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

Bidding Procedures / Asset Purchase Agreement Summary

Overview

• The court entered the bidding procedures order on Sept. 4, 2026, approving a competitive sale process for all or any part of the assets of S.M.F. Group Inc. and its 21 affiliated debtors, the Fireman Group restaurant operator behind Brooklyn Diner, Red Eye Grill, Brasserie 57 and Fiorello's Roman Cafe, which filed Chapter 11 on Aug. 9, 2026 in the Southern District of New York.
• The bidding procedures as entered designated no stalking horse and granted no bid protections, but reserved the debtors' right, in consultation with the consultation parties, to provide reasonable accommodations to a stalking horse bidder, subject to a further court order approving any bid protections. The debtors are otherwise soliciting offers on an open-market basis in one or more lots to one or more purchasers.
• On Sept. 22, 2026, the debtors filed a corrected motion (Docket No. 189) seeking authority to enter into a stalking horse asset purchase agreement with FHG Acquisition, LLC, an affiliate of Landry's LLC, for the operating assets of Café Fiorello, Trattoria Dell'Arte, Bond 45 and additional restaurants, at a $9.5 million cash base purchase price plus cure costs and assumed liabilities, and approval of a $266,000 break-up fee and up to $50,000 of expense reimbursement. The debtors requested a hearing on Sept. 24, 2026, with objections due the same morning. The motion is supported by the declaration of Richard Klein.
• The assets may be sold as a whole or in packages: a bid for an individual asset is subject to higher or better bids on packages containing that asset, and a bid for all assets is subject to combinations of individual or package bids that are collectively higher or better. The debtors may run separate sub-auctions for individual auction packages.
• The order was entered following a Sept. 3, 2026 hearing, with any objections overruled or withdrawn, no others interposed and a certificate of no objection on file.
• Where the order and the bid procedures are inconsistent, the bid procedures control; where the order and the underlying motion are inconsistent, the order controls.
• Hilco Corporate Finance is the debtors' proposed investment banker and the contact for diligence and bid submissions; bids must be emailed to Hilco, to the debtors care of SierraConstellation Partners, and to debtors' counsel, Raines Feldman Littrell.

Stalking Horse Bidder and Parties

• Purchaser: FHG Acquisition, LLC, a Texas limited liability company and an affiliate of Landry's LLC, with notices directed care of Fertitta Entertainment in Houston; its counsel is Young Conaway Stargatt & Taylor. The purchaser may assign its rights or designate affiliates or third-party designees to take title to specified assets or assume specified liabilities, but remains liable for its obligations.
• Sellers: Broadway Hospitality Venture, LLC; Cieli Partners, L.P.; Fiorello's Roman Cafe, Inc.; Brasserie 57 LLC; Brooklyn Diner USA, L.P.; Italian Cafe Concepts, LLC; and The Fireman Group Cafe Concepts, Inc.
• IP Sellers: S.M.F. Group Inc., SMJ Group, Inc. and SFAP Group, LLC join the agreement solely to convey scheduled trademarks and are not otherwise parties; their obligations are several and not joint.
• The debtors state the stalking horse APA resulted from Hilco's marketing process and arm's-length negotiations, was reviewed with the consultation parties (the official committee of unsecured creditors, appointed Aug. 27, 2026, and FHGRF), and will establish a floor for competitive bidding. To the debtors' knowledge, there was no collusion between the stalking horse bidder and other parties that submitted proposals.
• Under the proposed order, the stalking horse bidder is deemed a qualified bidder for the stalking horse assets, and the stalking horse APA constitutes the baseline bid for those assets.
• The agreement is not binding on the sellers until the court enters the sale order approving it and the sellers execute a counterpart; the purchaser's execution constitutes an irrevocable offer through the period required by the bid procedures and, if designated backup bidder, through the backup bid expiration date.

Purchased Assets

• The motion describes the stalking horse assets as substantially all operating assets of the Café Fiorello, Trattoria Dell'Arte and Bond 45 restaurants and of the Café Paradiso, Paris Bar, Le Jardin Rooftop and Brooklyn Diner (57th Street location) restaurants. The APA recitals define the restaurants as Café Fiorello, Trattoria Dell'Arte, Bond 45, Café Paradiso, Café Brooklyn Diner, Fiorella Italian Kitchen & Pizzeria, Brooklyn Delicatessen, and Paris Bar & Le Jardin Rooftop.
• Assets include the assigned contracts and restaurant leases on the schedules; equipment, point-of-sale systems, furniture, fixtures, supplies and inventory (with alcoholic beverage inventory transferring only once the purchaser obtains required liquor license approvals where law so requires); intellectual property primarily used in or necessary for the business, including recipes, menus and customer lists; permits to the extent transferable; books and records; goodwill; vendor rebates and promotional allowances; prepaid expenses and security and utility deposits under assigned agreements; and supplier warranties.
• Cash in registers and safes at continuing restaurants at closing and unsettled card receivables transfer to the purchaser, which bears processing fees, chargebacks and refunds; card receivables exclude amounts subject to claims listed on the excluded-asset schedule, including referenced adversary proceedings.
• Included actions comprise claims and causes of action, including avoidance actions, against the purchaser and its affiliates, assigned-contract counterparties, transferred employees, and vendors that supplied the business within 90 days before closing; the sellers retain those claims (other than against the purchaser) solely as a defense and offset to claims filed against the estates.
• The IP Sellers convey the trademarks identified by registration or application number on a schedule, with associated goodwill and infringement claims, free and clear under section 363(f); no separate consideration is payable for the marks. No other IP Seller asset, and no IP Seller claim or avoidance action, is conveyed.

Excluded Assets

• Excluded assets include cash and bank accounts (other than restaurant cash, card receivables and deposits described above), intercompany receivables, claims that are not included actions (including all claims against merchant cash advance funders), avoidance actions that are not purchased assets, contracts that are not assigned agreements, equity in any seller or affiliate, pre-closing tax refunds and attributes, and insurance policies and proceeds, other than proceeds relating to events affecting purchased assets between execution and closing.
• Also excluded are corporate records, records pertaining exclusively to excluded assets, personnel records of non-transferred employees, privileged materials, and assets listed on the excluded-asset schedule.

Purchase Price and Assumed Liabilities

• Total consideration consists of a $9.5 million base purchase price payable in cash at closing, plus cure costs for assigned agreements, plus the assumed liabilities. The debtors estimate the assumed liabilities at more than $2.5 million, including substantial administrative expense claims.
• If the purchaser is required, as a condition to closing or to owning or operating any purchased asset, to pay or assume any seller liability other than cure costs and assumed liabilities, the base purchase price is reduced dollar for dollar. Any such additional required liability must be agreed by the parties or fixed by the court no later than two days before closing, with no post-closing true-up; the sellers deliver a closing calculations statement of cure costs, current working capital liabilities and additional required liabilities two business days before closing.
• Assumed liabilities include cure costs; post-closing obligations under assigned agreements; WARN Act liabilities arising from the purchaser's hiring decisions or post-closing terminations at the restaurants; gift card obligations, limited to honoring remaining face value as a credit against food and beverage purchases, with no cash redemption; post-closing obligations under transferred permits; transfer taxes not exempt under section 1146(a); post-petition section 503(b) priority trade payables owed to counterparties to assigned agreements; and accrued but not-yet-payable vacation and paid time off of transferred employees.
• The purchaser also assumes post-petition current working capital liabilities of the restaurants that are not past due at closing: food invoices no more than seven days old, beverage invoices no more than 30 days old, sales and use taxes whose remittance date has not passed, wages whose regular payment date has not occurred, and other ordinary-course vendor amounts not yet due. Past-due amounts are excluded liabilities.
• The purchaser assumes the Hilco fee, equal to 4% of the sum of the base purchase price and other assumed liabilities (excluding the fee itself), to be satisfied at closing.
• Excluded liabilities include employee benefit plan and COBRA obligations, corporate-level liabilities, pre-closing employment claims and compensation (other than assumed paid time off), other WARN Act liabilities, pre-closing PACA and Packers and Stockyards Act claims, environmental liabilities, broker fees other than the Hilco fee, liabilities of non-purchased restaurants and operations, and pre-closing taxes.

Credit Bidding

• FHGRF LLC, the debtors' DIP lender, is a qualified bidder under all circumstances and may credit bid in its sole discretion under section 363(k), against all or any portion of the assets, in whole or in part and in combination with a cash component. The credit bid may encompass accrued and unpaid interest, fees, costs, expenses, adequate protection claims and the exit fee under the DIP order, and any such bid is automatically a qualified bid.
• FHGRF is not required to post a good faith deposit, and the debtors' right to reject bids does not extend to a credit bid from FHGRF.
• No party may seek to limit or challenge FHGRF's credit bid rights absent a separate motion on notice to FHGRF with a hearing.
• Landlords may bid on their own leases as of-right qualified bidders and may offset the purchase price by all or a portion of the applicable cure amount; a landlord bid may include any or all outstanding amounts owed under the lease. If a landlord is the successful bidder on its lease and the court later determines, or the debtors and the landlord agree, that the actual cure amount is lower, the landlord pays the difference in cash on the later of the closing or that determination. Landlord bidders are excused from the credit bidding, purchase agreement and form sale order, ability-to-close and deposit requirements, but must still submit a binding written bid in form and substance reasonably acceptable to the debtors.

Good Faith Deposit

• Deposit: 10% of the cash component of the purchase price, in cash or another form acceptable to the debtors, held in a trust account maintained on the debtors' behalf. FHGRF is exempt.
• The stalking horse bidder must fund a deposit of 10% of the purchase price into a non-interest-bearing escrow account with a mutually agreed escrow agent, applied against the purchase price at closing. If its bid is increased at the auction, the APA requires it to top up the deposit to 10% of the increased price within two business days after the auction; failure to do so permits the sellers to terminate immediately without a cure period.
• The debtors may require a bidder that raises its price before, during or after the auction to top up its deposit to 10% of the increased price, and may otherwise increase or decrease a deposit in their discretion, though a decrease or waiver requires consultation and no such adjustment applies to an FHGRF bid.
• A bidder declaring a bid at the auction, other than FHGRF, must state on the record its commitment to wire the incremental deposit amount within two business days after the auction should its bid be selected as the successful or backup bid, though the auction-results provision gives the successful bidder one business day from the conclusion of the auction to wire that amount as a condition to remaining the successful bidder.
• Deposits are returned within five business days after the debtors determine which prospective bidders qualify (for those that do not qualify), within five business days after the auction closes (for qualified bidders other than the successful and backup bidders), and within five business days after the backup bid expiration date, the first business day after the successful bidder's sale closes (for the backup bidder). The successful bidder's deposit is credited against the purchase price at closing.
• A deposit is forfeited if a qualified bidder attempts to withdraw its bid while it remains irrevocable, or if a successful bidder fails to close because of a breach entitling the debtors to terminate; forfeited deposits are wired to the debtors within two business days of written notice from an authorized officer, and are retained as partial compensation for damages.
• Under the APA, the stalking horse deposit is returned within two business days after any termination other than a termination by the sellers for the purchaser's uncured breach, in which case it is delivered to the sellers.

Overbid

• Minimum Overbid Increment: $250,000, applicable to the first overbid to the baseline bid and to each subsequent bid.
• The debtors announce the required increment at the outset of each round and may raise or lower it at any time during the auction in consultation with the consultation parties.

Bid Protections

• Under the bid procedures, every qualified bid must expressly acknowledge that the bidder is not entitled to a break-up fee, termination fee, expense reimbursement or other bidding protection, absent a grant by the debtors in consultation with the consultation parties and approval by court order; the debtors may reject any bid that seeks bid protections.
• For the stalking horse bidder, the debtors seek approval of a break-up fee of 2.8% of the base purchase price, or $266,000, and reimbursement of reasonable and documented out-of-pocket fees and expenses, including attorneys' fees, of up to $50,000. The combined protections of approximately $316,000 represent about 3.3% of the base purchase price; the debtors state they are less than 2.75% of total consideration when the assumed liabilities are included, and that the break-up fee alone is less than 2.2% on that basis.
• The protections would be allowed administrative expense claims under section 503(b), payable solely from the proceeds of an alternative sale of the stalking horse assets to another party and only upon consummation of that sale, within three business days after its closing; the APA provides that they are senior to other creditors' claims against those proceeds. They are not payable if the stalking horse bidder is the successful bidder.
• The APA triggers payment where the agreement is terminated because the purchaser is not designated successful or backup bidder at an auction, the sellers enter into a definitive agreement for an alternative transaction, or an alternative transaction is consummated. The protections and return of the deposit are the purchaser's sole remedy arising from an alternative transaction.
• The debtors argue the protections satisfy the Genco standard: they were negotiated at arm's length, were a material inducement to and condition of the stalking horse commitment, will not chill bidding, and are reasonable relative to the purchase price. The debtors also seek waiver of the 14-day stay under Bankruptcy Rule 6004(h).
• If the debtors filed the stalking horse motion by Sept. 22, 2026, sought a hearing by Sept. 25, 2026, and used commercially reasonable efforts toward entry of the order, the bid protection covenant is deemed satisfied; if the order is not entered, the purchaser may terminate and recover its deposit.

Bid Requirements

• Consideration must consist solely of cash, or a credit bid where applicable, plus assumed liabilities, with the source of cash and funding commitments identified and confirmation that the consideration carries no contingencies. The purchase price must cover allowed cure amounts and all other amounts needed to effect assumption and assignment under section 365, the broker, transaction, success or similar fees payable to the investment banker at closing, and applicable transfer taxes and costs. Each bid must allocate the purchase price among the assets and provide a good faith estimate of closing costs, without prejudice to any party's right to contest the allocation.
• Any bid for substantially all assets must additionally assume all open post-petition ordinary-course accounts payable entitled to priority under section 503(b), excluding estate professional fees, or entitled to protection under the Perishable Agricultural Commodities Act or the Packers and Stockyards Act, and must agree to pay Hilco's closing fees.
• Bids must take the form of an executed, binding and irrevocable asset purchase agreement on the debtors' approved form, marked against that form, together with a proposed sale order marked against the form sale order.
• Bidders must disclose their legal identity, every party sponsoring, financing or otherwise participating in the bid and the terms of that participation, and any past or present connections or agreements with the debtors, their non-debtor affiliates, FHGRF, any other known bidder, or any current or former officer or director of those parties.
• Bids must identify the assets and assigned contracts sought and the liabilities to be assumed, including debt assumed and cure costs to be paid, and must identify with particularity every closing condition.
• Bids must include a representation of financial and operational capability to close, evidence of financial wherewithal satisfactory to the debtors, board or equity-holder authorization to bid and close, and adequate assurance information for any assigned contracts.
• Adequate assurance information may include an organizational chart, financial statements, tax returns, annual reports, a summary of the assignee's industry experience including the number of restaurants it operates and trade names used, its intended use of the premises and the business to be conducted there, its operating experience and financial projections, and a contact person for counterparties. It must be in a form permitting immediate dissemination, and the debtors may require additional information.
• Bids must be irrevocable until the later of the outside date for consummation and the backup bid expiration date, must not be conditioned on diligence, financing or any other contingency beyond the closing conditions, and must commit to close no later than Oct. 28, 2026.
• Each bidder must agree to serve as backup bidder if its bid is next highest or best, certify that it has not colluded and is not a vehicle in which multiple bidders hold interests absent the debtors' written consent, waive any substantial contribution claim under section 503(b) and any broker fees, and covenant to comply with the bid procedures.
• Bids must specify whether the bidder intends to hire any of the debtors' employees and the proposed treatment of prepetition compensation, incentive, retention, bonus and other compensatory arrangements, including offer letters, employment and consulting agreements and retiree benefits.
• Bids must estimate any transition services the bidder would require from or provide to the debtors and the expected duration, covenant to cooperate on antitrust and regulatory analysis and on obtaining court approval, and supply a contact for bid questions.
• Bidders must represent that they conducted their own diligence and relied solely on their own investigation, that all financial-ability and adequate assurance information is true and correct, and that they are bound by the bid procedures.
• Joint bids may be approved by the debtors on a case-by-case basis.

Due Diligence

• Access to the confidential data room requires an executed confidentiality agreement in form and substance satisfactory to the debtors, or an existing agreement the debtors find acceptable, covering nondisclosure, prohibitions on contacting third parties about a sale transaction, non-solicitation of employees, prohibitions on acquiring the debtors' debt and equity securities, and survival of specified provisions, plus sufficient information for the debtors to conclude the bidder has a bona fide purpose and the financial and managerial wherewithal to submit a qualified bid and close. A bidder whose access ends must return or destroy the non-public information it received.
• FHGRF receives data room access and any information provided to a prospective bidder that it has not already received.
• The debtors may withhold competitively sensitive information from competitors and may limit or terminate access at any time, including where a prospective bidder fails to become a qualified bidder; a bidder denied access or that believes it has not been dealt with in accordance with the procedures may report the concern to the debtors, the committee and the U.S. Trustee for Region 2.
• The stalking horse bidder acknowledges it has completed all required diligence, subject to finalization of the APA schedules, and that the agreement carries no diligence, financing or investigation contingency. The sellers must deliver the disclosure schedules by the Sept. 29, 2026 schedule delivery date.

Bid Review and Auction Mechanics

• The debtors will notify bidders of qualification by Oct. 1, 2026, or as soon as practicable thereafter but before the auction, and will select the baseline bid at which bidding opens.
• The debtors may cure deficiencies in a bid, waive or amend qualification conditions, extend the bid deadline as to any party or asset, postpone or cancel the auction and terminate any proposed sale, and extend the outside closing date in consultation with the DIP lender. Nothing in the procedures may modify or extend the milestones under the DIP documents, and the debtors' determinations must be acceptable in form and substance to FHGRF in its capacity as DIP lender.
• Partial bids will be considered where, taken together and weighed against the execution risk of consummating several transactions, they are collectively higher and better than the best bid for all or substantially all assets.
• Bid evaluation criteria include purchase price, assets and liabilities included or excluded, net economic effect on the estates taking account of wind-down expenses, the DIP obligations and other outstanding debt, execution risk including financing contingencies and required governmental approvals, tax consequences, cure amounts, treatment of employees and the employee obligations assumed, and impact on trade creditors, licensees and clients.
• A separate set of criteria governs selection of the baseline bid and the successful bid and the value attributed to each new prevailing highest bid at the auction. In valuing successive bids, the debtors will give effect to additional assumed liabilities and whether they are secured, additional costs imposed on the estates, the provision of wind-down expenses, and whether a bid provides for indefeasible repayment in full in cash of the DIP obligations and prepetition secured obligations at closing.
• The debtors may reject any bid other than an FHGRF credit bid that requires bidder indemnification, arrives late, carries contingencies, seeks bid protections, lacks a fair and adequate purchase price, or whose acceptance would not be in the estates' best interests.
• Bidding proceeds in open rounds, with the debtors announcing the leading bid and its material terms between rounds and describing the value attributed to each new prevailing highest bid under the bid assessment criteria. Round-skipping is prohibited: a bidder that fails to top the immediately preceding bid in a round is disqualified from continuing. The auction closes only after every qualified bidder has had a reasonable opportunity to overbid the prevailing highest bid.
• Qualified bidders must notify the debtors in writing at least one day before the auction whether they intend to participate and must appear in person, or through a duly authorized representative with authority to bind, unless the auction is held by Zoom. Each must confirm on the record that it has not colluded and that its bids are binding, good-faith and bona fide offers. Creditors may attend with prior registration, and the U.S. Trustee may attend. Proceedings will be transcribed and/or video recorded.
• The debtors may relocate the auction or hold it remotely on not less than 24 hours' notice by docket filing and email to registered attendees, and may announce additional procedural rules at the auction, including time limits on subsequent bids, changes to the minimum overbid, or a requirement that parties submit best and final bids, provided the rules are disclosed to each qualified bidder and are acceptable to FHGRF for so long as it remains a consultation party.
• Acceptance of a successful bid occurs only upon court approval at the sale hearing; the debtors' presentation of a bid to the court is not acceptance.
• A qualified bidder may not modify, amend or withdraw its bid without the debtors' consent except to increase the purchase price or otherwise improve its terms.
• An auction is held only if the debtors receive more than one qualified bid for an asset or combination of assets; if they decide not to hold one, they will file and publish a cancellation notice identifying the successful bidder, attaching the bid or a summary of its material terms, and setting out the sale hearing details.
• The debtors may negotiate with any and all participating bidders outside the presence of the others before each round, and bidders may modify their purchase agreements at the auction to improve their bids.
• The notice of auction results, due Oct. 6, 2026, will identify each successful and backup bidder, attach each bid or a summary of its material terms including any contemplated contract assumptions, and, to the extent not otherwise disclosed, state the amount of each bid and the portion payable in cash or as a credit bid.

Backup Bid

• The debtors may designate a backup bidder immediately before the auction concludes and notify all qualified bidders of its identity, purchase price and material terms; the backup bidder must submit execution versions of its documentation within one business day of the auction's conclusion.
• The backup bid remains binding until the first business day after the closing of a sale transaction with the successful bidder.
• If the successful bidder's transaction is terminated before that expiration date, the debtors will file and serve a notice of intent to proceed with the backup bid naming the backup bidder and the proposed assignee entity for real property leases, and counterparties have two business days to object solely on adequate assurance of future performance, with an expedited hearing scheduled if objections are filed. Any approval of a backup bidder at the sale hearing is expressly subject to that objection right.
• If the stalking horse bidder is designated backup bidder, its deposit remains in escrow until the backup bid expiration date and is returned within five business days thereafter; if the sellers elect to proceed with its bid, closing must occur within 10 business days after the sellers' written notice.

Assumption and Assignment

• The assumption and assignment notice, identifying the contracts, the debtors' good faith estimate of cure amounts, and a statement that assumption and assignment is neither required nor guaranteed, will be filed no later than Sept. 18, 2026 and promptly served on the sale notice parties.
• Cure and non-identity assumption objections are due by the sale objection deadline; adequate assurance objections and objections based on the assignee's identity are due by the post-auction objection deadline. The debtors will serve all available adequate assurance information on counterparties by mail and email no later than Oct. 2, 2026.
• Failure to object by the sale objection deadline deems the counterparty to have consented and, absent written agreement between the counterparty and the successful bidder, fixes the noticed cure amount as the only amount required to cure defaults under section 365(b); failure to object by the post-auction deadline bars any objection to adequate assurance as of closing.
• Counterparties must treat adequate assurance information confidentially, may use it only to evaluate or object to adequate assurance, may share it only with representatives bound by the same restrictions, and must file any objection containing that information under seal subject to a motion to seal.
• The debtors and an objecting counterparty must confer in good faith; unresolved objections may, at the debtors' election, be adjourned to a later hearing on at least five days' notice and resolved after closing, provided resolution occurs before the section 365(d)(4) deadline. Upon resolution and payment of the cure amount, the contract is deemed assumed and assigned as of the closing date. If an adjourned objection resolves less favorably to the assignee than the noticed terms, the assignee may drop the contract, again subject to the section 365(d)(4) deadline, but no such decision reduces the purchase price or other consideration to the estates.
• Successful bidders may designate additional contracts for assumption and assignment or re-designate previously included contracts as excluded assets; the debtors will notice such designations and serve adequate assurance information, and counterparties then have 14 days to object. Cure amounts payable at closing remain subject to adjustment for post-petition obligations incurred and payments made in the ordinary course before closing.
• Under the stalking horse APA, the purchaser pays all cure costs as part of the total consideration and may remove any assigned agreement before closing without reducing the purchase price. For a contract whose cure amount remains disputed at closing, the purchaser must either exclude it or designate it as a designation rights asset. The purchaser may terminate and recover its deposit if an assumed real property lease cannot be assumed and assigned at closing for reasons not caused solely by the purchaser.
• The purchaser may, by notice at least five business days before closing, designate contracts as designation rights assets and defer its assumption decision through the transition outside date, 120 days after closing, capped for nonresidential real property leases at the section 365(d)(4) deadline as extended. The purchaser bears all costs of those contracts and related restaurants during the period; undesignated contracts become excluded assets, and the purchaser must remove its assets from the premises within 10 days.
• Nothing in the order modifies the debtors' section 365(d)(4) deadline, and listing a contract on a notice is neither a determination that it is executory or unexpired nor a guarantee that it will be assumed or assigned.
• 888 Seventh Avenue LLC, landlord under the Sept. 16, 1994 Brooklyn Diner lease with debtor Brooklyn Diner USA, L.P., issued a termination notice and asserts the lease was validly terminated under non-bankruptcy law and is not assumable under section 365. The debtors reserve their rights on the termination but have agreed that, absent the landlord's prior written consent or a further court order after notice and a hearing, the Brooklyn Diner lease is not subject to assumption and assignment.
• As soon as practicable after a closing the debtors will file, serve and publish a list of the contracts actually assumed and assigned, with the assignment effective date for each.

Liquor Licenses and Transition

• Where a liquor license cannot transfer notwithstanding the sale order, the purchaser selects, at its sole risk and cost and on a restaurant-by-restaurant basis, the transition method, which may include a transition services or interim management agreement with the sellers, designation rights, or obtaining its own licenses. The sellers make no representation as to the permissibility of any arrangement under the New York Alcoholic Beverage Control Law.
• Any transition agreement must terminate by the transition outside date, require the purchaser to carry liquor liability insurance naming the sellers as additional insureds, and place all liabilities during its term on the purchaser. The purchaser must deliver an initial draft at least two days before closing or is deemed to waive the agreement as a closing requirement. At the purchaser's request, the sellers will seek a sale order provision allowing the purchaser to continue alcohol sales on the sellers' terms until it obtains its own licenses.
• If the purchaser lacks liquor approvals and law prohibits a transition arrangement, the affected restaurant's contracts and assets become designation rights assets at closing. Closing and payment of the purchase price are not delayed or conditioned by any pending transition arrangement or licensing failure.
• From closing, the purchaser bears all costs of the restaurants and designation rights assets regardless of which entity is operator, employer or licensee of record, including rent, occupancy costs, payroll, insurance, sales taxes and license fees, and indemnifies the sellers and their estates; revenues of any location still operated by a seller are for the purchaser's account, with net settlement at least weekly.

Trademark Licenses

• At closing, the purchaser grants the IP Sellers three exclusive, royalty-free licenses for restaurants remaining with the estates: the "Cafe Fiorello" marks for the existing Washington, D.C. restaurant, limited to the D.C. metropolitan area; the "Brooklyn Diner" marks for the restaurant at 155 West 43rd Street, New York; and the "Brooklyn Deli" marks for the restaurant at 200 West 57th Street, New York, the latter two limited to the New York metropolitan area.
• Each license may be assigned once, without the purchaser's consent, to a purchaser of the relevant restaurant business in a sale through the bankruptcy cases, and expires on the earliest of any further transfer, 10 years after closing, or cessation of operations under the licensed name at that location. Each is subject to reasonable quality control standards set by the purchaser.
• Within 60 days after closing, the sellers must remove "Bond 45," "Café Fiorello" and "Trattoria Dell'Arte" from their corporate names, with a later deadline for any seller remaining licensee or operator of record during the transition period.

Employees

• The purchaser may, but is not required to, offer employment to employees at restaurants whose leases are assumed at closing, excluding scheduled excluded employees, on terms at its sole discretion, and must deliver its hiring list at least 10 calendar days before closing. It must use commercially reasonable efforts to hire enough employees on sufficient terms to avoid a WARN Act event, including under the New York WARN Act.
• The sellers pay pre-closing wages, benefits and payroll taxes for transferred employees and remain liable for pre-closing workers' compensation claims.

Other Stalking Horse APA Terms

• Closing must occur no later than Oct. 30, 2026, unless otherwise agreed. If closing occurs after that date, the purchaser is entitled to the restaurants' revenue from that date but must fund any shortfall in the sellers' costs of operating them.
• The sellers must use commercially reasonable efforts to hold the sale hearing by Oct. 21, 2026. The purchaser may terminate if the sale order is not entered by Oct. 24, 2026 or is reversed, vacated or modified in a manner not reasonably acceptable to it. Either party may terminate if closing does not occur within 60 days after entry of the sale order, within 10 business days after all conditions are satisfied, or by the outside date 90 days after the Sept. 22, 2026 execution date.
• Other termination rights include uncured material breach after a 10-business-day cure period, dismissal or conversion of the cases to Chapter 7 absent a trustee election to proceed within five business days, and aggregate uninsured casualty losses exceeding $500,000; otherwise the purchaser must close notwithstanding casualty and succeeds to insurance proceeds.
• The purchaser's closing conditions include accuracy of the sellers' representations, performance of covenants, delivery of schedules, absence of a material adverse effect, and entry of a sale order and assignment order not subject to a stay.
• Assets are sold as is, where is, with limited representations that do not survive closing except for fraud claims. The sellers represent, among other things, that renovation work required at the 1900 Broadway restaurant, involving at least $750,000 of expenditures, has been completed and paid for. Sellers' knowledge is that of Jordan Meyers, chief restructuring officer, and Ben Grossman, chief executive officer.
• Before closing, the purchaser's remedies are limited to return of the deposit, the bid protections and specific performance. After execution, the sellers may not issue gift cards, hire employees with annual compensation above $90,000, or amend, renew or terminate restaurant leases without the purchaser's consent.

Sale Free and Clear

• The debtors seek to sell the assets free and clear of all liens, claims, encumbrances and other interests under section 363(f); parties failing to file a timely sale or post-auction objection are barred from objecting and deemed to consent for section 363(f) purposes.
• At the sale hearing the debtors will seek an order approving the transactions, finding the successful and any backup bidder to be good faith purchasers under section 363(m), and, as appropriate, exempting the conveyances from transfer or stamp taxes and from any bulk sales deposit requirement.
• The stalking horse APA requires the sale order to include findings that the sale is free and clear of pre-closing sales and use tax liabilities, that the purchaser is not a successor to the sellers, that the consideration is reasonably equivalent value, and that the sale may not be avoided under section 363(n), along with waiver of the 14-day stays under Bankruptcy Rules 6004(h) and 6006(d).

Consultation Parties

• The consultation parties are the legal and financial advisors to any official committee appointed in these cases and FHGRF, though FHGRF ceases to be a consultation party if and when it submits a bid. The U.S. Trustee appointed an official committee of unsecured creditors on Aug. 27, 2026.
• The debtors will not share bids or other confidential information with any consultation party, insider or affiliate that is an active or prospective bidder for the relevant assets. A committee whose member submits a qualified bid retains its consultation rights provided it walls off the bidding member from deliberations and confidential information.
• Consultation rights do not limit the debtors' discretion and carry no veto over the debtors' business judgment, though the auction-closing provision states that the auction runs until one qualified bid is one the debtors and the consultation parties determine to be highest or best. After consulting the debtors, the committee may seek an expedited hearing to extend the bid deadline or auction date if the debtors decline to extend voluntarily.

Key Dates

• Sale Notice Filing and Service Deadline: within one business day after entry of the Sept. 4, 2026 bidding procedures order
• Assumption and Assignment Notice Deadline: Sept. 18, 2026
• Stalking Horse Motion Filed: Sept. 22, 2026
• Requested Stalking Horse Objection Deadline: Sept. 24, 2026, at 9 a.m. ET
• Requested Stalking Horse Hearing: Sept. 24, 2026, at 10:30 a.m. ET
• Stalking Horse APA Schedule Delivery Date: Sept. 29, 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
• Qualified Bidder Notification: Oct. 1, 2026, or as soon as practicable thereafter but before the auction
• Adequate Assurance Information Service Deadline: Oct. 2, 2026
• Auction (if necessary): Oct. 5, 2026, at 10 a.m. ET, at the offices of debtors' counsel in New York, subject to relocation or a remote format on not less than 24 hours' notice
• Notice of Auction Results: Oct. 6, 2026
• Post-Auction Objection Deadline: Oct. 9, 2026, at 12 p.m. ET
• Sale Hearing: Oct. 21, 2026, at 10 a.m. ET
• Stalking Horse Sale Order Termination Trigger: Oct. 24, 2026
• Outside Closing Date: Oct. 28, 2026, extendable by the debtors in consultation with the DIP lender
• Stalking Horse APA Closing Deadline: Oct. 30, 2026