Razzoo's - Chapter 11 Plan Terms

Plan Terms

Overview

• On October 1, 2025 (the "Petition Date"), Razzoo's, Inc. and Razzoo's Holdings, Inc. (collectively, the "Debtors") filed voluntary petitions for relief under chapter 11 in the United States Bankruptcy Court for the Southern District of Texas, Houston Division. The Debtors have operated their businesses as debtors in possession since the Petition Date.
• On October 14, 2025, the United States Trustee appointed an Official Committee of Unsecured Creditors (the "Committee"), consisting of My Tech Texas, LLC, South Loop Development, LLC, and Sabine 2016-1, LLC. The Committee has been an active participant in the Chapter 11 Cases, working closely with the Debtors' Professionals to maximize value for the Estates.
• During the Chapter 11 Cases, the Debtors sold substantially all of their Assets. The sale did not generate sufficient proceeds to pay all expected Claims against the Estates.
• The Plan, confirmed on April 22, 2026, establishes the Cajun Café Liquidating Trust (the "Liquidating Trust") for purposes of liquidating any remaining Assets and distributing available Cash to pay Administrative Expense Claims, Secured Claims, Priority Tax Claims, Priority Non-Tax Claims, and to make distributions to Holders of General Unsecured Claims.
  • The Debtors estimate that Plan Distributions from the collection and liquidation of all Liquidating Trust Assets could be in the range of seven to eight percent (7-8%) of total General Unsecured Claims.
• Debtor Razzoo's, Inc. is the wholly-owned subsidiary of Razzoo's Holdings, Inc.

Events Leading to the Chapter 11 Cases

• The first Razzoo's opened in 1991 in Dallas, Texas, and at its peak operated twenty-four locations across Texas, North Carolina, and Oklahoma. In 2024, the Debtors reported total sales of $76.6 million, Store-Level EBITDA of $9.6 million, and Adjusted EBITDA of approximately $3.3 million.
• The Debtors experienced a decline in sales driven by:
  • Shifts in consumer spending habits, preferences for convenience, affordability, delivery, and innovation, in part attributed to the impact of COVID-19 on consumer behavior, general market conditions, geopolitical and economic uncertainty.
  • Heavy media presence and discounting from competitors in the casual dining space, including Chili's and Applebee's, which utilized aggressive marketing and value-oriented promotions that negatively influenced Razzoo's guest traffic.
  • Macro-economic factors such as inflation and higher interest rates, which led consumers to "trade down" to fast-casual or quick-service restaurants.
• Razzoo's did not own any real estate. The Debtors' total monthly lease obligations were approximately $650,000, which became increasingly burdensome as sales declined. In September 2025, the Debtors closed three underperforming locations in Pasadena (TX), Corpus Christi (TX), and Oklahoma City (OK), reducing recurring monthly rent obligations by approximately $110,000.
• The terms of the Prepetition Loan Agreement with First Horizon Bank proved too costly. Absent the filing of the Chapter 11 Cases, the Debtors' next principal and interest payment to First Horizon Bank of approximately $500,000 would have been swept from the Debtors' accounts on October 1, 2025. The Debtors could not afford to make this payment and continue servicing their Prepetition FHB Loan Debt.

Prepetition Debt

• The Debtors' most significant prepetition liabilities consisted of secured debt obligations under the Prepetition FHB Loan Documents with First Horizon Bank, secured by Liens on substantially all of the Debtors' Assets.
  • As of the Petition Date, the outstanding balance of the Prepetition FHB Loan Debt was approximately $9,650,674.
  • As of September 2024, the outstanding principal balance was $11,926,678, which was reduced to approximately $9.7 million in part as a result of accelerated amortization and $850,000 in shareholder contributions to pay down the debt.
• The Debtors estimate that they owed at least $3.1 million in unsecured trade debt as of the Petition Date.

DIP Financing

• Despite the Debtors' efforts to negotiate DIP financing with First Horizon Bank prior to the filing, FHB declined to provide debtor-in-possession financing and attempted to steer the Debtors into an out-of-court agreement.
• On October 1, 2025, the Debtors entered into a Comprehensive DIP Term Sheet with TJF Financial, LLC, which agreed to provide up to $4 million of new money financing. The DIP Facility was to consist of $1.8 million in interim financing and an additional $2.2 million upon entry of a Final DIP Order.
• First Horizon Bank objected to the proposed financing and subsequently offered to extend financing to the Debtors as a means of protecting the first priority of its Liens. On October 7, 2025, the Debtors notified the Court that they and First Horizon Bank had reached an agreement on debtor-in-possession financing.
• Prior to the final DIP hearing, First Horizon Bank entered into a Loan Sale Agreement dated October 21, 2025, pursuant to which FHB sold and assigned all of its obligations, rights, and interests in the Prepetition Loan Debt and DIP Obligations to ThirtyThree97 LLC, which became the DIP Lender in the Chapter 11 Cases.
• On November 7, 2025, the Court entered the Final DIP Order approving the DIP Facility and the roll-up of the Prepetition FHB Loan Debt on a final basis. Key terms include:
  • DIP New Money Loans: $4,000,000 in multi-draw term loans.
  • DIP Roll-Up Loan: conversion of the Prepetition FHB Loan Debt, including accrued and unpaid interest, default interest, prepayment premiums, and other fees.
  • Total DIP Loan Claims: aggregate principal amount of up to $14,040,412.98.
• TJF Financial, LLC received an Allowed Administrative Claim in the amount of $40,000 in full and final satisfaction of its asserted Administrative Claim.

Sale Transaction

• In accordance with milestones set forth in the DIP Orders, the Debtors marketed and sold substantially all of their Assets pursuant to section 363 of the Bankruptcy Code.
• On December 2, 2025, the Debtors selected ThirtyThree97 LLC (the "Buyer") as the Stalking Horse Purchaser for certain Purchased Assets pursuant to a credit bid of the full amount of the DIP Loan Claims under section 363(k) of the Bankruptcy Code, plus the assumption of certain Assumed Liabilities, with total consideration to the Estates of approximately $18.8 million.
  • No other qualified bids were received. The Debtors, in consultation with the Committee, selected the DIP Lender as the Buyer and did not proceed with an auction.
• On December 29, 2025, the Sale closed, and all outstanding DIP Loan Claims were fully satisfied. The Professional Fee Escrow remains subject to the DIP Liens to the extent necessary to preserve the Carve Out for its intended beneficiaries.
  • Upon payment in full of all Professional Compensation Claims subject to the Carve Out, the remaining DIP Liens shall be released and any excess funds in the Professional Fee Escrow shall be returned to the Liquidating Trust, free and clear of all Liens.
• Following the Closing, the Debtors agreed to provide certain transition services to the Buyer pursuant to a Transition Services Agreement dated December 29, 2025, with a Service Term expected to conclude on March 31, 2026.

Classification and Treatment of Claims

• Class 1 (Priority Non-Tax Claims): Unimpaired. Each Holder of an Allowed Priority Non-Tax Claim shall receive payment in full in Cash or such other treatment consistent with section 1129(a)(9) of the Bankruptcy Code.
• Class 2 (Other Secured Claims): Unimpaired. Includes Secured Tax Claims and miscellaneous Secured Claims. Not entitled to vote.
• Class 3 (General Unsecured Claims): Impaired. Holders shall receive an interest in the Liquidating Trust to be paid in Cash on a Pro Rata basis from Plan Distributions until paid in full. Class 3 voted to accept the Plan, without including acceptance by any Insider.
• Class 4 (Subordinated Claims): Impaired. Holders shall receive an interest in the Liquidating Trust to be paid in Cash from Plan Distributions, subject to the priorities established by the Plan, until paid in full.
• Class 5 (Equity Interests): On the Effective Date, all Equity Interests shall be cancelled. Holders of Allowed Equity Interests shall receive an interest in the Liquidating Trust; however, the Debtors do not anticipate Holders of Allowed Equity Interests in Razzoo's Holdings, Inc. will receive any Plan Distributions.

Liquidating Trust

• The Plan provides for the creation of the Cajun Café Liquidating Trust. Douglas J. Brickley shall serve as the Liquidating Trustee and sole director and officer of the Liquidating Debtors on and after the Effective Date.
• On the Effective Date, the Debtors shall irrevocably transfer and assign all Liquidating Trust Assets to the Liquidating Trust, free and clear of all Claims and Interests.
  • Liquidating Trust Assets include all Estate Property and Assets constituting Excluded Assets under the APA, including Avoidance Actions, Retained Causes of Action and their proceeds, and all other remaining Assets, including the Debtors' Cash on hand as of the Effective Date. The term expressly excludes Cash segregated for payment to Professionals and other parties pursuant to Final Orders until such Claims are paid in full.
• The Liquidating Trust shall make Plan Distributions in the following order of priority:
  • (i) Allowed Priority Non-Tax Claims; then (ii) Allowed Other Secured Claims on the Debtors' Cash; then (iii) Allowed General Unsecured Claims on a Pro Rata basis; then (iv) Allowed Subordinated Claims on a Pro Rata basis; and finally (v) Allowed Equity Interests.
  • All expenses of the Liquidating Trust directly related to administration of the Liquidating Trust Assets shall be satisfied prior to any subsequent Plan Distributions.
• The Liquidating Trustee shall be compensated on an hourly basis at the Trustee's standard hourly rate and may retain and compensate counsel and other professionals without Bankruptcy Court approval.
• The Liquidating Trust shall dissolve no later than five years after the Effective Date, subject to potential extensions by the Court (not to exceed four extensions, unless the Trustee receives a favorable IRS ruling).

Administrative Claims and Priority Tax Claims

• Each Holder of an Allowed Administrative Claim shall receive Cash equal to the amount of such Claim on the Effective Date (or as soon as reasonably practicable thereafter), or within ten Business Days after the date on which an order allowing such Claim becomes a Final Order. Requests for payment of Administrative Claims must be filed no later than the Administrative Claim Bar Date, which is the first Business Day that is thirty days after the Effective Date.
• Each Holder of an Allowed Priority Tax Claim shall receive Cash equal to the unpaid amount of such Claim on the later of the Effective Date, the date such Claim becomes Allowed, or the date such Claim first becomes due and payable.
• All requests for Professional Compensation Claims must be filed within sixty calendar days after the Effective Date. Objections to Professional Compensation Claims must be filed within twenty-one calendar days after the earlier of the filing of the Professional Compensation Claim or the Professional Compensation Claim Bar Date. Allowed Professional Compensation Claims shall be paid in Cash within ten Business Days of entry of a Final Order.

Executory Contracts and Unexpired Leases

• On the Effective Date, all Executory Contracts or Unexpired Leases shall be deemed rejected unless previously assumed or rejected pursuant to the Sale Order and APA or other Final Order. Executory Contracts and Unexpired Leases maintained for the benefit of the Buyer under the Transition Services Agreement shall be deemed rejected as of the earlier of the End Date of the Service Term or March 31, 2026.
• All of the Debtors' insurance policies, to the extent not previously assumed and assigned to the Buyer pursuant to the Sale Order and APA, are expressly rejected as of the Effective Date.
• Any Claims arising from the rejection of an Executory Contract or Unexpired Lease that are not timely filed will be automatically disallowed and forever barred. All Allowed rejection Claims shall be classified as General Unsecured Claims in Class 3.

Retained Causes of Action

• The Retained Causes of Action are expressly preserved and constitute Liquidating Trust Assets transferred to the Liquidating Trust. The Liquidating Trustee shall be entitled to assert all such Retained Causes of Action as fully as if the Chapter 11 Cases had not been commenced. Failure to expressly identify a Cause of Action as a Retained Cause of Action shall not constitute a waiver or release.
• Retained Causes of Action include:
  • All Causes of Action defined as Excluded Claims and designated as Excluded Assets pursuant to the Sale Order and APA.
  • All Causes of Action in which property is recoverable under sections 542, 543, 550, or 553 of the Bankruptcy Code, and/or a transfer is avoidable under sections 544, 545, 547, 548, 549, or 724(a), including potential preference claims related to transfers made within ninety days before the Petition Date and Insider preference claims for transfers made between ninety days and one year before the filing.
  • All Causes of Action against or related to current or former Insiders (including directors and/or officers) and related Entities, including claims for mismanagement and/or breach of fiduciary duty and potential claims related to transfers made within the four-year period before the filing.

Exculpation

• The Exculpated Parties are the Debtors, the Committee, and the Committee's individual members, solely in their capacities as such during the Chapter 11 Cases.
• To the maximum extent permitted by applicable law, each Exculpated Party is released and exculpated from any claim, obligation, suit, judgment, damage, demand, debt, right, remedy, loss, liability, and cause of action arising out of the administration of the Chapter 11 Cases, the negotiation and pursuit of definitive documents, solicitation of votes, funding of the Plan, and related transactions, other than claims arising out of intentional fraud, willful misconduct, or gross negligence as determined by a Final Order.

Injunction

• On and after the Effective Date, all Persons and Entities who have held, hold, or may hold Claims against the Debtors are permanently enjoined from commencing or continuing any action against the Debtors or the Liquidating Trust, enforcing any judgment or decree, creating or enforcing any encumbrance, or asserting any right of setoff or recoupment (except defensively) with respect to such Claims.
• All injunctions or automatic stays in existence on the Confirmation Date shall remain in full force and effect until entry of a Final Decree in the Chapter 11 Cases.

Corporate Governance and Wind-Down

• The Debtors shall continue to exist after the Effective Date as the Liquidating Debtors for purposes of winding down their affairs. As of the Effective Date, all Current Directors and Officers are deemed to have resigned, and the Liquidating Trustee shall serve as the sole director and officer.
• On the Effective Date, the Committee shall dissolve automatically, though it shall continue to exist with respect to the preparation and prosecution of Professional Compensation Claims and any appeal of the Confirmation Order.
• All tangible personal Estate Property remaining in any Excluded Restaurants, the Debtors' corporate offices, or other prior restaurant locations shall be deemed abandoned as of the Closing Date of the Sale.

Release of Liens

• Except as otherwise provided in the Plan, on the Effective Date and concurrently with applicable Plan Distributions, all mortgages, deeds of trust, Liens, pledges, or other security interests against Estate Property shall be fully released and discharged, with rights reverting to the Liquidating Trust.
  • This provision does not apply to Liens held by any Governmental Unit for Allowed Secured Tax Claims, including ad valorem property taxes.
• All remaining Estate Property will vest in the Liquidating Trust free and clear of all Claims, Liens, Interests, charges, and other encumbrances.

Conditions Precedent to Effectiveness

• The following conditions must be satisfied or waived prior to the Effective Date:
  • The Confirmation Order shall have been entered and shall not have been reversed, vacated, stayed, or modified.
  • The Plan, including any amendments or supplements, shall be in form and substance acceptable to the Debtors.
  • The Liquidating Trust Agreement shall be fully executed.
• The Effective Date is the first Business Day after the Confirmation Date on which no stay of the Confirmation Order is in effect and all conditions to effectiveness have been satisfied or waived.
• If Consummation does not occur, the Plan shall be null and void in all respects and shall not constitute a waiver or release of Claims, prejudice any party's rights, or constitute any admission by the Debtors.

Retention of Professionals

• The Debtors retained the following Professionals during the Chapter 11 Cases:
  • Okin Adams Bartlett Curry LLP as general bankruptcy counsel.
  • Stout Capital, LLC as investment banker.
  • Stout Risius Ross, LLC as financial advisor.
  • Donlin, Recano & Company, LLC as Claims and Noticing Agent.
• The Committee retained Dykema Gossett PLLC as its general bankruptcy counsel.
• Upon the Effective Date, any requirement that Professionals comply with sections 327 through 331, 363, and 1103 of the Bankruptcy Code for retention or compensation shall terminate, and the Debtors and the Liquidating Trustee may employ and pay any Professional in the ordinary course without further Court approval.