20-10161-jlg doc 709 filed 08/26/20 entered 08/26/20 22:44 ...20-10161-jlg doc 709 filed 08/26/20...

Presentment Date and Time: September 3, 2020 at 4:00 p.m. (Eastern Time) Objection Date and Time: September 2, 2020 at 4:00 p.m. (Eastern Time)

Hearing Date and Time (Only if Objections Filed): To Be Announced

WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, New York 10153 Telephone: (212) 310-8000 Facsimile: (212) 310-8007 Ray C. Schrock, P.C. Sunny Singh Attorneys for Debtors and Debtors in Possession UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK ----------------------------------------------------------------x In re : : Chapter 11 FAIRWAY GROUP HOLDINGS CORP., et al., : : Case No. 20-10161 (JLG) : Debtors.1 : (Jointly Administered) ----------------------------------------------------------------x

NOTICE OF PRESENTMENT OF APPLICATION OF DEBTORS FOR AUTHORIZATION TO RETAIN

AND EMPLOY GRANT THORNTON LLP AS ADVISORS FOR THE DEBTORS NUNC PRO TUNC TO THE COMMENCEMENT DATE

PLEASE TAKE NOTICE that Fairway Group Holdings Corp. and its debtor

affiliates, as debtors and debtors in possession in the above-captioned chapter 11 cases

(collectively, the “Debtors”), will present the annexed application (the “Application”)2 for entry

1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, are as follows: Fairway Group Holdings Corp. (2788); Fairway Group Acquisition Company (2860); Fairway Bakery LLC (4129); Fairway Broadway LLC (8591); Fairway Chelsea LLC (0288); Fairway Construction Group, LLC (2741); Fairway Douglaston LLC (2650); Fairway East 86th Street LLC (3822); Fairway eCommerce LLC (3081); Fairway Georgetowne LLC (9609); Fairway Greenwich Street LLC (6422); Fairway Group Central Services LLC (7843); Fairway Group Plainview LLC (8643); Fairway Hudson Yards LLC (9331); Fairway Kips Bay LLC (0791); FN Store LLC (9240); Fairway Paramus LLC (3338); Fairway Pelham LLC (3119); Fairway Pelham Wines & Spirits LLC (3141); Fairway Red Hook LLC (8813); Fairway Stamford LLC (0738); Fairway Stamford Wines & Spirits LLC (3021); Fairway Staten Island LLC (1732); Fairway Uptown LLC (8719); Fairway Westbury LLC (6240); and Fairway Woodland Park LLC (9544). The location of the Debtors’ corporate headquarters is 2284 12th Avenue, New York, New York 10027. Fairway Community Foundation Inc., a charitable organization, owned by Fairway Group Holdings Corp., is not a debtor in these proceedings.

2 Capitalized terms used but not defined herein shall have the respective meanings ascribed to such terms in the Application.

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of an order pursuant to section 327(a) of the Bankruptcy Code, Rules 2014(a) and 2016 of the

Federal Rules of Bankruptcy Procedure, and Local Bankruptcy Rules for the Southern District of

New York 2014-1 and 2016-1 for authority to retain and employ Grant Thornton LLP as attorneys

for the Debtors, nunc pro tunc to the Commencement Date, all as more fully set forth in the

Application, to the Honorable James L. Garrity, Jr., United States Bankruptcy Judge, for signature

on September 3, 2020 at 4:00 p.m. (Eastern Time).

PLEASE TAKE FURTHER NOTICE that any responses or objections (the

“Objections”) to the Application shall be in writing, shall conform to the Federal Rules of

Bankruptcy Procedure (the “Bankruptcy Rules”) and the Local Bankruptcy Rules for the

Southern District of New York (the “Local Rules”), shall be filed with the Bankruptcy Court (i) by

attorneys practicing in the Bankruptcy Court, including attorneys admitted pro hac vice,

electronically in accordance with General Order M-399 (which can be found at

www.nysb.uscourts.gov), and (ii) by all other parties in interest, on a CD-ROM, in text-searchable

portable document format (PDF) (with two single-sided hard copies delivered to the Judge’s

Chambers), in accordance with the Order Implementing Certain Notice and Case Management

Procedures (ECF No. 201), so as to be filed and served upon (a) the attorneys for the Debtors,

Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York 10153 (Attn: Ray C.

Schrock, P.C. and Sunny Singh, Esq.); (b) the Office of the United States Trustee for Region 2,

201 Varick Street, Suite 1006, New York, NY 10014 (Attn: Greg Zipes, Esq. and Paul

Schwartzberg, Esq.); (c) the attorneys for the Creditors’ Committee; and (d) counsel to the Ad Hoc

Group and DIP Lenders, King & Spalding LLP, 1185 Avenue of the Americas, New York, NY

10036 (Attn: W. Austin Jowers, Esq., Michael Rupe, Esq., and Michael R. Handler, Esq.) no later

than September 2, 2020 at 4:00 p.m. (Eastern Time) (the “Objection Deadline”).


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PLEASE TAKE FURTHER NOTICE that if no Objections are timely filed and

served with respect to the above referenced Application, the Debtors may, on or after the Objection

Deadline, submit to the Bankruptcy Court an order substantially in the form of the proposed order

annexed to the Application, which order may be entered without further notice or opportunity to

be heard.

PLEASE TAKE FURTHER NOTICE that any objecting parties are required to

attend the Hearing, and failure to appear may result in relief being granted upon default.

Dated: August 26, 2020 New York, New York

/s/ Sunny Singh WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, New York 10153 Telephone: (212) 310-8000 Facsimile: (212) 310-8007 Ray C. Schrock, P.C. Sunny Singh Attorneys for Debtors and Debtors in Possession


Presentment Date and Time: September 3, 2020 at 4:00 p.m. (Eastern Time) Objection Date and Time: September 2, 2020 at 4:00 p.m. (Eastern Time)

Hearing Date and Time (Only if Objections Filed): To Be Announced

WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, New York 10153 Telephone: (212) 310-8000 Facsimile: (212) 310-8007 Ray C. Schrock, P.C. Sunny Singh Attorneys for Debtors and Debtors in Possession UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK ----------------------------------------------------------------x In re : : Chapter 11 FAIRWAY GROUP HOLDINGS CORP., et al., : : Case No. 20-10161 (JLG) : Debtors.1 : (Jointly Administered) ----------------------------------------------------------------x

APPLICATION OF DEBTORS FOR AUTHORIZATION TO RETAIN AND EMPLOY GRANT THORNTON LLP AS ADVISORS

FOR THE DEBTORS NUNC PRO TUNC TO THE COMMENCEMENT DATE

TO THE HONORABLE JAMES L. GARRITY, JR. UNITED STATES BANKRUPTCY JUDGE:



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Fairway Group Holdings Corp. and its debtor affiliates, as debtors and debtors in

possession in the above-captioned chapter 11 cases (collectively, the “Debtors”), respectfully

represent as follows in support of this application (the “Application”):

Background

1. On January 23, 2020 (the “Commencement Date”), the Debtors each

commenced a voluntary case under chapter 11 of title 11 of the United States Code (the

“Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New

York (the “Court”). The Debtors are authorized to continue to operate their business and manage

their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy

Code.

2. On February 4, 2020, the United States Trustee for Region 2 appointed an

official committee of unsecured creditors in these chapter 11 cases (the “Creditors’ Committee”).

See ECF No. 105. No trustee or examiner has been appointed in these chapter 11 cases.

3. The Debtors’ chapter 11 cases are being jointly administered for procedural

purposes only pursuant to Rule 1015(b) of the Federal Rules of Bankruptcy Procedure (the

“Bankruptcy Rules”).

4. The Debtors commenced these chapter 11 cases with the support of an ad

hoc group of Prepetition Lenders (the “Ad Hoc Group”) holding over 91% of all outstanding

obligations of the Debtors under the Prepetition Credit Agreement (and in excess of 66.67% of

each tranche of debt thereunder). On January 22, 2020, the Debtors executed a restructuring

support agreement with members of the Ad Hoc Group, pursuant to which the members of the Ad

Hoc Group agreed to support a chapter 11 plan. The Ad Hoc Group also supports the Debtors’

marketing and sale process for all or substantially all of their assets, and has committed to provide


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the Debtors with up to $25 million of debtor-in-possession financing to finance these chapter 11

cases and the sale process.

5. On July 3, 2020, the Debtors filed the Joint Chapter 11 Plan of Fairway

Group Holdings Corp. and Its Affiliated Debtors (ECF No. 537) and Disclosure Statement for

Joint Chapter 11 Plan of Fairway Group Holdings Corp. and Its Affiliated Debtors (ECF No.

538). On August 14, 2020, the Bankruptcy Court entered the Order (I) Approving Disclosure

Statement; (II) Establishing Notice and Objection Procedures for Confirmation of the Plan;

(III) Approving Solicitation Packages and Procedures for Distribution Thereof; (IV) Approving

the Forms of Ballots and Establishing Procedures for Voting on the Plan; and (V) Granting

Related Relief (ECF No. 686).

6. Information regarding the Debtors’ business, capital structure, and the

circumstances leading to the commencement of these chapter 11 cases is set forth in the

declarations of Michael Nowlan and Abel Porter pursuant to Rule 1007-2 of the Local Bankruptcy

Rules for the Southern District of New York, each sworn and filed on the Commencement Date

(ECF Nos. 5 & 25) (together, the “First Day Declarations”).2

Jurisdiction

7. The Court has jurisdiction to consider this matter pursuant to 28 U.S.C.

§§ 157 and 1334 and the Amended Standing Order of Reference M-431, dated January 31, 2012

(Preska, C.J.). This is a core proceeding pursuant to 28 U.S.C. § 157(b). Venue is proper before

the Court pursuant to 28 U.S.C. §§ 1408 and 1409.

2 Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in the First Day Declarations.


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Relief Requested

8. By this Application, pursuant to section 327(a) of the Bankruptcy Code,

Rules 2014(a) and 2016 of the Bankruptcy Rules, and Rules 2014-1 and 2016-1 of the Local

Bankruptcy Rules for the Southern District of New York (the “Local Rules”), the Debtors seek

(a) authority to retain and employ Grant Thornton LLP (“Grant Thornton”), as tax advisors for

the Debtors, effective nunc pro tunc to the Commencement Date, in accordance with the terms and

conditions set forth in that certain engagement letter dated September 22, 2016, that certain

statement of work dated as of January 16, 2020, that certain first addendum to such statement of

work, dated as of May 20, 2020, and that certain second addendum to such statement of work,

dated as of June 17, 2020 (collectively, the “Statements of Work”); (b) approving the terms set

forth in the Statements of Work; and (c) granting related relief.

9. A proposed form of order approving the retention and employment of Grant

Thornton is annexed hereto as Exhibit A (the “Proposed Order”). In support of this Application,

the Debtors submit the declaration of Barry G. Grandon, annexed hereto as Exhibit B

(the “Grandon Declaration”). Copies of the Statements of Work are annexed hereto as

Exhibit C.

Grant Thornton’s Qualifications

10. Grant Thornton is the U.S. member firm of Grant Thornton International

Ltd., a global audit, tax, and advisory organization of separate, independent network firms

providing services in more than 130 countries, with more than 50 offices in the United States. The

professionals in Grant Thornton’s audit and tax advisory practices consist of senior tax,

accounting, and other professionals specializing in providing tax, financial, business, and strategic

advice to enterprises, including distressed enterprises. Grant Thornton has significant


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qualifications, experience, and extensive knowledge in the fields of accounting and taxation for

large, sophisticated companies, both in and outside of chapter 11.

11. Grant Thornton has provided tax advisory services in numerous large

chapter 11 cases, including, among others, In re Fusion Connect Inc., No. 19-11811 (SMB)

(Bankr. S.D.N.Y. Nov. 13, 2017); In re Claire’s Stores Inc., No. 18-10584 (MFW) (Bankr. D. Del.

May 8, 2018); In re RFID Corporation f/k/a/ Angelica Corp., Case No. 17-10870 (JLG) (Bankr.

S.D.N.Y. Nov. 13, 2017); In re Avaya Inc., No 17-10089 (SMB) (Bankr. S.D.N.Y Mar. 28, 2017);

In re Samson Resources Corporation, No. 15-11934 (CSS) (Bankr. D. Del. Dec. 8, 2015); In re

ATLS Acquisition, LLC, No. 13-10262 (PJW) (Bankr. D. Del. Apr. 19, 2013); In re AMR Corp.,

No. 11-15463 (SHL) (Bankr. S.D.N.Y Oct. 9, 2012); In re Northstar Aerospace (USA) Inc., No.

12-11817 (MFW) (Bankr. D. Del. Sept. 6, 2012); In re W.R. Grace & Co., No. 01-01139 (JKF)

(Bankr. D. Del. Aug. 14, 2012); In re Tronox Inc., No. 09-10156 (ALG) (Bankr. S.D.N.Y. July

21, 2010); In re Washington Mutual No. 08-12229 (MFW) (Bankr. D. Del. Jan. 29, 2009).

12. Accordingly, the Debtors believe Grant Thornton has the resources and

experience necessary to provide tax advisory services in these chapter 11 cases.

Services Provided by Grant Thornton

13. Subject to further order of the Court, and in accordance with the Statements

of Work and the Grandon Declaration, Grant Thornton will provide certain tax advisory services

as Grant Thornton and the Debtors shall deem appropriate and feasible in order to advise the

Debtors in the course of these cases.

14. As set forth in more detail in the Statements of Work, the Debtors seek to

retain Grant Thornton to provide advisory services relating to the tax implications of potential

bankruptcy scenarios, including the sales of certain assets and the liquidation of or bankruptcy


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reorganization around certain assets under sections 382(l)(5) and (6) of the Bankruptcy Code,

advise the Debtors with respect to issues and alternative scenarios relating to cancellation of debt

income, tax attribute modeling, attribute reduction, consolidated tax return regulation impact, and

other relevant tax considerations and assumptions (collectively, the “Services”).

Professional Compensation

15. As set forth in the Grandon Declaration, the Debtors understand and have

agreed that Grant Thornton will apply to the Court for allowances of compensation and

reimbursement of expenses in accordance with General Order M-412 (Order Establishing

Procedures for Monthly Compensation and Reimbursement of Expenses of Professionals, dated

December 21, 2010 (Gonzalez, C.J.)), Administrative Order M-447 (Amended Guidelines for Fees

and Disbursements for Professionals in Southern District of New York Bankruptcy Cases, dated

January 29, 2013 (Morris, C.J.)), and the U.S. Trustee Guidelines for Reviewing Applications for

Compensation and Reimbursement of Expenses Filed Under 11 U.S.C. § 330 (Appendix A to 28

C.F.R. § 58) (collectively, the “Fee Guidelines”), the applicable provisions of the Bankruptcy

Code, the Bankruptcy Rules, the Local Rules, and any applicable orders of the Court, both in

connection with this Application and any interim and final fee applications to be filed by Grant

Thornton in these chapter 11 cases.

16. As more fully described in the Statements of Work, in consideration of the

services provided by Grant Thornton, the Debtors have agreed to pay Grant Thornton in

accordance with the terms and conditions of the Statements of Work (the “Fee Structure”).3

3 The summary of the Fee Structure in this Application is qualified in its entirety by reference to the provisions of the Statements of Work. To the extent there is any discrepancy between the summary contained in this Application and the terms set forth in the Statements of Work, the terms of the Statements of Work shall govern.


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17. Grant Thornton’s fees are based on actual hours incurred and discounted

hourly billing rates for the resources utilized. Based on the scope of the services outlined in the

Statements of Work, the fees are estimated to be between $225,000 and $250,000. The Debtors

agreed to pay Grant Thornton a retainer in the amount of $150,000 and it will be used exclusively

to pay costs, expenses, and fees set out in the Statements of Work.

18. If additional services are required as the engagement progresses, the work

will be undertaken based on the Company’s instructions and invoiced based on the hourly rates.

The hourly rates for accounting and financial reporting advisory services and tax advisory services

to be rendered by Grant Thornton herein, which include a 20% discount off of standard rates, are

as follows:

Grant Thornton Accounting, Financial Reporting Advisory and Tax Advisory Services

Rate per hour (USD)

Partner/Principal/Managing Director $816 Senior Manager/Director $696 Manager $608 Senior Associate $492 Associate $300

19. Grant Thornton will also bill for out of pocket expenses, which includes six

percent (6%) of standard fees to cover items such as supplies, computer and technology usage,

software licensing, research and library databases, and similar expense items.

20. The terms of the Statements of Work were negotiated between the Debtors

and Grant Thornton and reflect the Debtors’ evaluation of the scope of work that has and will be

performed by Grant Thornton on behalf of the Debtors and Grant Thornton’s expertise in such

matters. The Debtors likewise believe that the compensation structure is consistent with, and

typical of, compensation arrangements entered into by Grant Thornton and other comparable firms

in connection with the rendering of similar services under similar circumstances.


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As a consequence of the discussions and arm’s length negotiations, the Debtors believe that the

compensation structure is reasonable, market-based, and designed to compensate Grant Thornton

fairly for its work and to cover customary overhead expenses.

21. Grant Thornton recognizes and has agreed to accept as compensation such

sums as may be allowed by the Court and understands that interim and final fee awards are subject

to approval by the Court. Grant Thornton will maintain records in support of any actual, necessary

costs and expenses incurred in connection with the rendering of its services in these chapter 11

cases.

22. To the best of the Debtors’ knowledge, information, and belief, (a) no

commitments have been made or received by Grant Thornton with respect to compensation or

payment in connection with these chapter 11 cases other than in accordance with the provisions of

the Bankruptcy Code; and (b) there is no agreement or understanding between Grant Thornton and

any other entity, other than a member, partner or regular associate of Grant Thornton or other

member firms affiliated with Grant Thornton International Cooperative, for the sharing of

compensation received or to be received for services rendered in connection with these

proceedings.

23. The Debtors believe that the compensation structure described above and

set forth in the Statements of Work is consistent with the compensation generally charged by

accounting and financial reporting advisor and tax advisors similar to Grant Thornton for

comparable engagements, both in and out of bankruptcy. Furthermore, the Debtors believe that

the compensation structure is consistent with Grant Thornton’s normal and customary billing

practices for cases of comparable size and complexity requiring the level and scope of services to

be provided in these chapter 11 cases. After discussions and arm’s-length negotiations, the


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Debtors believe that the Fee Structure is reasonable, market-based, and designed to compensate

Grant Thornton fairly for its work and to cover customary expenses.

No Duplication of Services

24. The services of Grant Thornton will complement, and not duplicate, the

services to be rendered by any other professionals retained by the Debtors in these chapter 11

cases. As set forth in the Grandon Declaration, Grant Thornton understands that the Debtors have

retained and may retain additional professionals during the term of the engagement, and Grant

Thornton agrees to work cooperatively with such professionals to integrate any respective work

conducted by the professionals on behalf of the Debtors. Grant Thornton is providing distinct

advisory services as set forth in the Statements of Work, and such services are not expected to

duplicate those to be provided by other professionals retained in these chapter 11 cases.

Grant Thornton’s Disinterestedness

25. To the best of the Debtors’ knowledge, and except as disclosed herein and

in the Grandon Declaration or schedules thereto: (a) Grant Thornton has no connection to the

Debtors, their significant creditors, or other significant related parties; (b) Grant Thornton does not

hold any interest adverse to the Debtors’ estate for the matters for which Grant Thornton is to be

employed; and (c) Grant Thornton is a “disinterested person” within the meaning of section

101(14) of the Bankruptcy Code, as required by section 327(a) of the Bankruptcy Code.

Accordingly, the Debtors believe that Grant Thornton is “disinterested” as such term is defined in

section 101(14) of the Bankruptcy Code.

26. As described in more detail in the Grandon Declaration, and subject to any

qualifications outlined therein, Grant Thornton has undertaken the following actions to identify


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and disclose Grant Thornton’s relationships with Debtors’ creditors, and other parties-in-interest

in these chapter 11 cases:

i. Grant Thornton has been provided with conflicts list (the “Conflicts List”) covering the Debtors, the Debtors’ creditors, and other parties-in-interest (the “Listed Parties”).

ii. Grant Thornton has reviewed the Conflicts List and satisfied itself that it is not providing services relating to the chapter 11 cases for any Listed Parties.

iii. There are situations where Grant Thornton has advised certain Listed Parties on other matters, however all such services are unrelated to the chapter 11 cases. Any such relationships have been disclosed in the Grandon Declaration.

iv. Grant Thornton has separately performed standard Grant Thornton conflict and audit clearance checks as part of internal Grant Thornton engagement acceptance and clearance procedures.

27. Given the large number of parties-in-interest in these chapter 11 cases, and

despite the efforts to identify and disclose Grant Thornton’s relationships with parties-in-interest

in these chapter 11 cases, Grant Thornton is unable to state with certainty that every client

relationship or other connection has been disclosed in the Grandon Declaration. The Debtors have

been informed that Grant Thornton will, on request by the Debtors, the U.S. Trustee, or the Court,

make future inquiries following the filing of the Application with additional disclosures to this

Court if necessary or otherwise appropriate.

Basis for Relief

I. The Debtors Should Be Permitted to Retain and Employ Grant Thornton Pursuant to Section 327(a) of Bankruptcy Code.

28. Section 327(a) of the Bankruptcy Code, which provides that a debtor is

authorized to employ professional persons “that do not hold or represent an interest adverse to the

estate, and that are disinterested persons, to represent or assist the [debtor] in carrying out the

[debtor’s] duties under this title.” 11 U.S.C. § 327(a). As discussed above and as further detailed

in the Grandon Declaration, to the best of the Debtors’ knowledge, Grant Thornton is a


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“disinterested person” within the meaning of section 101(14) of the Bankruptcy Code, and does

not hold or represent an interest adverse to the Debtors’ estates.

29. Further, the Debtors seek approval of the Statements of Work, including the

compensation set forth therein, and submit that the retention of Grant Thornton under the terms

described in this Application are appropriate under the Bankruptcy Code.

30. Grant Thornton intends to apply for compensation for professional services

rendered and reimbursement of expenses incurred in connection with these chapter 11 cases,

pursuant to the procedures set forth in sections 330 and 331 of the Bankruptcy Code and applicable

Bankruptcy Rules, Local Rules, the Fee Guidelines, and any other applicable procedures and

orders of the Court.

31. Furthermore, the Fee Structure is consistent with and typical of

compensation arrangements entered into by Grant Thornton and other comparable firms in

connection with the rendering of similar services under similar circumstances. Grant Thornton’s

expertise as well as its knowledge and understanding of the Debtors’ operations, were important

factors in determining the fee structure. Accordingly, the Debtors submit that the fee structure is

both fair and reasonable under the standards set forth in the Bankruptcy Code.

II. Nunc Pro Tunc Relief is Warranted

32. The Debtors believe that employment of Grant Thornton effective nunc pro

tunc to the Commencement Date is warranted under the circumstances of these chapter 11 cases

so that Grant Thornton may be compensated for its services prior to entry of an order approving

Grant Thornton’s retention. Further, the Debtors believe that no party in interest will be prejudiced

by the granting of the nunc pro tunc employment because Grant Thornton provided, and will


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continue to provide, valuable accounting and financial reporting and tax consulting services to the

Debtors’ estate, and has been doing so since the Commencement Date.

Notice

33. Notice of this Application will be provided in accordance with the

procedures set forth in the Order Implementing Certain Notice and Case Management Procedures,

entered on February 21, 2020 (ECF No. 201) (the “Case Management Order”). The Debtors

respectfully submit that no further notice is required.

34. No previous request for the relief sought herein has been made by the

Debtors to this or any other court.

WHEREFORE the Debtors respectfully request entry of Proposed Order granting

the relief requested herein and such other and further relief as the Court may deem just and

appropriate.

Dated: August 26, 2020 New York, New York

/s/ Michael Nowlan Michael Nowlan Chief Restructuring Officer Fairway Group Holdings Corp., et al.


Exhibit A

Proposed Order


UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK ----------------------------------------------------------------x : In re : Chapter 11 : FAIRWAY GROUP HOLDINGS CORP., et al., : Case No. 20-10161 (JLG) : Debtors.1 : (Jointly Administered) ----------------------------------------------------------------x

ORDER AUTHORIZING THE DEBTORS TO RETAIN

AND EMPLOY GRANT THORNTON LLP AS ADVISORS TO THE DEBTORS NUNC PRO TUNC TO THE COMMENCEMENT DATE

Upon the application dated (the “Application”)2 of Fairway Group Holdings Corp. and its

debtor affiliates, as debtors and debtors in possession in the above-captioned chapter 11 cases

(collectively, the “Debtors”), pursuant to section 327(a) of chapter 11 of title 11 of the United

States Code (the “Bankruptcy Code”), Rules 2014(a) and 2016 of the Federal Rules of

Bankruptcy Procedure (the “Bankruptcy Rules”), and Rules 2014-1 and 2016-1 of the Local

Bankruptcy Rules for the Southern District of New York (the “Local Rules”) for authority to retain

and employ Grant Thornton LLP (“Grant Thornton”) to serve as advisors to the Debtors in the

above-captioned chapter 11 cases nunc pro tunc to the Commencement Date, in accordance with

the terms of the Statements of Work, all as more fully set forth in the Application and the Grandon


2 Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Application.


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Declaration; and the Court being satisfied, based on the representations made in the Application

and the Grandon Declaration, that Grant Thornton is “disinterested” as such term is defined in

section 101(14) of the Bankruptcy Code, as modified by section 1107(b) of the Bankruptcy Code,

and as required under section 327(a) of the Bankruptcy Code, and that Grant Thornton represents

no interest adverse to the Debtors’ estates; and the Court having jurisdiction to consider the

Application and the relief requested therein pursuant to 28 U.S.C. §§ 157 and 1334 and the

Amended Standing Order of Reference M-431, dated January 31, 2012 (Preska, C.J.); and

consideration of the Application and the requested relief being a core proceeding pursuant to 28

U.S.C. § 157(b); and venue being proper before the Court pursuant to 28 U.S.C. §§ 1408 and 1409;

and due and proper notice of the Application having been provided to the Notice Parties, and such

notice having been adequate and appropriate under the circumstances, and it appearing that no

other notice need be provided; and the Court having reviewed the Application; and the Court

having determined that the legal and factual bases set forth in the Application establish just cause

for the relief granted herein; and it appearing that the relief requested in the Application is in the

best interests of the Debtors, their estates, creditors, and all parties in interest; and upon all of the

proceedings had before the Court and after due deliberation and sufficient cause appearing

therefor,

IT IS HEREBY ORDERED THAT:

1. The Application is granted as set forth herein.

2. The Debtors are authorized, pursuant to section 327(a) of the Bankruptcy Code,

Bankruptcy Rules 2014(a) and 2016, and Local Rules 2014-1 and 2016-1, to employ and retain

Grant Thornton as tax advisors to the Debtors in accordance with the terms set forth in the


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Application and the Statements of Work, incorporated herein by reference, effective nunc pro tunc

to the Commencement Date.

3. Grant Thornton does not hold or represent any interest adverse to the Debtors’

estate with respect to the matters upon which it is to be employed and is a “disinterested person”

as that term is defined in section 101(14) of the Bankruptcy Code.

4. The terms of the Statements of Work are approved in all respects except as limited

or modified herein.

5. Notwithstanding anything to the contrary in the Statements of Work, the

Application, or the Grandon Declaration, to the extent that the Debtors request Grant Thornton to

perform any services other than those detailed in the Statements of Work, the Debtors shall seek

further application for an order of approval by the Court for a supplement to the retention and any

related modifications to the Statements of Work and such application shall set forth, in addition to

the additional services to be performed, the additional fees sought to be paid;

6. Grant Thornton shall file fee applications for final allowance of compensation and

reimbursement of expenses pursuant to the procedures set forth in sections 330 and 331 of the

Bankruptcy Code, the Bankruptcy Rules, the Local Rules, and any other applicable procedures

and orders of this Court.

7. The limitation of liability provisions in the engagement letter are approved;

provided that all requests by Grant Thornton for the limitation of liability as set forth in the

Engagement Letter shall be made by means of an application to this Court and shall be subject to

review by this Court to ensure that such limitation of liability conforms to the terms of the

engagement letter and is reasonable under the circumstances of the litigation or settlement in

respect of which the limitation of liability is sought; provided, further, that in no event shall Grant


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Thornton be indemnified, entitled to any contribution from the Debtors, exonerated, or have

contractual limitations on its liability in the case of its own bad faith, self-dealing, breach of

fiduciary duty (if any), gross negligence, or willful misconduct. In the event that Grant Thornton

seeks reimbursement from the Debtors for attorneys’ fees and expenses in connection with any

limitation of liability claim pursuant to the engagement letter, the invoices and supporting time

records for the attorneys’ fees and expenses shall be included in Grant Thornton’s own records

and shall be subject to the Fee Guidelines and the approval of the Bankruptcy Court pursuant to

sections 330 and 331 of the Bankruptcy Code without regard to whether such attorneys have been

retained under section 327 of the Bankruptcy Code and without regard to whether such attorneys’

services satisfy section 330(a)(3)(C) of the Bankruptcy Code.

8. Notwithstanding anything in the Application or the Statements of Work to the

contrary, for the avoidance of doubt, the Bankruptcy Court shall have jurisdiction over any and all

matters arising under or in connection with Grant Thornton’s engagement by the Debtors on behalf

of the Debtors and the Statements of Work.

9. Notwithstanding anything to the contrary in the Statements of Work, Grant

Thornton’s services shall be primarily to engage in specific tax advisory services such as financial

due diligence and review of financial statements, calculating the impact of net operating losses,

and modeling tax attributes and the impact of potential bankruptcy scenarios. Grant Thornton shall

exercise reasonable efforts to coordinate with and not duplicate the services provided by other

professionals retained in these chapter 11 cases.

10. To the extent that there is any inconsistency between the terms of the Application,

the Statements of Work, or this Order, the terms of this Order shall govern.


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11. The Debtors are authorized and empowered to take all actions necessary to

implement the relief granted in this Order in accordance with the Application.

12. Notice of the Application as provided therein shall be deemed good and sufficient

notice of such Application and the requirements of the Local Rules are satisfied by such notice.

13. The terms and conditions of this Order shall be immediately effective and

enforceable upon its entry.

14. This Court shall retain jurisdiction to hear and determine all matters arising from

or related to the implementation, interpretation and/or enforcement of this Order.

Dated: ______________, 2020 New York, New York

_______________________________________ THE HONORABLE JAMES L. GARRITY, JR. UNITED STATES BANKRUPTCY JUDGE


Exhibit B

Grandon Declaration


WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, New York 10153 Telephone: (212) 310-8000 Facsimile: (212) 310-8007 Ray C. Schrock, P.C. Sunny Singh Attorneys for Debtors and Debtors in Possession UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK ----------------------------------------------------------------x : In re : Chapter 11 : FAIRWAY GROUP HOLDINGS CORP., et al., : Case No. 20-10161 (JLG) : Debtors.1 : (Jointly Administered) ----------------------------------------------------------------x

DECLARATION OF BARRY G. GRANDON IN

SUPPORT OF APPLICATION OF DEBTORS FOR AUTHORITY TO EMPLOY AND RETAIN GRANT THORNTON LLP AS ADVISORS

FOR THE DEBTORS NUNC PRO TUNC TO THE COMMENCEMENT DATE

I, Barry G. Grandon, under penalty of perjury, declare as follows:

1. I am a Partner of Grant Thornton LLP (“Grant Thornton”) which has a

place of business at 757 Third Avenue, 9th Floor, New York, New York 10017. Except as



2

otherwise noted, I have personal knowledge of the matters set forth herein, and if called and sworn

as a witness, I could and would testify competently thereto.2

2. I make this Declaration in support of the Application of Debtors for

Authority to Retain and Employ Grant Thornton as Advisors for the Debtors Nunc Pro Tunc to

Commencement Date (the “Application”).3

Grant Thornton’s Professional Qualifications

3. Grant Thornton is the U.S. member firm of Grant Thornton International

Ltd., a global audit, tax, and advisory organization of separate, independent network firms

providing services in more than 130 countries, with more than 50 offices in the United States. The

professionals in Grant Thornton’s audit, tax, and advisory practices consist of senior tax,

accounting, and other professionals specializing in providing tax, financial, business, and strategic

advice to enterprises, including distressed enterprises. Grant Thornton has significant

qualifications, experience, and extensive knowledge in the fields of accounting and taxation for

large, sophisticated companies, both in and outside of chapter 11. Accordingly, the Debtors have

determined that Grant Thornton has the resources and experience necessary to perform accounting

and financial reporting advisory services and tax consulting services in these chapter 11 cases.

4. Grant Thornton has provided auditing, tax compliance, and accounting

advisory services in numerous large chapter 11 cases, including, among others: In re Fusion

Connect Inc., No. 19-11811 (SMB) (Bankr. S.D.N.Y. Nov. 13, 2017); In re Claire’s Stores Inc.,

No. 18-10584 (MFW) (Bankr. D. Del. May 8, 2018); In re RFID Corporation f/k/a/ Angelica

Corp., Case No. 17-10870 (JLG) (Bankr. S.D.N.Y. Nov. 13, 2017); In re Avaya Inc., No 17-10089

(SMB) (Bankr. S.D.N.Y Mar. 28, 2017); In re Samson Resources Corporation, No. 15-11934

2 Certain of the disclosures herein relate to matters within the knowledge of other professionals at Grant Thornton.

3 Capitalized terms used herein but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Application.


3

(CSS) (Bankr. D. Del. Dec. 8, 2015); In re ATLS Acquisition, LLC, No. 13-10262 (PJW) (Bankr.

D. Del. Apr. 19, 2013); In re AMR Corp., No. 11-15463 (SHL) (Bankr. S.D.N.Y Oct. 9, 2012); In

re Northstar Aerospace (USA) Inc., No. 12-11817 (MFW) (Bankr. D. Del. Sept. 6, 2012); In re

W.R. Grace & Co., No. 01-01139 (JKF) (Bankr. D. Del. Aug. 14, 2012); In re Tronox Inc., No.

09-10156 (ALG) (Bankr. S.D.N.Y. July 21, 2010); In re Washington Mutual No. 08-12229 (MFW)

(Bankr. D. Del. Jan. 29, 2009).

Services To Be Provided

5. Subject to further order of the Court, and in accordance with that certain

engagement letter dated September 22, 2016, that certain statement of work dated as of January

16, 2020, that certain first addendum to such statement of work, dated as of May 20, 2020, and

that certain second addendum to such statement of work, dated as of June 17, 2020 (collectively,

the “Statements of Work”) and the Application, Grant Thornton will provide certain tax advisory

services as Grant Thornton and the Debtors shall deem appropriate and feasible in order to advise

the Debtors in the course of these cases.

6. As set forth in more detail in the Statements of Work, the Debtors seek to

retain Grant Thornton to provide advisory services relating to the tax implications of potential

bankruptcy scenarios, including the executed or proposed sales of certain assets and the liquidation

of or bankruptcy reorganization around certain assets under sections 382(l)(5) and (6) of the

Bankruptcy Code, advise the Debtors with respect to issues and alternative scenarios relating to

cancellation of debt income, tax attribute modeling, attribute reduction, consolidated tax return

regulation impact, and other relevant tax considerations and assumptions (collectively, the

“Services”).


4

Professional Compensation

7. As more fully described in the Statements of Work, in consideration of the

services provided by Grant Thornton, the Debtors have agreed to pay Grant Thornton in

accordance with the terms and conditions of the Statements of Work (the “Fee Structure”).4

8. Grant Thornton’s fees are based on actual hours incurred and standard

hourly billing rates (discounted by 20%) for the resources utilized. Based on the scope of the

services outlined in the Statements of Work, the fees are estimated to be between $225,000 and

$250,000. The Debtors agreed to pay Grant Thornton a retainer in the amount of $150,000 and it

will be used exclusively to pay costs, expenses, and fees set out in the Statements of Work.

9. If additional services are required as the engagement progresses, the work

will be undertaken based on the Company’s instructions and invoiced based on the hourly rates.

The hourly rates for accounting and financial reporting advisory services and tax advisory services

to be rendered by Grant Thornton herein, which include a 20% discount off of standard rates, are

as follows:

Grant Thornton Accounting, Financial Reporting Advisory and Tax Advisory Services

Rate per hour (USD)

Partner/Principal/Managing Director $816 Senior Manager/Director $696 Manager $608 Senior Associate $492 Associate $300

10. Grant Thornton will also bill for out of pocket expenses, which includes six

percent of standard fees to cover items such as supplies, computer and technology usage, software

licensing, research and library databases, and similar expense items.

4 The summary of the Fee Structure in this Application is qualified in its entirety by reference to the provisions of the Statements of Work. To the extent there is any discrepancy between the summary contained in this Application and the terms set forth in the Statements of Work, the terms of the Statements of Work shall govern.


5

11. The terms of the Statements of Work were negotiated between the Debtors

and Grant Thornton and reflect the Debtors’ evaluation of the extensive work that has and will be

performed by Grant Thornton on behalf of the Debtors and Grant Thornton’s expertise in such

matters.

12. Grant Thornton recognizes and agrees to accept as compensation such sums

as may be allowed by the Court and understands that interim and final fee awards are subject to

approval by the Court. Grant Thornton will maintain records in support of any actual, necessary

costs and expenses incurred in connection with the rendering of its services in these chapter 11

cases.

13. Grant Thornton believes that the compensation structure described above

and set forth in the Statements of Work is consistent with the compensation generally charged by

accounting and financial reporting advisors, and tax advisors similar to Grant Thornton for

comparable engagements, both in and out of bankruptcy. Furthermore, Grant Thornton believes

that the compensation structure is consistent with our normal and customary billing practices for

cases of comparable size and complexity requiring the level and scope of services to be provided

in these chapter 11 cases. After discussions and arm’s-length negotiations, Grant Thornton

believes that the Fee Structure is reasonable, market-based, and designed to compensate Grant

Thornton fairly for its work and to cover customary expenses.

No Duplication of Services

14. Grant Thornton will complement, and not duplicate, the services to be

rendered by any other professionals retained by the Debtors in these chapter 11 cases. Grant

Thornton has informed the Debtors that it understands that the Debtors have retained and may

retain additional professionals during the term of the engagement, and Grant Thornton agrees to

work cooperatively with such professionals to integrate any respective work conducted by the


6

professionals on behalf of the Debtors. Grant Thornton is providing distinct advisory services as

set forth in the Statements of Work, and such services are not expected to duplicate those to be

provided by other professionals retained in these chapter 11 cases.

Grant Thornton’s Disinterestedness

15. The Debtors provided Grant Thornton with a conflicts list covering the

Debtors, the Debtors’ creditors, and other parties-in-interest. Based on the results of the conflict

search conducted to date and described more fully below, to the best of my knowledge, neither I

nor any member of Grant Thornton, insofar as I have been able to ascertain, has any connection

with the Debtors, their creditors, other parties-in-interest (as reasonably known to us), their

respective attorneys, or the U.S. Trustee or any person employed in the Office of the U.S. Trustee,

except as disclosed or otherwise described herein.

16. To the best of my knowledge, Grant Thornton is “disinterested” within the

meaning of section 101(14) of the Bankruptcy Code, as modified by section 1107(b) of the

Bankruptcy Code. As required by section 327(a) of the Bankruptcy Code, Grant Thornton does

not hold nor represent any interest adverse to the Debtors and their estates. To the best of my

knowledge, members of Grant Thornton:

i. are not creditors, equity security holders or insiders of the Debtors;

ii. are not and were not, within two years before the date of the filing of the Debtors’ chapter 11 petitions, a director, officer, or employee of the Debtors; and

iii. do not have an interest materially adverse to the interest of the estate or of any class of creditors or equity security holders, by reason of any direct or indirect relationship to, connection with, or interest in, the Debtors, or for any other reason.

17. As part of its diverse practice, Grant Thornton appears in numerous cases,

proceedings, and transactions involving attorneys, accountants, investment bankers and financial

consultants, some of which may represent claimants and parties-in-interest in these chapter 11


7

cases. Further, Grant Thornton has in the past, and may in the future, be represented by attorneys

and law firms in the legal community, some of whom may be involved in these proceedings. In

addition, Grant Thornton has in the past and will likely in the future be working with or against

other professionals involved in these cases in matters unrelated to these cases. Based on our

current knowledge of the professionals involved, and to the best of my knowledge, none of these

business relations constitute interests materially adverse to the Debtors herein in matters upon

which Grant Thornton is to be employed.

18. Grant Thornton has not been retained to assist any entity or person other

than the Debtors on matters relating to, or in connection with, the chapter 11 cases. However, Grant

Thornton has an extensive practice in advising companies in the financial services sector, in

particular in advising companies in the grocery industry and it can therefore not be excluded that

Grant Thornton may be retained to provide advice to an entity other than the Debtors on matters

related to the chapter 11 cases. In such circumstances, in accordance with the terms and conditions

set out in the Statements of Work (and as is commonplace within Grant Thornton), there shall be

appropriate ethical dividers and security procedures put in place to prevent the sharing of

confidential information. If this Court approves the proposed employment of Grant Thornton by

the Debtors, Grant Thornton will not accept any engagement or perform any services for any entity

or person other than the Debtors where such engagement may cause a conflict of interest for Grant

Thornton in this bankruptcy. Grant Thornton will, however, continue to provide professional

services to entities or persons that may be creditors of the Debtors or parties-in-interest in the

chapter 11 cases; provided, however, that such services do not relate to, or have any direct

connection with, the chapter 11 cases.

19. To determine its relationship with parties-in-interest in these chapter 11

cases, Grant Thornton has researched the client databases maintained to determine whether it had


8

any relationships with the entities that were identified to Grant Thornton by the Debtors. Grant

Thornton has undertaken the following actions to identify and disclose Grant Thornton’s

relationships with Debtors’ creditors, and other parties-in-interest in these chapter 11 cases:

i. Grant Thornton has been provided with conflicts list covering the Debtors, the Debtors’ creditors, and other parties-in-interest (the “Listed Parties”).

ii. Grant Thornton has reviewed this conflicts list and satisfied itself that it is not providing services relating to the chapter 11 cases for any Listed Parties.

iii. There are situations where Grant Thornton has advised certain Listed Parties on other matters, however all such services are unrelated to the chapter 11 cases. Any such relationships are disclosed on Schedule I annexed hereto.

iv. Grant Thornton has separately performed standard Grant Thornton conflict and audit clearance checks as part of internal Grant Thornton engagement acceptance and clearance procedures.

20. To the best of my knowledge and except as disclosed in Schedule I hereto:

(i) Grant Thornton has no relevant connection with any of the Debtors, the Debtors’ creditors, the

U.S. Trustee, any person employed in the office of the U.S. Trustee, or any other party with an

actual or potential interest in these chapter 11 cases or their respective attorneys or accountants,

(ii) Grant Thornton (and Grant Thornton’s professionals) are not creditors, equity security holders,

or insiders of any of the Debtors, (iii) neither Grant Thornton nor any of its professionals is or was,

within two years of the Commencement Date, a director, officer, or employee of the Debtors, and

(iv) no member of Grant Thornton holds or represents an interest materially adverse to the Debtors,

their estates, or any class of creditors or equity security holders by reason of any direct or indirect

relationship to, connection with, or interest in the Debtors, or for any other reason. Accordingly,

I believe that the Grant Thornton is a “disinterested person” as defined in section 101(14) of the

Bankruptcy Code, as modified by section 1107(b) of the Bankruptcy Code and Grant Thornton’s

employment is permissible under section 327(a) of the Bankruptcy Code.


9

21. I am not related or connected to and, to the best of my knowledge, no other

professional of Grant Thornton who will work on this engagement is related or connected to, any

United States Bankruptcy Judge for the Southern District of New York or any of the District Judges

for the Southern District of New York who handle bankruptcy cases or any employee in the Office

of the U.S. Trustee.

22. No promises have been received by Grant Thornton as to compensation in

connection with the chapter 11 cases, other than as outlined in the Statements of Work, and Grant

Thornton has no agreement with any other entity to share any compensation received with any

person.

23. Grant Thornton will, on request by the Debtors, the U.S. Trustee, or the

Court, review its files during the pendency of its engagement by the Debtors, to ensure that no

conflicts or other disqualifying circumstances exist or arise. If any new relevant facts or

relationships are discovered or arise during the pendency of these chapter 11 cases, Grant Thornton

will use reasonable efforts to identify such further developments and will promptly file a

supplemental declaration as required by Bankruptcy Rule 2014.

I declare under penalty of perjury that the foregoing is true and correct to the best

of my knowledge and belief.

Dated: August 26, 2020 /s/ Barry G Grandon Barry G. Grandon


SCHEDULE 1

Interested Parties List

Entity or Individual Relationship in Bankruptcy Relationship to Grant Thornton LLP

FAIRWAY GROUP HOLDINGS CORPORATION

Client‐Debtor Client Relationship

Bank of America, N.A. Banks‐Lender Business, Client Relationship

Citizens Bank Banks‐Lender Business, Client Relationship

Community Bank – Merchants Banks‐Lender Client Relationship

HSBC Bank USA, N.A. (“HSBC”) Banks‐Lender Client Relationship

Jefferies Finance LLC Banks‐Lender Client Relationship

M&T Bank Banks‐Lender Business, Client Relationship

Napier Park Global Capital LLC Banks‐Lender Client Relationship

NBT Bank Banks‐Lender Client Relationship

TD Bank Banks‐Lender Client Relationship

Trustco Bank Banks‐Lender Client Relationship

Whitehorse Capital Partners Banks‐Lender Client Relationship

Davis Polk & Wardwell LLP (Counsel)

DIP LENDER AND COUNSEL – Client Relationship

King & Spalding LLP DIP Parties Business, Client Relationship

Arnold & Porter Kaye Scholer LLP

Non‐Debtor Professionals Client Relationship

Morgan, Lewis & Bockius LLP Non‐Debtor Professionals Client Relationship

Thompson Hine LLP, Non‐Debtor Professionals Business, Client Relationship

FS KKR Capital Corp. On Petition 1 – list of equity holders – names are not is this category and the names under

Banks – Lenders differs

Client Relationship

MJX Asset Management LLC On Petition 1 – list of equity holders – names are not is this category and the names under


Client Relationship

Whitehorse IV Ltd. On Petition 1 – list of equity holders – names are not is this category and the names under


Client Relationship

Imperial Bag & Paper Co. LLC d/b/a Imperial Dade

Top 40 Unsecured Creditors as of 1.22.20 on petitions

Client Relationship

Maplebear, Inc. d/b/a Instacart Top 40 Unsecured Creditors as of 1.22.20 on petitions

Client Relationship

United Natural Foods, Inc. d/b/a Cornuco


Client Relationship

XPO Courier, LLC d/b/a XPO Logistics


Client Relationship



Brigade Capital Management LLC

Top 5 Secured Creditor Client Relationship

KKR Credit Advisors (US) LLC Top 5 Secured Creditor Client Relationship

Goldman Sachs Top 5 Secured Creditor;Banks‐Lender

Business, Client Relationship

Ankura Trust Company, LLC Top 5 Secured Creditors in First Day Affidavit

Client Relationship

C&S Wholesale Grocers Top 5 Secured Creditors in First Day Affidavit

Client Relationship

Interactive Communications International, Inc.

Trust Fund Client Relationship

CIT Bank, N.A. UCC Lien Parties Valuation Relationship

Xerox Financial Services UCC Lien Parties Client Relationship

Albertsons 363 Sale Parties Client Relationship

Target 363 Sale Parties Client Relationship

Weil, Gotshal & Manges LLP Bankruptcy Professionals (Debtors)

Legal Matter

King Kullen Competitors Client Relationship

Rite Aid Competitors Client Relationship

Save‐A‐Lot Competitors Valuation Relationship

Walgreens Competitors Client Relationship

Amazon Competitors;363 Sale Parties Client Relationship

C&S Wholesale Grocers, Inc. Contract Counter‐Parties Client Relationship

Environmental Products Corporation (“Envipco”)

Contract Counter‐Parties Client Relationship

Mablebear, Inc., d/b/a Instacart Contract Counter‐Parties Client Relationship

Outerwall Inc. (“Coinstar”) Contract Counter‐Parties Client Relationship

United Natural Foods, Inc. Contract Counter‐Parties Client Relationship

Eugene Davis Director/Officer Client Relationship

Associated Food Stores, Salt Lake City

Director/Officer – Affiliations Forensic Relationship

Regency Centers (NASDAQ:REG) Director/Officer – Affiliations Business, Client Relationship

Vitamin Shoppe Industries Director/Officer – Affiliations Client Relationship

NYC Fire Department Governmental/Regulatory Agencies

Relationship

NYC Industrial Development Agency

Governmental/Regulatory Agencies

Client Relationship

U.S. Department of Agriculture Governmental/Regulatory Agencies


U.S. Department of Homeland Security


Business Relationship

U.S. Department of Transportation (“DOT”),


Business Relationship

U.S. Securities and Exchange Commission (“SEC”)


Relationship



AIG Insurance – PFA Business, Client Relationship

Arch Specialty Insurance Company

Insurance – PFA Client Relationship

Aspen Specialty Insurance Company

Insurance – PFA Business Relationship

Axis Insurance Company Insurance – PFA Business Relationship

Beazley Insurance – PFA Business, Client Relationship

Endurance American Insurance Company

Insurance – PFA Client Relationship

Great American Insurance Company

Insurance – PFA Business, Client Relationship

Ironshore Insurance – PFA Client Relationship

Magna Carta Insurance, Ltd. Insurance – PFA Client Relationship

Marsh USA Inc. Insurance – PFA Business Relationship

American Financial Group Insurance – Surety Bond Business Relationship

Brigade Leveraged Capital Structures Fund Ltd.

LC Facility Loan Client Relationship

Angel Rivera Litigation Client Relationship

Western Express Litigation Client Relationship

Federal Realty Investment Trust Notice of Appearance Client Relationship

Farrell Fritz, P.C. Ordinary Course Professionals Forensic Relationship

Fox Rothschild LLP Ordinary Course Professionals Client Relationship

Greenberg Traurig LLP Ordinary Course Professionals Client Relationship

Mercer Ordinary Course Professionals Business Relationship

Brigade Capital Management, LP, on behalf of its various

funds and accounts

RSA Parties/ Ad Hoc Group in first day declaration

Client Relationship

FS KKR Capital Corp. II (KKR Credit Advisors (US) LLC

RSA Parties/ Ad Hoc Group in first day declaration

Client Relationship

BJ's Wholesale Club Significant Competitors Client Relationship

Costco Significant Competitors Client Relationship

Dollar General Significant Competitors Client Relationship

Dollar Tree Significant Competitors Client Relationship

Stew Leonard’s Significant Competitors Client Relationship

Trader Joe’s Significant Competitors Client Relationship

Walmart Significant Competitors Client Relationship

CVS Significant Competitors;363 Sale Parties


Battalion CLO V Ltd. Subordinated Loans;Senior Last Out Term Loans

Client Relationship

New York NY Clienting Authorities (Federal, State, and Local; trust fund, use

property, franchise, sales)

Client Relationship

EverSource Utility Providers Business, Client Relationship



National Grid Utility Providers Client Relationship

Orange & Rockland Utility Providers Client Relationship

Summit Energy/Schneider Electric

Utility Providers Client Relationship

T‐Mobile USA, Inc. Utility Providers Client Relationship

Verizon Utility Providers Business, Client Relationship

Verizon NJ Utility Providers Client Relationship


Exhibit C

Statements of Work


Grant Thornton LLP U.S. member firm of Grant Thornton International Ltd.

1

Fairway Group Holdings Corp. Statement of Work for Tax Consulting Services

This Statement of Work (“Statement of Work”) dated January 16, 2020 becomes a part of and is subject to the terms and conditions of the Agreement dated September 22, 2016 between Fairway Group Holdings Corp. (“Client,” “Company,” or “you”) and Grant Thornton LLP (“Grant Thornton,” “Firm,” or “we”). Any capitalized terms that are not defined in this Statement of Work shall have the meanings in the Agreement.

The purpose of this Statement of Work is to describe the scope of services (“Services”) the Company is requesting Grant Thornton to perform, and to set forth the agreed fee, timing and other matters related to the Services.

The services we will provide The Company has requested that Grant Thornton LLP (“GT”) summarize, for the Company’s consideration, the tax implications of the following three potential bankruptcy structuring scenarios based upon assumptions and data provided by the Company and their advisors:

Develop and revise a Model analyzing the federal income tax consequences of the following three scenarios:

1. Sale of Assets of Fridge Group Acquisition Company (“Fridge Opco”). 2. Bankruptcy Reorganization structured as a partial sale of assets and a section

382(l)(5) transaction. 3. Bankruptcy Reorganization structured as a partial sale of assets and section

382(l)(6) transaction.

GT will consider and research and model various issues and alternative scenarios for management’s consideration relating to cancellation of debt (COD) income, tax attribute modeling, attribute reduction, consolidated return regulation impact, IRC Section 382 impact, and other relevant tax considerations and assumptions, including discussions with management regarding the validity of certain assumptions provided to GT by management or the Company’s advisors. Procedures include:

• Performing a tax basis analysis to determine Fridge Holdco’s tax basis in the stock of Fridge Opco applying consolidated tax return principals

• Performing a tax basis analysis to determine Fridge Opco’s tax basis in its assets and the assets of the SMLLCs

• Review of Credit Agreements and Restructuring and Bankruptcy court filings to determine which entities will realize COD income and stock basis impact on potential distributions made to Fridge Holdco

• Calculation of COD income under the various scenarios • Application and modeling of the section 108 and Treas. Reg. section 1502-28 attribute

reduction rules under the various scenarios



2

• Calculating and modeling the impact of the three year interest clawback required in the section 382(l)(5) scenario and adjusting the Company’s NOL to reflect the impact of the clawback

• In connection with the section 382(l)(6) scenario- calculate the base section 382 post-bankruptcy limitation

• In connection with the section 382(l)(6) scenario- calculation the NUBIG/NUBIL and potential annual increase or decrease to the base section 382 limitation under Notice 2003-65 and proposed Section 382 regulations

• Develop a model to reflect the COD income, tax attribute reduction and section 382 impact to the Company under the three scenarios for their consideration.

• Consult and assist Company’s bankruptcy counsel re: bankruptcy court filings. • Additional tax consulting on the three scenarios and related questions to the

procedures described above. Our professional responsibilities Our Services will be performed in accordance with the American Institute of Certified Public Accountants’ Statements on Standards for Tax Services and other applicable professional standards, and applicable federal and state laws and regulations.

Professional and regulatory standards require us to secure your consent prior to providing any of your information to third-parties, including your request to allow workpaper access to third-parties. We will secure your written consent before sharing your information with any third-party.

Upon your request we will return documents you provided to us as well as provide copies of other information in our files to the extent required by applicable professional standards. You are solely responsible for maintaining your books and records, including retaining copies of filed tax returns, and should not rely on Grant Thornton as a recordkeeper.

Generally, our Services will be based upon information furnished by the Company, and Grant Thornton will not evaluate or have any responsibility to verify independently the accuracy, completeness or sufficiency of any such information. However circumstances may arise where we, in our professional judgment, determine that additional fact gathering and due diligence on our part is required.

Federal and State laws and professional standards impose significant responsibilities on tax return preparers, including non-signing preparers who provide tax advice. We prepare tax returns and/or provide tax advice consistent with our professional responsibilities. Our professional responsibilities may include communicating with you about differences between standards applicable to tax return preparers and penalty provisions that may be imposed on a taxpayer regarding a tax position. We may not sign a tax return or provide tax advice unless we feel that a position is supported by sufficient authority or is appropriately disclosed.

Unless expressly stated otherwise in a Statement of Work, any written advice we provide is limited to the matters and potential tax consequences specifically addressed therein, and not



3

intended or written as advice on the application or potential application of any penalties that may be imposed under any federal, state, or foreign statute or regulation in any manner.

Delivering the services We will discuss with you an appropriate timeline for providing the Services listed above, including an agreed upon timeframe for completion. We will provide the Company with a request for information required to complete the Services based on the mutually agreed timeline.

Limitations Our responsibility under this Statement of Work extends only to Services we expressly agree to provide herein. Our responsibility does not include, for example, studies, detailed research or analysis not specifically set forth in this Statement of Work. If such items arise or you request additional Services we will provide you a fee estimate and a new Statement of Work before we invest significant professional time.

All engagements undertaken by Grant Thornton are subject to evaluating and resolving any potential or actual conflict of interest or independence concerns. While the occurrence is highly unusual, matters may arise from the ordinary course of our business operations, or yours, requiring us to resolve a conflict matter and/or terminate or suspend this engagement until any conflict or independence issue is resolved.

Additionally, Grant Thornton may use third-parties to provide administrative and operational support to Grant Thornton business operations. All of these third party service providers are subject to confidentiality obligations to protect the confidentiality of client data. Such entities may be located within or outside the United States.

Use of GT Affiliate Appropriate use of technology and resources is an important aspect of serving you. In our tax return preparation and tax consulting processes, we use the technology and resources of GT US Shared Services Center India Private Limited (“GTSSC”) and/or the Grant Thornton Knowledge and Capability Center India Private Limited (“KCC”), affiliates of Grant Thornton located in Bangalore, India, to assist in providing tax services. Our affiliates’ address is No.65/2, Bagmane Tridib, Block "A", 3rd and 4th Floor, Bagmane Tech Park, C.V. Raman Nagar, Bangalore – 560093.

The Firm’s contract with such affiliates requires that they maintain the confidentiality of any tax return information provided to them in connection with providing tax services.

Professional and regulatory standards require us to obtain your written consent prior to providing your tax return information to such affiliates. Your authorization includes only prior year(s) and current year information in the possession of Grant Thornton that is necessary for the purpose of providing the Services covered by this Statement of Work.



4

If you do not advise us that you wish to limit the duration of your consent, your consent is valid for one year from the date of signature or the time period necessary to complete the Services under this Statement of Work, whichever is greater. If you wish, you may limit the amount, type, or scope of tax return information disclosed by letting us know in writing.

To acknowledge your consent to the disclosure of your tax return information as set forth above, please sign this Statement of Work.

Fees and payment terms Fees Our fees for the Services under the Statement of Work will be based on our standard hourly rates discounted by 20% for this type of work. Based on our experience and the information received to date, we anticipate that the fees will be approximately $125,000 - 150,000. Therefore, it must be understood that it is neither a maximum nor a fixed fee quotation.

Retainer You agree to pay Grant Thornton a retainer in the amount of $150,000 upon execution of this Statement of Work. This retainer will be used to pay costs, expenses and fees for our Services. If any amount of the retainer remains unapplied at the conclusion of our Services, such amount will be refunded to you.

In addition, we will bill for our expenses, which includes 6 percent of fees to cover items such as copies, postage, supplies, computer and technology usage, software licensing, research and library databases and similar expense items. Our billings are payable upon receipt. We also want you to be aware that from time to time, Grant Thornton LLP may receive certain incentives in the form of bonuses and rewards from its corporate card and other vendors. Such incentives to the extent received will be retained by Grant Thornton to cover firm expenses.

Engagement team Frank Russo, Tax Partner Barry Grandon, Managing Director, M&A Tax Group Anthony Dios, Director, M&A Tax Group Rob Barna, Director, M&A Tax Group Josh Brady, Principal, Washington National Tax Office Jeff Borghino, Partner, Washington National Tax Office Greg Fairbanks, Managing Director, Washington National Tax Office Entire agreement This Statement of Work represents the parties’ entire understanding with respect to the Services in this document. This Statement of Work does not modify or amend the Agreement. In the event of a conflict between this Statement of Work, Attachment A – Standard Grant Thornton LLP Terms and Conditions, and any other exhibit or attachment included in the Agreement, the terms of the Attachment A shall govern.


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Addendum to the Statement of Work dated January 16, 2020 – Tax Advisory Services Scope of Work.

This letter shall constitute a statement of work (this “Statement of Work”) between Fairway Group Holdings Corp. (“Fairway” or “you”) and Grant Thornton LLP (“GT” or “we”) pursuant to the Master Services Agreement, dated as of September 22, 2016, between Fairway and GT (the “Master Services Agreement”). This Statement of Work incorporates by reference and is subject to the terms and conditions as set forth in the statement of work executed between Fairway and GT for certain bankruptcy modeling services dated January 16, 2020 a copy of which is attached to this Statement of Work.

You have requested that GT perform additional tax modeling scenarios in addition to the base case agreed to in the January 16, 2020 Statement of Work in connection with a possible bankruptcy restructuring.

Professional Fees and Expenses

Our fees will be based on hours worked by personnel of GT at hourly rates for each individual, plus actual out-of-pocket expenses. A good faith estimate of our fee, excluding out-of-pocket expenses, for the services as currently contemplated is approximately $75,000 - $100,000. To the extent it becomes apparent that our costs may exceed the new fee estimate, we shall inform you immediately and agree on any additional costs prior to undertaking further work.

Scope of Work

GT will: • Update the tax basis to reflect the 12/31/19 trial balance amounts. • Consider different methodologies on allocating basis between different stores and reflect

those methodologies in the model • Revise the base case model to reflect the various bid scenarios to account for the other

stores that will not be part of the Village transaction. • Revise the base case model and address the impact on the mode of the operation of the

stores if no bids came in for the assets such that tax losses may be suspended with regard to retained intangibles under IRC section 197.


5/27/2020 | 10:54 AM CDT

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Hourly Rate Schedule Level Standard Rate Discount rate @ 20% Partner/Principal/Managing Director 1,020 816 Sr. MG./Director 870 696 Manager 760 608 Sr. Associate 615 492 Associate 375 300


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20-10161-jlg doc 709 filed 08/26/20 entered 08/26/20 22:44 ...20-10161-jlg doc 709 filed 08/26/20...

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