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SEC Filings

8-K
COSI INC filed this Form 8-K on 02/13/2017
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24.           The Debtors believe that the resolution set forth in the Settlement Agreement is fair and reasonable under the standard applicable under Bankruptcy Rule 9019, which generally requires consideration of the following factors: (i) the probability success in the litigation being compromised; (ii) the difficulties, if any, to be encountered in the matter of collection; (iii) the complexity of the litigation involved, and the expense, inconvenience and delay attending it; and (iv) the paramount interest of the creditors and a proper deference to their reasonable views in the premise.  See In re Genesys Research Institute, Inc., 2016 WL 3583229, at *12 (Bankr. D. Mass. Jun. 24, 2016) (citing Jeffrey, 70 F.3d at 185).

25.           The Debtors assert that the approval of the Settlement Agreement will result in significant benefits to the Debtors’ estates.  First, the Settlement Agreement resolves the Cure Claim and related disputes regarding the Debtors’ proposed assumption of the FC MFA. The resolution of the Cure Claim affords the estates significant savings in legal fees and expenses, which the Debtors would have otherwise incurred in litigating the Cure Claim and related disputes with the Franchisee Parties.  The Settlement Agreement also prevents delay and uncertainty regarding the probability of success in litigation, and the Debtors assert that the Settlement Agreement appropriately factors in the strengths and weaknesses of all claims and defenses.

26.           In addition, the Settlement Agreement maintains the pre-bankruptcy franchise relationship between Cosi and Fast Casual, which, among other benefits, ensures Cosi’s ability to develop its brand and presence in Central America and to continue to generate royalties and franchise revenue under the FC MFA.  As a result, approval of the Settlement Agreement will trigger the release of the FC Franchise Reserve in the amount of $975,000.00 and the FC Costs in the amount of $100,000.00 (less any approved reduction regarding the FC Costs), which funds, together with the “Purchase Price” under the APA, will be utilized at plan confirmation, among other potential assets, to fund a distribution to creditors.6
 

6
The Debtors have conferred with LIMAB regarding the proposed Settlement Agreement and the Debtors believe that LIMAB finds the Settlement Agreement acceptable to satisfy the conditions necessary to warrant the release of the FC Franchise Reserve and the FC Costs (less any approved reduction regarding the FC Costs) no later than the effective date of the Chapter 11 plan.
 
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