfer requests as relating to an authorized payment with respect

to the Insurance Policies. Accordingly, Debtors believe there is minimal risk that checks or wire

transfer requests that the Bankruptcy Court has not authorized will be inadvertently made.

Therefore, Debtors respectfully request that the Bankruptcy Court authorize and direct all

applicable financial institutions, when requested by Debtors, to receive, process, honor, and pay

any and all checks or wire transfer requests in respect of the relief requested in this Motion.

WAIVER OF BANKRUPTCY RULES 6004(a) AND 6004(h)

30. To successfully implement the foregoing, Debtors request that the Bankruptcy

Court enter an order providing that notice of the relief requested herein satisfies Bankruptcy Rule

6004(a) and that Debtors have established cause to exclude such relief from the 14-day stay period

under Bankruptcy Rule 6004(h).

RESERVATION OF RIGHTS

Nothing contained herein is 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 on any

grounds; (c) a promise to pay any claim; (d) an assumption or rejection of any executory contract

or unexpired lease pursuant to Bankruptcy Code section 365; or (e) otherwise affect the Debtors’

rights under Bankruptcy Code section 365 to assume or reject any executory contract with any

party subject to this Motion.

NOTICE


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31. No trustee, examiner or statutory creditors’ committee has been appointed in this

chapter 11 case. Notice of this Motion will be provided by overnight delivery to: (i) Office of the

United States Trustee for the Southern District of New York; (ii) the Internal Revenue Service;

(iii) New York State Department of Finance; (iv) Willkie Farr and Gallagher, 787 Seventh Avenue

New York, New York 10019 Attn: Paul V. Shalhoub, Esq.; counsel to the holder of Cosmoledo’s

equity interests; (v) Katten Muchin Rosenman LLP, 575 Madison Avenue New York, New York

10022, Attn: Steven J. Reisman, Esq. counsel to the Debtors’ senior secured lender; (vi) the

Debtors’ top twenty (20) unsecured creditors; and (vii) all other parties who have requested notice

under Bankruptcy Rule 2002. The Debtors submit that such notice is sufficient under the

circumstances.

NO PRIOR RELIEF REQUESTED

32. No previous request for the relief sought herein has been made to this or any other

Court.

CONCLUSION

WHEREFORE, the Debtors respectfully request entry of the Proposed Order annexed

hereto granting the relief requested herein and such other and further relief as the Court may deem

just and proper.

Dated: September 10, 2020

New York, New York

MINTZ & GOLD LLP

by: /s/ Andrew R. Gottesman

Andrew R. Gottesman

Maria E. Garcia

Gabriel Altman

600 Third Avenue, 25th Floor

New York, New York 10016

Telephone (212) 696-4848

Facsimile (212) 696-1231


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[email protected]

[email protected]

[email protected]

Proposed Attorneys for the Debtors


mailto:[email protected]



UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF NEW YORK

In re:

COSMOLEDO, LLC, et al.1

Debtors.

Chapter 11

Case No. 20-12117 ( )

(Joint Administration Pending)

ORDER (I) AUTHORIZING THE DEBTORS TO (A) MAINTAIN INSURANCE

POLICIES, (B) MAINTAIN PREPETITION INSURANCE BROKERAGE

AGREEMENTS AND ENTER INTO NEW POST-PETITION INSURANCE

BROKERAGE AGREEMENTS, AND (C) PAY PREPETITION INSURANCE

OBLIGATIONS, INCLUDING OBLIGATIONS OWED FOR DEBTORS’ INSURANCE

POLICIES; AND (II) GRANTING RELATED RELIEF

Upon the motion (the “Motion”)2 of Cosmoledo, LLC (“Cosmoledo”), and its affiliated

debtors and debtors in possession in the above-captioned cases (collectively the “Debtors”) for

entry of an order (the “Order”) under sections 105, 345, and 363 of title 11 of the United States

Code (the “Bankruptcy Code”), and Rules 6003 and 6004 of the Federal Rules of Bankruptcy

Procedure (the “Bankruptcy Rules”) (a) authorizing the Debtors to (i) continue prepetition

insurance coverage and enter into new policies, (ii) maintain prepetition premium financing

agreements and enter into new post-petition premium financing agreements, (iii) maintain

insurance brokerage agreements and enter into new post-petition insurance brokerage agreements,

and (iv) pay all insurance obligations in the Debtors’ sole discretion, on account of the Debtors’

1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax

identification number, include: Cosmoledo, LLC (6787); Breadroll, LLC, (3279); 688 Bronx Commissary, LLC

(6515); 95 Broad Commissary, LLC (2335); 178 Bruckner Commissary, LLC (2581); 8 West Bakery, LLC (6421);

NYC 1294 Third Ave Bakery, LLC (2001); 921 Broadway Bakery, LLC (2352); 1800 Broadway Bakery, LLC (8939);

1535 Third Avenue Bakery, LLC (1011); 2161 Broadway Bakery, LLC (2767); 210 Joralemon Bakery, LLC (4779);

1377 Sixth Avenue Bakery, LLC (9717); 400 Fifth Avenue Bakery, LLC (6378); 1400 Broadway Bakery, LLC

(8529); 575 Lexington Avenue Bakery, LLC (9884); 685 Third Avenue Bakery, LLC (9613); 370 Lexington Avenue

Bakery, LLC (0672); 787 Seventh Avenue Bakery, LLC (6846); 339 Seventh Avenue Bakery, LLC (1406); and 55

Hudson Yards Bakery, LLC (7583).

2 Capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in the Motion

or the 1007 Declaration.


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insurance coverages provided through various group insurance policies; and (b) authorizing and

directing financial institutions to receive, process, honor, and pay checks presented for payment

and electronic payment requests related thereto; and (c) granting related relief; and the Court

having jurisdiction to consider the Motion and the relief requested therein pursuant to 28 U.S.C.

§§ 157 and 1334; and venue being proper before this Court pursuant to 28 U.S.C. §§ 1408 and

1409; and notice of the Motion having been given as set forth in the Motion; and it appearing that

no other notice need be provided; and upon the record of the interim hearing held ________, 2020;

and the relief requested in the Motion being in the best interests of the Debtors and their estates

and creditors; and no objections having been interposed to the relief sought in the Motion or any

such objections having been heard and overruled; after due deliberation and sufficient cause

appearing therefore;

IT IS HEREBY ORDERED THAT:

1. The Motion is GRANTED solely to the extent set forth herein.

2. The Debtors are authorized to maintain, continue, and renew their Insurance

Policies.

3. The Debtors are authorized, but not directed, to pay all insurance obligations in the

Debtors’ sole discretion, all amounts and obligations on account of insurance premiums arising

after the Petition Date, Insurance Deductibles, Broker’s Fees, deductibles, taxes, charges, and

other obligations owed under or with respect to the Insurance Policies owed in connection with

the Insurance Policies, whether incurred prepetition or post-petition.

4. In the event the Debtors seek to pay a prepetition obligation (a “Proposed Insurance

Payment”) to an Insurer, or otherwise in accordance with any of the Debtors’ Insurance Policies,

the Debtors are hereby are required to file a notice in the docket of these cases (a “Proposed


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Insurance Payment Notice”) indicating, (a) the party to whom any Proposed Insurance Payment is

to be made, (b) the address for such party, (c) the amount of the Proposed Insurance Payment and

(d) the basis for the Proposed Insurance Payment. The Debtors shall serve any Proposed Payment

Notice on (i) the Office of the United States Trustee for the Southern District of New York; (ii)

the Internal Revenue Service; (iii) New York State Department of Finance; (iv) Willkie Farr and

Gallagher, 787 Seventh Avenue New York, New York 10019 Attn: Paul V. Shalhoub, Esq.;

counsel to the holder of Cosmoledo’s equity interests; (v) Katten Muchin Rosenman LLP, 575

Madison Avenue New York, New York 10022, Attn: Steven J. Reisman, Esq. counsel to the

Debtors’ senior secured lender; (vi) the Debtors’ top twenty (20) unsecured creditors; and (vii) all

other parties who have requested notice under Bankruptcy Rule 2002 (collectively, the “Notice

Parties”).

5. Any objection to a Proposed Insurance Payment Notice must be to be filed on the

docket of these cases, and served on proposed counsel to Debtors, Mintz & Gold LLP, 600 Third

Avenue, 25th floor, New York, New York 10016, Attn: Andrew R. Gottesman, Esq., the Notice

Parties and the party to whom payment is to be made so as to be received no later than five (5)

days following service of the Proposed Insurance Payment Notice.

6. In the event any objection to a Proposed Insurance Payment Notice is received, the

Debtors may request a hearing with respect to the dispute on no less than ten (10) days’ notice.

7. The Debtors are hereby authorized to make any Proposed Insurance Payment

subject to a Proposed Insurance Payment Notice, if no objections are received, pursuant to the

procedure outlined above.

8. The requirements set forth in Bankruptcy Rule 6003(b) are satisfied.

9. The requirements set forth in Bankruptcy Rule 6004(a) are hereby waived.


4

10. The Debtors are hereby authorized to take such actions and to execute such

documents as may be necessary to implement the relief granted by this Order.

11. Notwithstanding Bankruptcy Rule 6004(h), this order shall be effective and

enforceable immediately upon entry hereof.

12. This Order, and all acts taken in furtherance of or reliance upon this Order, shall be

effective notwithstanding the filing of an Objection, pending the entry of the Final Order by this

Court.

13. The Debtors are authorized and empowered to take all actions necessary to

implement the relief granted in this Order.

14. A final hearing to consider final approval of the relief requested in the Motion (the

“Final Hearing”) shall be held on _________________, 2020 at ___:___ __.m. (Eastern Time).

Any objections or responses to entry of a final order on the Motion must be filed with the Court

on or before 4:00 p.m. (Eastern Time) on _________________, 2020.

15. This Court shall retain jurisdiction with respect to all matters arising from or related

to the implementation or interpretation of this Order.

Dated: _____________, 2020

New York, New York

________________________________

Hon. _________________

United States Bankruptcy Judge


Exhibit A

Insurance Policies

Insured Insurance Carrier Policy Number Coverage Policy Term Premium

Cosmoledo LLC The Hanover Insurance

Company

LHY-D393959-03

D&O and Entity

Liability

Coverage, and

Crime Coverage

10/19/2019 to

01/17/2021

$20,131.00

Cosmoledo LLC The Hanover Insurance

Company

LHYD393959

Six-year

extended

reporting

coverage

01/17/2021 to

01/17/2027

$25,386.00

Cosmoledo LLC (d/b/a

“Maison Kayser”)

Travelers Casualty and

Surety Company of

America

107169083

D&O Excess

Policy

10/19/2019 to

10/19/2020

$7,703.00

Cosmoledo LLC Chubb D94405725

Cyber Enterprise

Risk

10/19/2019 to

10/19/2020

$6,934.00

Cosmoledo LLC Ironshore Indemnity,

Inc.

004233100

Employment

Practices

10/19/2019 to

10/19/2020

$67,996.00

Cosmoledo LLC Massachusetts Bay

Insurance Company

ZDY-D731522-01

Commercial

Property &

General Liability

Coverage

10/19/2019 to

10/19/2020

$225,265.63

Cosmoledo LLC1 The Hanover Insurance

Company

UHY-D731517-02

Umbrella Policy 10/19/2019 to

10/19/2020

$19,915.00

Cosmoledo LLC Hartford Insurance

Company

13WBBA7IWY

Workers’

Compensation &

Employer’s

Liability

10/19/2019 to

10/19/2020

$727,965.00

1 This policy’s coverage extends to all of the Debtor entities, not just Cosmoledo LLC.

20-12117-mew Doc 12-1 Filed 09/11/20 Entered 09/11/20 00:18:33 Exhibit A Pg 1 of 1

20-12117-mew doc 12 filed 09/11/20 entered 09/11/20 00:18 ... · new postpetition insurance...

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