S.M.F. Group - Chapter 11 Bidding Procedures Summary

Bidding Procedures Summary

Parties Involved

• Sellers: S.M.F. Group, Inc. and its 21 affiliated debtors, operators of a portfolio of restaurants in New York City's entertainment and cultural districts — near Carnegie Hall and Lincoln Center and in the Theater District — and in Washington, D.C. The jointly administered Chapter 11 Cases are pending in the U.S. Bankruptcy Court for the Southern District of New York as Case No. 26-11893 (SAB). No trustee or examiner has been requested, and no statutory committee had been appointed as of the filing of the Motion.
• The Debtors do not have a stalking horse bidder, and the sale of the Assets will be subject to competing bids; the Bid Procedures nonetheless permit the Debtors to provide reasonable accommodations to any stalking horse bidder that may later emerge.
• FHGRF LLC, the Debtors' prepetition senior secured lender and postpetition DIP Lender, is deemed a Qualified Bidder under all circumstances and holds credit bid rights.
• Hilco Corporate Finance, LLC serves as the Debtors' proposed investment banker and is leading the marketing process; all due diligence requests are directed to Richard Klein at Hilco.
• Proposed counsel to the Debtors: Raines Feldman Littrell LLP (Hamid R. Rafatjoo, Carollynn H.G. Callari, and David S. Forsh).
• The Motion is supported by the First Day Declaration of Jordan Meyers (ECF No. 18) and a declaration of Richard Klein of Hilco Corporate Finance, LLC in support of the proposed Bid Procedures.
• Consultation Parties consist of (a) the legal and financial advisors to any official committee appointed in the Chapter 11 Cases and (b) FHGRF, provided that FHGRF ceases to be a Consultation Party if and when it submits a Bid.
  • The Debtors will not provide copies of any Bids or other confidential information to any Consultation Party, or to any insider or affiliate of the Debtors, that is an active or prospective bidder for the relevant Assets at the applicable time.
  • If a committee member submits a Qualified Bid, the committee retains its consultation rights but must exclude the bidding member from related discussions and withhold confidential information from it.
  • Consultation rights do not limit the Debtors' discretion and do not include any right to veto a decision made in the Debtors' business judgment.

Case Background

• The Debtors attribute their financial difficulties largely to certain merchant cash advance lenders that withheld daily operating revenues, and commenced the Chapter 11 Cases to access DIP financing and run a marketing and sale process.
• Since the petition date of Aug. 9, 2026, the Debtors have obtained postpetition financing from FHGRF, approved on an interim basis by order entered Aug. 12, 2026, with a final hearing scheduled for Sept. 3, 2026. A key DIP milestone requires the Debtors to file a proposed plan of reorganization and disclosure statement no later than Sept. 30, 2026.
• Despite the DIP Facility, liquidity remains constrained and the Debtors state they lack a long runway to implement a sale process or formulate a plan. The Debtors' investment banker is sourcing additional funding, but no viable alternatives are currently in hand.
• The Debtors assert the going-concern sale would preserve over 800 jobs, keep restaurants operating in commercial real estate that might otherwise go empty, offer the best chance of creditor recovery, and help avoid administrative insolvency.
• Nothing in the Bid Procedures may modify or extend the Milestones under the DIP Documents.
• The Debtors characterize the proposed timeline — more than 40 days from the hearing on the Motion to the Sale Hearing — as affording sufficient diligence time for both going-concern and standalone-asset bidders while accommodating their liquidity constraints, and state they will actively market the Assets in the period before entry of the Bid Procedures Order.
• The statutory bases for the relief are sections 105(a), 363, 365, 503, and 507 of the Bankruptcy Code; Bankruptcy Rules 2002, 6004, 6006, 9007, and 9008; Local Rules 2002-1 and 6004-1; and the Court's Guidelines for the Conduct of Asset Sales.

Assets Being Sold

• All or any part of the Debtors' assets, in one or more lots and to one or more successful bidders.
• Interested parties may bid on all or any part of the Assets, and the Debtors will consider a sale by a single bid from a single bidder or by multiple bids from multiple bidders.
• Any bid for an individual Asset, even if the highest or otherwise best bid for that Asset, remains subject to higher or otherwise better bids on packages of Assets.
• The Debtors may consider Partial Bids for less than all of the Assets if, taken together and after accounting for the risks of consummating several individual transactions, they collectively constitute a higher and otherwise better bid than the highest and best bid for all or substantially all of the Assets.
• The Sale contemplates the assumption and assignment of certain executory contracts and unexpired leases to the Successful Bidder(s).
• The Motion does not itemize the Assets; parties interested in bidding on any of the Assets are directed to contact Hilco.

Due Diligence

• To receive due diligence and nonpublic information, a Prospective Bidder must deliver to the Debtors (for sharing with the Consultation Parties):
  • An executed confidentiality agreement satisfactory to the Debtors — unless an existing acceptable agreement governs — addressing nondisclosure of confidential information, prohibitions on contacting third parties in connection with a Sale Transaction, non-solicitation of employees, prohibitions on acquiring the Debtors' debt and equity securities, and survival of certain provisions; and
  • Sufficient information to allow the Debtors to determine that the party seeks Data Room access for a bona fide purpose and has the financial and managerial wherewithal to submit a Qualified Bid and consummate a Sale Transaction.
• The Debtors will provide Data Room access to each Prospective Bidder that satisfies the foregoing requirements, as determined by the Debtors in their discretion, and will endeavor to accommodate reasonable requests for additional information and diligence access. FHGRF will receive Data Room access and any information provided to a Prospective Bidder that has not already been furnished to it.
• The Debtors are not obligated to furnish information to any party that is not a Prospective Bidder or that does not comply with the participation requirements, or, in the case of competitively sensitive information, to a competitor of the Debtors, nor where disclosure would violate law, third-party trade secret protections, confidentiality obligations, or attorney-client privilege or work product protections, subject to commercially reasonable efforts to convey what can be provided without such violation. The Debtors also reserve discretion to withhold or limit access to sensitive information.
• Data Room access may be terminated in consultation with the Consultation Parties, including if a Prospective Bidder fails to become a Qualified Bidder or if the Bid Procedures are terminated, in which case non-public information must be returned or destroyed under the applicable confidentiality agreement.
• Each Prospective Bidder must acknowledge it has had an opportunity to conduct all due diligence regarding the Assets in conjunction with submitting its Bid.
• Any Prospective Bidder denied Data Room access or that believes it has not been dealt with in accordance with the Bid Procedures may report such concerns to the Office of the U.S. Trustee for Region 2 (One Bowling Green, Room 534, New York, New York 10004, attn. Annie Wells).

Bid Requirements

• To constitute a Qualified Bid, a Bid must be in writing and actually received by the Bid Deadline, and must satisfy the following, in each case to the satisfaction of the Debtors in consultation with the Consultation Parties:
  • Identification of Bidder: full disclosure of the legal identity of each person or entity bidding, sponsoring, financing (including through the issuance of debt), or participating in the Auction (including through a license or similar arrangement as to the Assets to be acquired) and the complete terms of such participation, together with any past or present connections or agreements with the Debtors or their non-Debtor affiliates, FHGRF, any other known Prospective Bidder or Qualified Bidder, or any officer or director of the foregoing, including any current or former officer or director of the Debtors or their non-Debtor affiliates.
  • Purchased Assets: express identification of the Assets to be purchased, including the Assigned Contracts sought, and the liabilities to be assumed, including any debt assumed and cure costs to be satisfied.
  • Form of Consideration: the Purchase Price must consist solely of cash (or a credit bid, if applicable) and assumed liabilities, with the source of cash consideration and funding commitments identified and confirmation that the consideration is not subject to contingencies. The Purchase Price must include payment of all allowed cure amounts and other amounts required to effect assumption and assignment under section 365; all broker, transaction, success, or similar fees due at closing to the Debtors' investment banker; and all applicable transfer taxes and costs (collectively, Closing Costs).
  • Allocation: the Purchase Price must be allocated among the Assets, with a good faith estimate of Closing Costs; such allocation does not prejudice any party's right to contest it.
  • Proposed Asset Purchase Agreement: a binding and irrevocable offer in the form of an asset purchase agreement approved for use by the Debtors, duly authorized and executed and marked against the Debtors' approved form, together with a form of sale order marked against the Sale Order reflecting the proposed transaction and any other modifications.
  • Ability to Close: a representation that the bidder is financially and operationally capable of timely consummating the transaction, sufficient evidence of financial wherewithal as reasonably determined by the Debtors, and Adequate Assurance Information for any Assigned Contracts included or potentially included in the Bid.
  • Representations and Warranties: statements that the bidder had an opportunity to conduct due diligence; relied solely on its own independent review and not on any statements, representations, warranties, or guaranties regarding the businesses, the Assets, or the completeness of information provided; that all proof of financial ability and adequate assurance information is true and correct; and that the bidder agrees to be bound by the Bid Procedures.
  • Authorization: evidence of board (or comparable governing body) authorization for submission, execution, delivery, Auction participation, and closing, or, for entities formed to effect the transaction, written evidence acceptable to the Debtors of equity holder authorization and approval.
  • Disclosures: identification with particularity of each and every condition to closing and all executory contracts and unexpired leases to be assumed and assigned, plus a commitment to close no later than Oct. 28, 2026.
  • Joint Bids: the Debtors may approve joint Bids in their discretion on a case-by-case basis.
• Other Requirements. A Qualified Bid must also:
  • Agree to serve as a Backup Bidder if selected at the Auction as the next highest or next best bid after the Successful Bid.
  • State that the Bid is a binding, irrevocable, good-faith and bona fide offer not subject to any due diligence, financing, or other contingency (other than closing conditions under the applicable agreement), irrevocable until the later of the applicable outside date for consummation or the Backup Bid Expiration Date.
  • Confirm commitment to close as soon as practicable and in any case no later than Oct. 28, 2026.
  • Specify whether the bidder intends to hire any of the Debtors' employees and the proposed treatment of the Debtors' prepetition compensation, incentive, retention, bonus, and other compensatory arrangements, plans, and agreements — including offer letters, employment agreements, consulting agreements, retiree benefits, and any other employment-related agreements (collectively, the Employee Obligations).
  • Expressly waive any claim or right to assert a substantial contribution administrative expense claim under section 503(b) or payment of broker fees or costs in connection with bidding or participating in the process.
  • Include covenants to cooperate with the Debtors in providing factual information regarding the bidder's operations for antitrust and other regulatory analysis and in obtaining Court approval, and to comply with the Bid Procedures and the Bid Procedures Order.
  • State or estimate the types and duration of any transition services the bidder would require of or provide to the Debtors if selected.
  • Certify no collusion with other bidders and that the bidder is not a partnership, joint venture, or other entity in which more than one bidder (or affiliate) holds a direct or indirect interest, absent written consent of the Debtors.
  • Include contact information for the person(s) the Debtors should contact regarding the bid.
• Outstanding Trade Payables: any Qualified Bid for substantially all Assets must assume all open accounts payable incurred in the ordinary course after the Aug. 9, 2026, petition date that are (i) entitled to priority status under section 503(b) — excluding fees or expenses of any Debtor, committee, or other estate professional — or (ii) entitled to statutory protections under the Perishable Agricultural Commodities Act or the Packers and Stockyards Act, to the extent applicable.
• Closing Fees: any Qualified Bid for substantially all Assets must agree to pay at closing all broker, transaction, success, or similar fees due to Hilco Corporate Finance, LLC, as applicable.
• Bids must be submitted by email to the Bid Notice Parties: the Debtors, c/o SierraConstellation Partners, LLC (jmeyers@scpllc.com); Hilco Corporate Finance, LLC, attn. Richard Klein (rklein@hilcocf.com); and counsel to the Debtors at Raines Feldman Littrell LLP.

Credit Bid

• FHGRF (or its designee) is deemed a Qualified Bidder under all circumstances and may, in its sole and absolute discretion, credit bid under section 363(k) and the DIP Documents.
• FHGRF has the unqualified right at any time to credit bid on a dollar-for-dollar basis its Prepetition Obligations and DIP Obligations, including accrued and unpaid interest, fees, costs, expenses, adequate protection claims, the Exit Fee, and the DIP Superpriority Claims, if any, in accordance with the DIP Order.
• FHGRF may credit bid all or any portion of its claims against all or any portion of the Assets, or combine a partial Credit Bid with a cash component, and is not required to provide a Good Faith Deposit.
• No party may seek to limit or challenge FHGRF's credit bid rights under section 363(k) absent a separate motion on notice to FHGRF with a hearing.
• The Debtors note that the DIP Order acknowledges FHGRF's credit bid rights and that FHGRF holds valid secured claims entitled to credit bid treatment under section 363(k).

Landlords and Unexpired Leases

• A landlord may bid to acquire the Debtors' interests in any unexpired lease to which it is a counterparty, and such bid may include any or all of the outstanding amounts owed under that lease.
• Each landlord under an unexpired lease of nonresidential real property is deemed a Qualified Bidder as to its own lease(s), without needing to satisfy the credit bidding, purchase agreement/sale order, ability-to-close, or good faith deposit requirements — except that it must submit a binding bid in writing in form and substance reasonably acceptable to the Debtors, in consultation with the Consultation Parties, in their discretion — and may offset the proposed purchase price with all or a portion of the applicable cure amount.
• If a landlord is the Successful Bidder on its lease and the actual cure amount is later determined or agreed to be lower, the landlord must pay the difference in cash upon the later of closing or such determination or agreement.

Good Faith Deposit

• Each Qualified Bid must be accompanied by a Good Faith Deposit in cash (or other form acceptable to the Debtors in consultation with the Consultation Parties) equal to 10% of the cash component of the Purchase Price; no deposit is required from FHGRF.
• Deposits are held in a trust account maintained on behalf of the Debtors. If a Qualified Bidder increases its purchase price before, during, or after the Auction, the Debtors may require the deposit to be adjusted to 10% of the increased price.
• The Debtors may increase or decrease the deposit for one or more Qualified Bidders in their sole discretion (except as to any Qualified Bid from FHGRF), but may not decrease or waive a deposit without consulting the Consultation Parties.
• Disposition of deposits:
  • Prospective Bidders that do not qualify: returned within five business days after the Debtors make final Qualified Bidder determinations, at which point the Bid is deemed terminated and no longer binding.
  • Other Qualified Bidders: returned within five business days after the conclusion of the Auction.
  • Backup Bidder: returned within five business days after the Backup Bid Expiration Date.
  • Successful Bidder: credited against the purchase price at closing.
• Forfeiture: a Qualified Bidder's deposit is forfeited if it attempts to withdraw its Bid, other than as permitted by the Bid Procedures, while the Bid remains binding and irrevocable, and a Successful Bidder's deposit is forfeited if it fails to consummate due to a breach entitling the Debtors to terminate the applicable agreement. Forfeited deposits are retained as partial compensation for damages and must be released by wire within two business days after written notice from an authorized officer of the Debtors.

Bid Protections

• None. Each Qualified Bid must expressly state and acknowledge that the bidder is not entitled to a break-up fee, termination fee, expense reimbursement, or other bidding protection in connection with its bid or participation in the Auction or Sale Transaction process, unless otherwise granted by the Debtors (in consultation with the Consultation Parties) and approved by order of the Court.
• The Debtors reserve the right to reject any Bid that seeks bid protections.

Bid Review Process

• The Debtors, in consultation with the Consultation Parties, will review each Bid for compliance and may engage with any Prospective Bidder to cure deficiencies, improve terms, or otherwise promote a more competitive process.
• The Debtors may, among other things, amend or waive conditions precedent to qualifying as a Qualified Bidder; extend the Bid Deadline as to any party or Assets; permit (but are not obligated to permit) a non-qualifying bidder to remedy deficiencies prior to the Auction; postpone or cancel the Auction and terminate the proposed sale of any Assets; or extend the Outside Closing Date in consultation with the DIP Lender.
• Evaluation factors may include the Assets and liabilities included or excluded, including executory contracts and unexpired leases; the proposed Purchase Price; the value provided to the Debtors and net economic effect on the estates (accounting for wind-down expenses, DIP obligations, and additional outstanding debt); benefits from assumption or waiver of liabilities and avoidance of additional costs; transaction structure and execution risk, including closing conditions, timing and certainty, termination provisions, financing contingencies and availability, general financial wherewithal, and required governmental approvals; the impact on employees and proposed treatment of Employee Obligations; the impact on trade creditors, licensees, clients, and other parties in interest; and any other factors the Debtors reasonably deem relevant consistent with their fiduciary duties.
• A Qualified Bidder may not modify, amend, or withdraw its Qualified Bid without the Debtors' consent, except to increase the Purchase Price or otherwise improve its terms.
• The Debtors reserve the right to reject any Bid (other than a Credit Bid from FHGRF) that, among other things, requires indemnification of the bidder, is untimely, is subject to contingencies or conditions precedent, seeks bid protections, does not include a fair and adequate Purchase Price, or the acceptance of which would not be in the best interests of the estates.
• Determinations regarding Qualified Bidder status, Auction Packages, the Baseline Bid, Minimum Overbids, the Leading Bid, the Successful and Backup Bids, rejection of bids, Sub-Auctions, Auction cancellation, and Sale Hearing adjournment rest with the Debtors in the exercise of their reasonable business judgment, consistent with their fiduciary duties and applicable law and in consultation with the Consultation Parties, subject to consistency with the Bid Procedures Order, the Bid Procedures, the DIP Documents, and the Bankruptcy Code, and must be acceptable in form and substance to FHGRF as DIP Lender. FHGRF is a Qualified Bidder under all circumstances.

Overbid

• Minimum Overbid: increments of no less than $250,000 for any overbid to the initial Baseline Bid at the start of the Auction and for each subsequent bid; a footnote confirms that the first round of the Auction will use $250,000 increments.
• The Debtors will announce the minimum required increments at the outset of each round and may, in consultation with the Consultation Parties, announce increases or reductions to Minimum Overbids at any time during the Auction.
• The Debtors may announce an Overbid Round Deadline by which Overbids in each round must be submitted, which they may extend from time to time in their business judgment upon consultation with the Consultation Parties.

Auction Details

• If more than one Qualified Bid is received for an Asset or combination of Assets, the Auction will be held on Oct. 5, 2026, at 10 a.m. ET, in person at the offices of Raines Feldman Littrell LLP, 1350 Avenue of the Americas, 22nd Floor, New York. The Debtors may hold the Auction at a different location or remotely, including telephonically or by video conference, on not less than 24 hours' notice by docket filing and email to registered attendees. Proceedings will be transcribed and/or video recorded.
• Where more than one Qualified Bid exists for specific combinations of Assets, the Debtors may first conduct a separate Sub-Auction for those Assets, and reserve the right to host Sub-Auctions for Auction Packages at their discretion.
• Participation: only Qualified Bidders that have submitted Qualified Bids may participate, and each must inform the Debtors in writing at least one day prior whether it intends to participate. Participants must appear in person (unless the Auction proceeds via Zoom) or through a duly authorized representative with authority to enter into any bid or asset purchase agreement. The Debtors may set a reasonable limit on the number of representatives and advisors accompanying each bidder.
• Attendance: the Auction will be conducted openly; all Qualified Bidders (including FHGRF) may attend, and creditors and their advisors may attend upon prior registration by contacting the Debtors' advisors no later than one day before the start of the Auction. The U.S. Trustee may attend.
• Each participating Qualified Bidder must confirm in writing and on the record that it has not engaged in collusion and that its Bids constitute binding, good-faith, and bona fide offers.
• Bidding will commence at the Baseline Bid — the highest and/or best Qualified Bid as determined by the Debtors in their business judgment prior to the Auction — and continue in rounds so long as at least one Subsequent Bid improves on the bidder's prior Qualified Bid and is higher or otherwise better than the Baseline Bid (first round) or the Leading Bid (subsequent rounds).
• Upon declaring a Bid at the Auction, a Qualified Bidder (other than FHGRF) must state on the record its commitment to pay, within two business days following the Auction, the Incremental Deposit Amount calculated on the increased purchase price if its Bid is selected as the Successful Bid or Backup Bid.
• In evaluating consideration in each round, the Debtors will consider any additional liabilities to be assumed (including whether secured or unsecured), any additional costs imposed on the Debtors, the provision of any Wind-Down Expenses, treatment of the Debtors' DIP obligations (including whether a Bid provides for indefeasible repayment in full, in cash, of all DIP Obligations and Prepetition Secured Obligations at closing), and any additional outstanding debt.
• Between rounds, the Debtors will announce and describe the material terms of the Leading Bid, and each round concludes after every participating bidder has had the opportunity to submit a Subsequent Bid with full knowledge of those terms. Bidding is conducted openly in the presence of all Qualified Bidders, each of whom may submit additional Bids and modify its Proposed Asset Purchase Agreement to improve its Bid. The Debtors may negotiate with bidders outside the presence of others before each round.
• After each Overbid Round Deadline, the Debtors will announce whether they have identified an Overbid that is higher or otherwise better than the Baseline Bid (initial round) or than the Overbid previously designated as the Prevailing Highest Bid (subsequent rounds), and will describe to all Qualified Bidders that bid's material terms and the value attributable to it based on the Bid Assessment Criteria.
• No round-skipping is permitted: a Qualified Bidder that fails to bid in a round, or fails to submit a higher or otherwise better offer than the immediately preceding Bid in that round, will be disqualified from continuing to participate.
• Bid Assessment Criteria for determining the Baseline Bid and Successful Bid may include the type and amount of Assets sought; the amount and nature of total consideration; the likelihood and timing of closing; the net economic effect of changes to value received by the estates; tax consequences; assumption of obligations, including contracts and leases; cure amounts to be paid; and the impact on employees, including the number of employees to be transferred and employee-related obligations assumed.
• The Debtors may reject at any time, without liability, any bid deemed inadequate, non-conforming, or contrary to the best interests of the estates, and may announce additional procedural rules at the Auction — including time limits for Subsequent Bids, the amount of the Minimum Overbid, or a requirement for "best and final" Bids — provided such rules are not materially inconsistent with the Bid Procedures Order, the DIP Documents, the Bid Procedures, the Bankruptcy Code, or any Court order; are disclosed to each Qualified Bidder; and are acceptable to FHGRF to the extent it is a Consultation Party.
• The Auction continues until there is only one Qualified Bid that, per the Bid Procedures, the Debtors and the Consultation Parties determine to be the highest or otherwise best Qualified Bid, which is declared the Successful Bid; the Auction will not close until all Qualified Bidders have had a reasonable opportunity to overbid the then Prevailing Highest Bid. This language sits in tension with the separate provision stating that consultation rights do not limit the Debtors' discretion and carry no veto right. Acceptance is conditioned on Court approval, and nothing in the Bid Procedures prevents the Debtors from exercising their fiduciary duties.
• Any Bid for Assets in an Auction Package remains subject to the Debtors' determination that a Bid for substantially all Assets and/or a differently grouped combination of Bids is the highest or otherwise best offer.
• The Successful Bidder must, within one business day of the conclusion of the Auction, wire the Incremental Deposit Amount (if applicable) and submit fully executed documentation memorializing the Successful Bid. As soon as reasonably practicable after the Auction closes, the Debtors will finalize definitive documentation implementing the Successful Bid and, as applicable, cause it to be filed with the Court.
• If the Debtors determine not to hold an Auction for some or all Assets, they will file with the Court and publish on the Epiq claims agent website a notice of cancellation identifying the Successful Bidder, including a copy or summary of the material terms of the Successful Bid and any contemplated assumption and assignment of Contracts, and setting forth the date, time, and location of the applicable Sale Hearing.
• No later than Oct. 6, 2026, the Debtors will file, serve on the Sale Notice Parties by first-class mail, and publish on the Epiq claims agent website a Notice of Auction Results identifying each Successful Bidder and each Backup Bidder; attaching a copy of each Successful Bid and each Backup Bid (or a summary of the material terms of such bids), including any proposed assumption and assignment of Contracts; identifying, to the extent not otherwise disclosed, the amount of each bid and the portion payable in cash or as a credit bid; and setting forth the applicable objection deadlines and the date, time, and location of the Sale Hearing.
• All persons participating in the Auction or bidding process are deemed to have consented to the Court's core jurisdiction, waived any right to a jury trial in related disputes, and consented to entry of final orders or judgments notwithstanding any Article III limitation.

Backup Bidder

• Prior to the conclusion of the Auction, the Debtors will determine the next highest or otherwise best Qualified Bid after the Successful Bid and notify all Qualified Bidders of the Backup Bidder's identity, purchase price, and other material terms.
• Each Backup Bidder must wire the Incremental Deposit Amount based on its Backup Bid purchase price no later than one business day following announcement, and must submit execution versions of the documentation memorializing its Backup Bid within one business day of the conclusion of the Auction.
• A Backup Bid remains binding until the first business day after the closing of a Sale Transaction with the Successful Bidder (the Backup Bid Expiration Date).
• If the Successful Bidder fails to consummate, the Backup Bidder is deemed the new Successful Bidder and the Debtors are authorized, but not required, to consummate the sale with it.
• If a Sale Transaction with the Successful Bidder is terminated prior to the Backup Bid Expiration Date, the Debtors will file and serve a Notice of Intent to Proceed with Backup Bid identifying the Backup Bidder and the proposed assignee entity for real property leases; counterparties will have two business days to object solely on adequate assurance grounds, and any such objections will be set for a hearing that may be expedited. Approval of a Backup Bidder at the Sale Hearing is expressly subject to these objection rights.

Adequate Assurance and Assumption and Assignment

• Each Qualified Bid must include Adequate Assurance Information evidencing the bidder's (or relevant assignee's) ability to comply with section 365, including curing existing defaults and performing future obligations under any Assigned Contracts.
• Adequate Assurance Information may include a corporate organizational chart or similar ownership and control disclosure; financial statements; tax returns; annual reports; summaries of the proposed assignee's industry experience, including the number of restaurants currently operating and all trade names used; the intended use of the premises and a description of the business to be conducted there; the proposed assignee's operating experience and financial projections; and a contact person available to counterparties after the Successful Bidder is identified.
• The information must be sufficient as reasonably determined by the Debtors, in a form permitting immediate dissemination to counterparties, subject to confidentiality protections in the Bid Procedures Order. The Debtors may require additional information.
• The Debtors will serve all available Adequate Assurance Information on applicable counterparties by mail and email no later than Oct. 2, 2026. Counterparties must treat the information confidentially, may share it only with Representatives (who are deemed bound by the same restrictions), and may use it only to evaluate adequate assurance or support an adequate assurance objection; objections containing confidential information must be filed under seal, subject to a motion to seal and Court approval.
• The Assumption and Assignment Notice, identifying the relevant Contracts and a good faith estimate of Cure Amounts, will be filed no later than Sept. 18, 2026, and promptly served on the Sale Notice Parties. The notice will state that assumption and assignment of any Contract is neither required nor guaranteed and will inform counterparties of the Contract Objection Deadline.
• Contract Objections — objections to proposed Cure Amounts or to assumption and assignment unrelated to the identity or ability to perform of the proposed assignee — must be filed and served by the Sale Objection Deadline. Adequate Assurance Objections — those based on the assignee's adequate assurance of future performance or identity — must be filed and served by the Post-Auction Objection Deadline.
• The Debtors and objecting counterparties must first confer in good faith. Unresolved objections may, at the Debtors' election, be adjourned to a subsequent hearing on at least five days' notice, and an Adjourned Objection may be resolved after closing provided such determination occurs before expiration of the Debtors' section 365(d)(4) deadline, as it may be extended.
• Upon resolution of an Adjourned Objection and payment of the applicable Cure Amount, the Contract is deemed assumed and assigned as of the closing date or as otherwise ordered. If resolution is less favorable to the assignee than set forth in the Assumption and Assignment Notice, the assignee may elect not to take assignment — before the section 365(d)(4) deadline — provided no such determination reduces the purchase price or other consideration received by the estates.
• Failure to file a timely Contract Objection constitutes consent to the assumption and assignment and renders the noticed Cure Amounts controlling and the only amounts necessary to cure defaults under section 365(b), absent written agreement between the counterparty and the Successful Bidder. Failure to file a timely Adequate Assurance Objection constitutes consent to, and deemed provision of, adequate assurance of future performance under sections 365(b)(1)(C) and 365(f)(2)(B), and, if applicable, section 365(b)(3).
• Successful Bidders may designate additional Contracts for assumption and assignment or re-designate previously included Contracts as excluded assets. The Debtors will use commercially reasonable efforts to promptly file, serve, and publish notice of any such designation and serve the applicable Adequate Assurance Information; counterparties will have 14 days to object.
• Nothing in the Bid Procedures Order or any asset purchase agreement modifies the Debtors' section 365(d)(4) deadline. Cure Amounts satisfied at closing remain subject to adjustment for postpetition obligations incurred and payments made in the ordinary course prior to closing.
• Promptly after closing, the Debtors will file, serve, and publish a notice listing the Contracts assumed and assigned and the applicable assignment effective date for each.
• Listing a Contract or Cure Amount on any notice is not a determination or admission that the Contract is executory or an unexpired lease, nor a guarantee that it will be assumed or assigned; the Debtors reserve all rights, claims, and causes of action with respect to each listed Contract.
• Note: the form Assumption and Assignment Notice attached to the proposed order states that a counterparty that does not object by the Sept. 29 Contract Objection Deadline is barred from objecting on adequate assurance grounds as of the closing date — which is inconsistent with the separate Oct. 9 Post-Auction Objection Deadline for adequate assurance objections established by the Bid Procedures Order.

Sale Notice and Noticing

• The Sale Notice will be served at least 21 days in advance of the Sale Hearing, and within one business day after entry of the Bid Procedures Order the Debtors will file, serve on the Sale Notice Parties, and publish it on the Epiq claims agent website at https://dm.epiq11.com/case/firemangroup/.
• Service will be made on the Sale Notice Parties; all known creditors for whom identifying information and addresses are available to the Debtors; counsel to FHGRF; all parties who have expressed a written interest in some or all of the Assets; all known holders of liens, encumbrances, and other claims secured by the Assets; the IRS; all applicable state and local taxing authorities; each governmental agency that is an interested party; counsel to any statutory committee; and all parties requesting or entitled to notice under Bankruptcy Rule 2002. A copy will also be provided to all parties that executed confidentiality agreements with the Debtors in Hilco's marketing process.
• The Sale Notice Parties include all persons and entities known by the Debtors to assert liens; any governmental authority known to have a claim; the Federal Trade Commission; the Bureau of Consumer Protection; the Consumer Financial Protection Bureau; the Office of the U.S. Trustee for Region 2; all applicable federal, state and local taxing authorities, including the IRS; the U.S. Attorney's Office and the U.S. Attorney General's Office for the Southern District of New York; the Office of the Attorney General and Secretary of State in each state in which the Debtors operate; counsel for any official committee; all parties requesting notice under Bankruptcy Rule 2002; and all other parties as directed by the Court.
• Counterparties may request adequate assurance information by email after the Bid Deadline.

Objection Deadlines

• Sale Objections must be in writing, state with specificity the legal and factual bases with supporting documentation, and be filed and served by Sept. 29, 2026, at 4 p.m. ET.
• Post-Auction Objections — addressing the conduct of the Auction, adequate assurance of future performance by any Successful Bidder or Backup Bidder, and the particular terms of any proposed Sale Transaction in a Successful Bid or Backup Bid — must be filed and served by Oct. 9, 2026, at 12 p.m. ET.
• Any party failing to timely file and serve a Sale Objection or Post-Auction Objection is forever barred from asserting such objection at or after the Sale Hearing and is deemed to consent to the sale for purposes of section 363(f), including the transfer of Assets free and clear.

Sale Hearing

• The Sale Hearing will be held on Oct. 14, 2026 — the time is left blank in the Motion — before the Honorable Shireen A. Barday in the U.S. Bankruptcy Court for the Southern District of New York, One Bowling Green, with a deadline for entry of the Sale Order on or before Oct. 16, 2026. A Sale Transaction contemplated by a Backup Bid that is subsequently deemed a Successful Bid is carved out of the Oct. 14 hearing and handled through the Notice of Intent to Proceed with Backup Bid process.
• Each Successful Bid, including any Backup Bid subsequently deemed a Successful Bid, is subject to Court approval; the Debtors' presentation of a bid to the Court does not constitute acceptance, which occurs only upon Court approval at the Sale Hearing.
• At the Sale Hearing, the Debtors will seek entry of one or more Sale Orders that, among other things, authorize and approve the Sale Transaction(s) to the Successful Bidder(s) and/or Backup Bidder(s); find that such parties are good faith purchasers under section 363(m); and, as appropriate, exempt the transactions and conveyances from any transfer tax, stamp tax or similar tax, or deposit under any applicable bulk sales statute.
• The Debtors may, in their business judgment and after consulting with the Successful Bidder(s) and the Consultation Parties, adjourn or reschedule the Sale Hearing, including by announcement at the Auction or in Court.
• Although the Motion refers to a proposed Sale Order attached as Exhibit B, the exhibit states that the proposed Sale Order is to be filed separately and it was not filed with the Motion — notwithstanding that each Qualified Bid must include a form of sale order marked against it.

Sale Free and Clear, Successor Liability, and Fraudulent Conveyance Findings

• The Debtors seek authority to convey the Assets free and clear of all liens, claims, rights, interests, pledges, obligations, restrictions, limitations, charges, and encumbrances under section 363(f), with such interests to attach to the proceeds of the Sale Transactions, except for interests constituting assumed liabilities under the applicable purchase agreement.
• Section 363(f) is drafted in the disjunctive, and the Debtors submit that as to any interest that will not be an assumed liability they satisfy or will satisfy at least one of its five conditions, and that any such interest will be adequately protected by payment in full at closing or by attachment to the net sale proceeds, subject to any claims and defenses the Debtors may possess.
• The Debtors anticipate that the proposed Sale Order will include findings as to successor liability that are limited and appropriately tailored to the needs of the Sale Transactions, and requested findings as to fraudulent conveyance for purposes of statutory and common-law fraudulent conveyance and fraudulent transfer claims, which the Debtors describe as customary and necessary for transactions of this type.
• The Debtors request a finding that any Successful Bidder is entitled to the protections of section 363(m) as a good faith purchaser, and state they will not select as Successful Bidder or Backup Bidder any entity whose good faith could reasonably be doubted.

Reservation of Rights and Order of Precedence

• The Motion's summary of the Bid Procedures is qualified in its entirety by the Bid Procedures themselves, which govern in the event of any conflict. The proposed Bid Procedures Order provides that the Order controls over the Motion, but that the Bid Procedures control over the Order.
• Nothing in the Motion or any order granting it is intended as an admission as to the validity, priority, or amount of any claim; a waiver of any party's right to dispute a claim; a promise or requirement to pay any claim; a request to assume any agreement other than the Assigned Contracts; or a concession that any lien is valid. The Debtors expressly reserve the right to contest the extent, validity, or perfection of, or to seek avoidance of, any such lien.
• The Bid Procedures Order will bind the Debtors and their successors and assigns, including any chapter 7 or chapter 11 trustee or other fiduciary appointed for the estates, and all time periods under it are calculated in accordance with Bankruptcy Rule 9006(a).

Extraordinary Provisions

• Section I.D(5) — No Good Faith Deposit. The Bid Procedures excuse FHGRF from posting a Good Faith Deposit, and landlords bidding on their own leases are likewise exempt from the deposit requirement.
• Section I.D(9) — Record Retention: the Debtors will make appropriate arrangements with any Successful Bidder for reasonable access to the Debtors' books and records to administer the Chapter 11 Cases.
• Section I.D(12) — Successor Liability findings, as described above.
• Section I.D(14) — Requested findings as to fraudulent conveyance: that the consideration constitutes reasonably equivalent value and fair consideration, and that the applicable asset purchase agreement was not entered into by the Debtors and the Successful Bidder for the purpose of hindering, delaying, or defrauding the Debtors' present or future creditors, in each case for purposes of statutory and common-law fraudulent conveyance and fraudulent transfer claims. The Debtors describe these protections as customary and necessary for transactions of this type.
• Section I.D(16) — Relief from the 14-day stay under Bankruptcy Rule 6004(h).
• The Debtors will supplement the Motion if additional Extraordinary Provisions are included in a proposed order approving a Sale Transaction.

Waiver of Stay and Modification of the Bid Procedures

• The Debtors request that the Sale Order be effective immediately upon entry, with the 14-day stays under Bankruptcy Rules 6004(h) and 6006(d) waived, citing the need to access sale proceeds as quickly as possible to fund operations and to propose, prosecute, and confirm a chapter 11 plan.
• In connection with a sale closing no later than Oct. 28, 2026, and based on the current DIP Budget, the Debtors anticipate needing access to additional cash to fund operations and formulate an exit from chapter 11.
• The Debtors may modify the Bid Procedures in their business judgment, in consultation with the Consultation Parties, including to extend or waive deadlines, adopt new rules (such as requiring last and final bids on a "blind basis"), provide reasonable accommodations to any stalking horse bidder, or otherwise promote competitive bidding — provided such changes are consistent with the Bid Procedures Order, the Bid Procedures, the DIP Documents, the Bankruptcy Code, and other Court orders; are promptly communicated to each Qualified Bidder; and are acceptable to FHGRF to the extent it is a Consultation Party. Non-substantive changes, including typographical and grammatical corrections, may be made without further Court order, with copies to the U.S. Trustee.

Key Dates

• Petition Date: Aug. 9, 2026
• Motion Filed: Aug. 20, 2026
• Hearing to Consider Approval of Bid Procedures / Final DIP Hearing: Sept. 3, 2026
• Entry of Bid Procedures Order and Deadline for the Debtors to File and Serve the Sale Notice: Sept. 4, 2026
• Assumption and Assignment Notice Filing Deadline: Sept. 18, 2026
• Sale Objection and Cure Objection Deadline: Sept. 29, 2026, at 4 p.m. ET
• Bid Deadline: Sept. 29, 2026, at 5 p.m. ET
• Deadline to Qualify and Notify Bidders: Oct. 1, 2026, or as soon as practicable thereafter (but prior to the Auction)
• Deadline to Serve Adequate Assurance Information: Oct. 2, 2026
• Auction (if necessary): Oct. 5, 2026, at 10 a.m. ET
• Filing of Notice of Auction Results: Oct. 6, 2026
• Post-Auction Objection Deadline: Oct. 9, 2026, at 12 p.m. ET
• Sale Hearing: Oct. 14, 2026
• Deadline for Entry of Sale Order: Oct. 16, 2026
• Outside Closing Date: Oct. 28, 2026
• Backup Bid Expiration Date: the first business day after the closing of a Sale Transaction with the Successful Bidder
• DIP Milestone — Filing of Proposed Plan of Reorganization and Disclosure Statement: Sept. 30, 2026
• Note: the Motion's schedule table lists both entry of the Bid Procedures Order and the deadline to file and serve the Sale Notice as Sept. 4, 2026, while the proposed order requires the Sale Notice to be filed and served within one business day after entry of that order.