Yardbird Group - Chapter 11 Bidding Procedures / APA Summary

Bidding Procedures / Asset Purchase Agreement Summary

Stalking Horse Bid

• Purchase price: a credit bid of all outstanding DIP and prepetition term loan obligations, plus the assumed liabilities and wind-down cash. It is the sum of:
  • A section 363(k) credit bid of all DIP obligations and prepetition facility obligations outstanding at closing, excluding indemnities, expenses and agency fees. Brightwood Loan Services LLC makes the bid as agent for the DIP lenders and prepetition lenders under an irrevocable direction letter. The bid is applied first to the DIP obligations until they are paid in full, then to the prepetition obligations;
  • The assumption of the assumed liabilities; and
  • The excluded cash. This is cash on hand and DIP draws equal to the $250,000 wind-down amount, plus enough to pay ordinary-course postpetition administrative expenses that are in the DIP budget, accrued but unpaid at closing, and not otherwise assumed or covered by the wind-down amount or budget.
• The APA defines the prepetition obligations as an initial term loan with $11.2 million of principal outstanding and delayed-draw term loans with $2.1 million of principal outstanding. Each also carries accrued and unpaid interest, fees and other amounts. Both arise under Yardbird Group LLC's July 28, 2022 credit and guaranty agreement, with Brightwood as administrative and collateral agent, as amended April 19, 2024, and Nov. 14, 2025.
• Restaurant operator Yardbird Group LLC and its affiliates filed Chapter 11 in Delaware on Sept. 20, 2026, the same date as the APA, and moved for bidding procedures the next day. The court entered the bidding procedures order on Oct. 10, 2026, approving the APA as the stalking horse agreement and as the form against which competing bids are compared, and found that the stalking horse bid was the highest or best offer the debtors had received to date and set a floor for further marketing.
• Wind-down funding: the $250,000 wind-down amount is paid into the account holding the excluded cash at closing or, if later, once the parties agree a wind-down budget. At least 10 business days before the sale hearing, the sellers must give the DIP lenders a wind-down budget that includes professional fees and does not exceed the wind-down amount. The deadline moves earlier if a revised budget is delivered in connection with a second DIP draw. Excluded cash left after administrative and wind-down expenses are paid (the DIP reversionary interest) is carved out of the excluded assets.
• Deposit: none. The stalking horse bid is exempt from the deposit requirement, and the APA treats the buyer's credit bid commitment as adequate assurance of performance and as consideration in place of a cash deposit.
• The stalking horse is deemed a qualified bidder and its bid a qualified bid, and later changes to the procedures cannot remove that status without a court order. If no other qualified bid arrives, the stalking horse is the successful bidder and no auction is held.

Parties

• Buyer: SH Acquisition LLC, a Delaware entity owned by and formed at the direction of the DIP secured parties, which are also the prepetition secured parties. Its sole member is Brightwood Loan Services LLC, the administrative and collateral agent under both the DIP facility and the prepetition credit agreement. The APA describes the buyer as an affiliate of the DIP lenders formed to help with the credit bid. The court found that the buyer is not an insider or affiliate of the debtors and acted in good faith under section 363(m) in negotiating the procedures and the APA.
• Sellers: Yardbird Group LLC, Yardbird Beverly Hills, LLC, Yardbird DFW, LLC, Yardbird DC, LLC, Yardbird Chicago, LLC, Yardbird Denver LLC, YB Las Vegas, LLC, Yardbird DFW Management LLC, Yardbird DFW Concession LLC and The Bird Singapore LLC. Debtor Southern Operations, LLC is not a party to the APA.
• Debtors' team: Albert Altro of Traverse LLC, the chief restructuring officer, signed the APA. Soravine Advisors LLC (Vineet Batra) handles diligence and bid submissions, and Potter Anderson & Corroon LLP is proposed counsel. Winston Taylor LLP and Cole Schotz represent the DIP secured parties, the prepetition secured parties and the stalking horse.
• Consultation parties: any official committee and, only while they are not bidding, the DIP secured parties. A consultation party that bids loses its rights until it withdraws, though the committee keeps its rights when one of its members bids so long as that member is excluded from deliberations and confidential information; consultation rights carry no veto, and the debtors may not change them without a court order or the affected party's consent.

Bid Protections

• Expense reimbursement: up to $175,000 under the bidding procedures order. The entered order added this cap, which was not in the form of order attached to the APA. It also gives the reimbursement administrative priority and provides that it survives termination of the APA. The APA itself allows up to $275,000 of reasonable and documented out-of-pocket costs.
• Under the APA, the reimbursement is payable on termination for any of these reasons: failure to close by the outside date, a final legal restraint, the buyer's exercise of its termination rights, or court approval of an alternative restructuring proposal. An alternative restructuring proposal is any sale, financing, restructuring, plan, liquidation or similar transaction that is inconsistent with, or an alternative to, the APA transaction. The sale notice instead describes the reimbursement as payable if the stalking horse is not the successful bidder.
• Payment needs no further order. The stalking horse must first send expense documentation, without time entries, to debtors' counsel and the U.S. Trustee, which then have five days to object.
• Break-up fee: none. No bidder other than the stalking horse is entitled to a break-up fee, expense reimbursement or any other bid protection.
• Any later stalking horse bid at the auction is valued at its face amount plus the expense reimbursement.

Minimum Bid and Overbid

• Minimum bid: the value of the stalking horse bid plus $200,000 plus the expense reimbursement.
• Most significantly, every competing bid must provide enough consideration to repay in full in cash all DIP facility obligations and all Brightwood prepetition obligations that the stalking horse credit bids. The debtors may assign value to non-cash components only if that payment requirement is met.
• Initial overbid: the baseline bid plus $200,000, plus the expense reimbursement if the stalking horse bid is the baseline bid.
• Subsequent bids: each must exceed the prior round's leading bid. The debtors may raise or lower the minimum overbid at any time during the auction.
• Partial bids are allowed. To form a qualified bid, they may be combined with other partial bids or with the debtors' good-faith liquidation value for assets nobody bid on.

Credit Bidding

• The stalking horse may credit bid all or any portion of its DIP facility and Brightwood prepetition obligations. This includes later bids at the auction, regardless of any earlier or lower credit bid. The procedures call this right absolute and unconditional, but the order makes it subject in all respects to the challenge period under the interim DIP order or, once entered, the final DIP order.
• Any qualified bidder with a valid, perfected lien may credit bid up to its claims, but only against its own collateral. This applies whether or not its liens are still subject to the DIP order challenge period. Credit bids count at full face value as the equivalent of cash, and no party may seek to limit the DIP secured parties' credit bid rights.
• The DIP and prepetition secured parties are automatically qualified bidders and their credit bids are qualified bids. A credit bid cannot be chosen as the backup bid.
• Under the APA, the buyer's obligation to close, which the buyer may waive, is conditioned on all of the following:
  • court authorization of the credit bid at no less than the full credit bid amount;
  • no action challenging the lenders' right to credit bid; and
  • expiry of the DIP order challenge period with no challenge asserted against the DIP lenders, the prepetition lenders or the prepetition senior secured parties.
• The buyer may terminate if it cannot credit bid up to the full DIP and prepetition obligations.
• The order does not modify the DIP orders, which control if the two are inconsistent.

Good Faith Deposit

• Deposit: 10% of the proposed purchase price, in cash, due by the Oct. 27, 2026, 4 p.m. ET bid deadline and held by an escrow agent the debtors select. The stalking horse is exempt.
• Bidders that fail to qualify get their deposits back within five business days after the debtors decide who qualifies. Other losing qualified bidders get theirs back within 10 business days after the auction. The backup bidder's deposit is returned within 10 business days after the backup bid expires.
• The successful bidder's deposit is credited against the purchase price.
• A deposit is forfeited if a qualified bidder tries to withdraw an irrevocable bid, or if the successful or backup bidder fails to close because of a breach that lets the debtors terminate. In either case the debtors keep the deposit as partial compensation for damages.

Bid Requirements

• To access the data room, a prospective bidder must first give Soravine identifying documentation, an executed confidentiality agreement, a statement of bona fide interest and preliminary proof of financial capacity. Competitors may be denied competitively sensitive information.
• A qualified bid must, among other things:
  • Disclose everyone bidding for, sponsoring, financing or participating in the bid, whether the bidder is an insider, and any connections with the stalking horse, other bidders or the DIP secured parties;
  • Identify the assets and contracts to be acquired and any liabilities, including debt, to be assumed;
  • Be all cash, or include an analysis of the value of any non-cash consideration;
  • Include an executed purchase agreement marked against the stalking horse APA, and a proposed sale order marked against the debtors' form;
  • Show financial wherewithal and include adequate assurance information, such as an organizational chart, financial statements, tax returns, annual reports and the planned use of leased premises, in a form that can be shared immediately with counterparties;
  • Acknowledge an as-is, where-is sale with limited representations and no indemnification, and include board or equity holder authorization;
  • Agree to serve as backup bidder, and stay irrevocable until the successful bid is selected or, if chosen as the successful or backup bid, until the backup bid expires;
  • Waive any bid protection and any substantial contribution claim under section 503(b);
  • Have no financing or due diligence contingencies;
  • State whether the bidder intends to offer jobs to any of the debtors' employees and, if so, to whom; and
  • Certify that the bidder has not colluded and is not a joint venture of multiple bidders, unless the debtors consent in writing.
• The debtors may negotiate with bidders to fix deficiencies and, after consultation, may amend or waive the qualification conditions.
• In weighing bids, the debtors may consider price and form of consideration, net economic effect on the estates, execution risk, and the impact on employees, trade creditors and landlords.

Auction and Backup Bid

• Auction: Nov. 2, 2026, at 10 a.m. ET, at Potter Anderson & Corroon LLP's Wilmington offices, another location, or virtually. It is held only if the debtors receive more than one qualified bid, counting combined partial bids; if the stalking horse bid is the only qualified bid, the auction is canceled and the debtors seek approval of the stalking horse bid at the sale hearing.
• By Oct. 30, 2026, at 5 p.m. ET, the debtors will name the baseline bid and send all qualified bids to the qualified bidders.
• Bidding is open and transcribed or video recorded, and the debtors announce a leading bid after each round. Each participant must confirm in writing and on the record that it has not colluded and that its bids are binding.
• Backup bid: binding until the earlier of the first business day after closing with the successful bidder and 30 days after the sale hearing. If the successful bidder's sale is terminated before then, the backup bidder becomes the successful bidder and must close, though the debtors may decide not to pursue the backup bid. If the successful bidder fails to close because of its own breach or failure, the order lets the debtors close with the backup bidder without a further court order.
• After consultation, the debtors may modify the procedures, including extending or waiving deadlines and adopting new auction rules disclosed to bidders. They may also adjourn or cancel the auction or adjourn the sale hearing. These rights are subject to the DIP orders and the stalking horse APA.
• The debtors are bound to a successful bid only once the court approves it at the sale hearing. That hearing is evidentiary unless the court orders otherwise, and no further bidding takes place there.

Key Dates

• Petition date and APA date: Sept. 20, 2026
• Bidding procedures order entered: Oct. 10, 2026
• Sale notice, assumption and assignment notice, and schedules to the stalking horse APA due: Oct. 15, 2026
• Cure and contract objection deadline: Oct. 26, 2026, at 4 p.m. ET under the order's contract objection paragraph and the APA. The order's sale timeline instead lists Oct. 29, 2026, at 4 p.m. ET.
• Bid deadline and deposit deadline: Oct. 27, 2026, at 4 p.m. ET
• Sale objection deadline: Oct. 29, 2026, at 4 p.m. ET
• Baseline bid notice: Oct. 30, 2026, at 5 p.m. ET
• Auction (if necessary): Nov. 2, 2026, at 10 a.m. ET
• Notice of auction results: within one business day after the auction ends
• Supplemental sale objection deadline: Nov. 4, 2026, at 4 p.m. ET. These objections are limited to the conduct of the auction and to a successful or backup bidder other than the stalking horse.
• Adequate assurance objection deadline: the order's timeline lists Nov. 4, 2026, but its adequate assurance paragraph allows these objections up to and at the sale hearing.
• Reply deadline: Nov. 5, 2026, at 12 p.m. ET
• Sale hearing: Nov. 9, 2026, at 10 a.m. ET
• Sale order target and APA outside date: Nov. 12, 2026

Assets Being Sold

• The stalking horse bid covers substantially all of the debtors' assets. As the APA defines it, the business is the operation of Yardbird restaurants in Dallas, Chicago and Washington, D.C., plus two licensed locations in Las Vegas and Singapore. The sellers own no real property.
• Acquired assets include all of the sellers' assets other than the excluded assets, including:
  • cash other than the excluded cash;
  • receivables;
  • bank accounts, other than those holding the excluded cash, professional fee funds or utility reserves;
  • deposits and prepaid items;
  • assigned contracts and scheduled leased real property;
  • inventory and equipment;
  • transferable permits;
  • books and records;
  • owned intellectual property;
  • assumed benefit plans;
  • insurance policies and proceeds; and
  • general intangibles.
• The buyer also acquires all of the sellers' claims and causes of action and their proceeds. This includes avoidance actions under the Bankruptcy Code, among them sections 544, 547 and 548, and state-law equivalents. It also includes claims against current and former officers, directors, employees, members and representatives. The sellers' director and officer and fiduciary insurance policies stay with the sellers as excluded assets.
• Liquor licenses are delivered at closing. Any that cannot be transferred are covered by a transition services agreement that allows the buyer to use them after closing.
• Excluded assets include:
  • the sellers' equity;
  • the excluded cash and professional fee retainers and escrows, in each case except to the extent of the DIP reversionary interest;
  • contracts that are not assigned;
  • retained benefit plans;
  • certain books and records, including privileged materials;
  • the director and officer and fiduciary insurance policies;
  • claims relating to excluded assets or liabilities; and
  • the sellers' rights under the APA.
• Until closing, the buyer may designate additional assets or liabilities to acquire, assume or exclude. It cannot take the sellers' equity, excluded cash, professional fee funds, certain books and records, claims relating to excluded assets or liabilities, the director and officer policies or the sellers' APA rights without the sellers' consent.

Assumed and Excluded Liabilities

• Assumed liabilities consist only of:
  • Post-closing obligations under assigned contracts, excluding pre-closing breaches other than cure costs within the cure cap;
  • Liabilities from the buyer's operation of the business after closing;
  • Post-closing liabilities relating to transferred employees, and liabilities under assumed benefit plans other than pre-closing COBRA notice obligations;
  • Accrued and unpaid paid time off for transferred employees;
  • Ordinary-course postpetition administrative expenses that are in the DIP budget, accrued but unpaid at closing, and not covered by the wind-down amount or budget;
  • Cure costs for assigned contracts up to the cure cap;
  • Scheduled liabilities; and
  • Expenses under the transition services agreement.
• All other liabilities are excluded, including:
  • administrative and priority claims not expressly assumed;
  • all indebtedness, including the DIP facility and the prepetition facilities;
  • excluded taxes;
  • pre-closing employment, WARN Act and collective bargaining liabilities;
  • rejection damages claims;
  • pre-closing tort and environmental liabilities;
  • indemnification claims;
  • liabilities to equity holders, noteholders and lenders;
  • accounts payable other than the assumed postpetition expenses;
  • fees of the sellers' professionals; and
  • cure costs above the cure cap.

Executory Contracts and Cure Costs

• Cure cap: an amount to be agreed by the buyer and the sellers, reduced by any cure-type payments the sellers make during the case. The buyer pays cure costs only up to the cap, with any excess an excluded liability, and aggregate cure costs at or below the cap is a condition to the buyer's obligation to close; on any omitted contract the buyer later designates for assumption, however, it pays all cure costs.
• The assumption and assignment notice, with the debtors' cure schedule, is due Oct. 15, 2026. Supplemental notices that add or remove contracts or change cure amounts give counterparties seven days to object.
• The buyer may designate contracts and benefit plans for assumption or exclusion without changing the purchase price. Under the order the deadline is two business days before closing; the APA says two days. Contracts not designated are automatically excluded, and the buyer bears no cure costs for them.
• For contracts with unresolved cure or assignment disputes, the designation deadline is extended for as long as the buyer pays ordinary-course costs under the contract. The extension runs to the earliest of: resolution of the dispute, 60 days after closing, the date the contract can no longer be assumed or is deemed rejected, and any date set in the sale order.
• Until that extended period ends, the sellers may not reject any business contract, or amend it or compromise its cure amount, without the buyer's consent.
• Counterparties that do not object in time are deemed to consent and are bound by the noticed cure amounts, though they may still seek amounts for defaults arising between service of the assumption notice and closing; the stalking horse is deemed to have provided adequate assurance of future performance. Adequate assurance objections may be raised only against a successful bidder other than the stalking horse.
• Unresolved cure objections may be adjourned past closing. The contract can still be assigned if the undisputed amount is paid and the disputed portion is reserved.

Employees and Transition Services

• The buyer may offer jobs to some, all or none of the employees, on terms in its sole discretion. Employment agreements with individuals the buyer and sellers agree on are closing deliverables.
• The buyer assumes accrued, unpaid paid time off for transferred employees. If law requires a payout to employees terminated because of the buyer's action or inaction, and nonpayment could expose the sellers' directors or officers to personal liability, the excluded cash is increased, or funded at closing, to cover the payout.
• The sellers keep pre-closing employment, WARN Act and COBRA liabilities. The order does not authorize any payment that implicates section 503(c), including bonus, severance or retention payments to insiders.
• Transition services: if the buyer asks, the sellers provide up to 60 days of post-closing services funded by the buyer, including payroll, benefits administration, accounting, IT and facilities management.

Closing Conditions

• Closing takes place remotely no later than the second business day after the conditions are satisfied or waived.
• Conditions for both sides:
  • no legal restraint and no pending action seeking one;
  • expiry of any HSR Act or other antitrust waiting period; and
  • entry of the bidding procedures order and the sale order as final orders reasonably acceptable to the buyer and the required DIP lenders.
• The buyer's obligation to close also depends on:
  • Accurate seller representations, generally measured against a material adverse effect standard, with fundamental representations true in all but de minimis respects, and material performance of the sellers' covenants;
  • No material adverse effect since signing;
  • Aggregate cure costs not exceeding the cure cap;
  • No unwaived event of default under the DIP facility or DIP order;
  • The credit bid approvals and the unchallenged expiry of the DIP order challenge period described above;
  • No pending or threatened action relating to any pre-closing transaction; and
  • Final seller disclosure schedules delivered by Oct. 4, 2026, or a later date the buyer accepts. The schedules must satisfy the buyer in its sole discretion and are deemed final unless the buyer rejects them by Nov. 12, 2026.
• The sellers' obligation to close depends on the buyer's representations being true except where the failure would not have a material adverse effect on its ability to close, the buyer's material performance of its covenants, and delivery of the buyer's closing documents.

Termination and Remedies

• Outside date: Nov. 12, 2026, which the buyer may extend in its sole discretion.
• The APA terminates automatically if the buyer is neither the successful bidder nor the backup bidder. It may also be terminated:
  • by mutual consent;
  • by either party at the outside date or on a final, non-appealable legal restraint, unless that party's own breach caused the failure to close or the restraint; or
  • by either party on court approval of an alternative restructuring proposal, although the sellers may use this right only if they have complied with their notice covenants.
• Each side may terminate for the other's uncured breach. The cure period runs to the earlier of the outside date and 20 business days after notice.
• The buyer may also terminate on:
  • Conversion to Chapter 7, appointment of a trustee or of an examiner with expanded powers, or stay relief covering any material part of the acquired assets;
  • A continuing DIP event of default, or any material change, reversal, stay or vacatur of the DIP order or DIP facility without its consent;
  • Being unable to credit bid up to the full DIP and prepetition obligations;
  • Any change, reversal, stay or vacatur of the bidding procedures order or sale order without its consent;
  • Failure to enter the bidding procedures order within 18 days after the petition date, or the sale order within 50 days after it; or
  • The sellers' failure to deliver final disclosure schedules by the delivery date, or the buyer's rejection of those schedules by Nov. 12, 2026.
• Both the buyer and the sellers may obtain specific performance and injunctive relief without posting a bond; seeking specific performance does not bar the sellers from also collecting damages, but specific performance can never be used to force the sellers to cure a breach of their representations. Representations and pre-closing covenants do not survive closing, termination does not release either party from liability for fraud or willful and material breach, and claims may be brought only against the parties to the APA.

Fiduciary Out

• Under the order, nothing in the order or the procedures stops the debtors from pursuing or completing an alternative transaction in the exercise of their fiduciary duties. The APA does not require the sellers' directors or officers to act against their fiduciary duties.
• The sellers may solicit alternative restructuring proposals. They must tell the buyer within 48 hours about any proposal that may lead to one, keep the buyer informed of its status and terms, and give the buyer copies of material documents.

Sale Free and Clear

• Under the APA, the acquired assets transfer free and clear of liens, claims and interests other than permitted liens and the assumed liabilities; the sale motion, as recited in the sale notice, asks that liens attach to the sale proceeds. Permitted liens include validly perfected, enforceable and non-avoidable liens existing on the petition date and liens under the DIP facility, along with ordinary-course categories such as title-retention arrangements, liens on financed insurance proceeds, and statutory and deposit liens.
• The sale order must find that the buyer is a good-faith purchaser under section 363(m) and not a successor to the sellers. Bulk sales laws are waived.
• Parties that do not object in time are deemed to consent to the free-and-clear sale under section 363(f).

Other APA Terms

• Without consent, the buyer may assign its rights, including the right to acquire any of the acquired assets, to its affiliates or to anyone the required DIP lenders designate. The buyer remains liable for its obligations.
• The buyer prepares a purchase price allocation within 90 days after closing. It may also choose to structure the transaction as a reorganization under section 368(a) of the Internal Revenue Code, with the sellers' cooperation. The sellers pay all transfer taxes.
• After closing, the sellers must change their names and stop using the Yardbird name. Any plan they file may not conflict with the APA. The buyer must give the sellers reasonable access to records and personnel for the wind-down.