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Full title: Motion to Approve Compromise under Rule 9019 Plaintiff's Fourth Motion for an Order Approving Settlements of Avoidance Actions Pursuant to Fed. R. Bankr. P. 9019 Filed by CR Holding Liquidating, Inc.. Hearing scheduled for 3/30/2021 at 11:00 AM at US Bankruptcy Court, 824 Market St., 6th Fl., Courtroom #2, Wilmington, Delaware. Objections due by 3/19/2021. (Griffiths, Norman) (Entered: 02/26/2021)

Document posted on Feb 25, 2021 in the bankruptcy, 6 pages and 0 tables.

Bankrupt11 Summary (Automatically Generated)

(f/k/a Charlotte Russe Holding Inc.) (4325); CR Holdings Liquidating Corporation (f/k/a Charlotte Russe Holdings Corporation) (1045); CR Intermediate Liquidating Corporation (f/k/a Charlotte Russe Intermediate Corporation) (6345); CR Enterprise Liquidating, Inc. (f/k/a Charlotte Russe Enterprise, Inc.) (2527); CR Liquidating, Inc. (f/k/a Charlotte Russe, Inc.) (0505); CR Merchandising Liquidating, Inc. (f/k/a Charlotte Russe Merchandising, Inc.) (9453); and CR Administration Liquidating, Inc. (f/k/a Charlotte Russe Administration, Inc.) (9456).The Debtors retained special preference counsel that have sent demand letters, filed adversary proceedings, and negotiated settlements (subject to Court approval if required)2 2 On August 28, 2019 the Court entered the Order on Motion for Authority to Settle Classes of Preference Claim Controversies Pursuant to Bankruptcy Rule 9019(b)Pursuant to the Settlement Procedures Order, Avoidance Actions with a gross amount demanded greater than $250,000.00 are subject to the motion requirements of Bankruptcy Rule 9019, while those with smaller gross amounts demanded are subject to either limited notice of settlement procedures or no notice.To date, the Debtors have not obtained Bankruptcy Court approval for any of the settlements of the Avoidance Actions listed on Exhibit A attached hereto.The settlements result in certain payments being made to the estates and the release by the Defendants of various claims such entities may have against the Debtors and their estates, in consideration for a release by the Debtors of the various claims able to be asserted against Defendants in the Avoidance Actions, without the Debtors expending significant estate resources litigating such claims.

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IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE Chapter 11 In re: Case No.: 19-10210 (LSS) (Jointly Administered) CR Holding Liquidating, Inc., et al.,1 Debtors. CR Holding Liquidating, Inc., et al., Plaintiff, v. Objection Deadline: March 19, 2021 Hearing Date: March 30, 2021 at 11:00 a.m. Defendants Listed Below, Defendants.
Table 1 on page 1. Back to List of Tables
Defendants Adversary Number
Two Guys and One LLC; and United California Discount
Corporation dba UC Factors
19-50587
BBC Apparel Group, LLC dba Dollhouse 19-50533
PLAINTIFF’S FOURTH MOTION FOR AN ORDER APPROVING SETTLEMENTS OF AVOIDANCE ACTIONS PURSUANT TO FED. R. BANKR. P. 9019 CR Holding Liquidating, Inc., et al., (the “Debtors” or “Plaintiff”) by and through their undersigned counsel, hereby file this Fourth Motion for an Order Approving Settlements of Avoidance Actions Pursuant to Fed. R. Bankr. P. 9019 (the “Motion”). In further support of the Motion, the Debtors respectfully represent as follows: JURISDICTION 1. The Court has jurisdiction over this Motion pursuant to 28 U.S.C. §§ 157 and 1334. This matter is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A), (F) and (O). 1 The Debtors and the last four digits of their respective federal taxpayer identification numbers are as follows: CR Holding Liquidating Inc. (f/k/a Charlotte Russe Holding Inc.) (4325); CR Holdings Liquidating Corporation (f/k/a Charlotte Russe Holdings Corporation) (1045); CR Intermediate Liquidating Corporation (f/k/a Charlotte Russe Intermediate Corporation) (6345); CR Enterprise Liquidating, Inc. (f/k/a Charlotte Russe Enterprise, Inc.) (2527); CR Liquidating, Inc. (f/k/a Charlotte Russe, Inc.) (0505); CR Merchandising Liquidating, Inc. (f/k/a Charlotte Russe Merchandising, Inc.) (9453); and CR Administration Liquidating, Inc. (f/k/a Charlotte Russe Administration, Inc.) (9456). The Debtors’ mailing address is 3111 Camino Del Rio N. Suite 400, San Diego, CA 92108.

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2. Venue of this proceeding and this Motion is proper in this district pursuant to 28 U.S.C. §§ 1408 and 1409. 3. The predicates for the relief sought herein are 11 U.S.C. §§ 105 and 363(b) and Rules 2002 and 9019 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”). BACKGROUND 4. On February 3, 2019 (the “Petition Date”), each of the Debtors commenced a voluntary case under chapter 11 of the Bankruptcy Code. The Debtors are operating their businesses and managing their properties as debtors-in-possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. 5. The Court has entered an order for joint administration of these cases [Bankr. D.I. 75]. 6. On February 14, 2019, Region 3 of the Office of the United States Trustee appointed a seven-member Official Committee of Unsecured Creditors (the “Committee”). No trustee or examiner has been appointed. 7. Pursuant to sections 542, 547, 548, 550, 704(a), 1106, and 1107 of chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”), the Debtors are authorized and have standing to investigate, pursue, commence, prosecute, compromise, settle, or otherwise resolve certain causes of action under chapter 5 of the Bankruptcy Code. 8. The Debtors retained special preference counsel that have sent demand letters, filed adversary proceedings, and negotiated settlements (subject to Court approval if required)2 2 On August 28, 2019 the Court entered the Order on Motion for Authority to Settle Classes of Preference Claim Controversies Pursuant to Bankruptcy Rule 9019(b) (the “Settlement Procedures Order”). [D.I. 809]. Pursuant to the Settlement Procedures Order, Avoidance Actions with a gross amount demanded greater than $250,000.00 are subject to the motion requirements of Bankruptcy Rule 9019, while those with smaller gross amounts demanded are subject to either limited notice of settlement procedures or no notice. See D.I. 809.

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with entities that received payments in the 90-day period prior to the Petition Date, as well as those that received post-petition transfers that may be subject to turnover. 9. In accordance with their duties under the Bankruptcy Code, the Debtors have reviewed their financial books and records and investigated the estates’ causes of action to avoid transfers pursuant and/or recover property of their estates pursuant to sections 542 through 550 of the Bankruptcy Code. 10. The Debtors have settled, subject to Bankruptcy Court approval, Avoidance Actions against two (2) defendants (the “Defendants”). A list containing the name of each Defendant, the gross amount demanded from that Defendant, the amount paid or to be paid by each Defendant to the Debtors in settlement of each Avoidance Action, and a rationale for each settlement is attached hereto as Exhibit A. 11. To date, the Debtors have not obtained Bankruptcy Court approval for any of the settlements of the Avoidance Actions listed on Exhibit A attached hereto. RELIEF REQUESTED 12. By this Motion, the Debtors seek approval of the settlements of the Avoidance Actions listed on Exhibit A attached hereto pursuant to Bankruptcy Rule. 9019. Rule 9019 provides that “[o]n motion by the trustee and after notice and a hearing, the court may approve a compromise or settlement. Notice shall be given to creditors, the United States trustee, the debtor . . . and to any other entity as the court may direct.” Fed. R. Bankr. P. 9019(a); see also Myers v. Martin (In re Martin), 91 F.3d 389, 393 (3d Cir. 1996). 13. The Debtors are obligated to maximize the value of their estates and make decisions in the best interests of all creditors of the estates. Id. at 394. The Debtors believe, in their business judgment, the settlement of the Avoidance Actions against the Defendants listed

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on Exhibit A hereto is in the best interests of the estates and all creditors, especially in light of the cost, uncertainty, and delay of litigation. Courts generally defer to a plaintiff’s business judgment when there is a legitimate business justification for the plaintiff’s decision. Id. at 395. 14. In determining whether a settlement should be approved under Bankruptcy Rule 9019, the Court must “assess and balance the value of the claim that is being compromised against the value to the estate of the acceptance of the compromise proposal.” Id. at 393. In striking this balance, the Court should consider “(i) the probability of success in the litigation; (ii) the likely difficulties in collection; (iii) the complexity of the litigation involved, and the expense, inconvenience and delay necessarily attending it; and (iv) the paramount interest of the creditors.” Id. 15. A review of the four factors from Martin demonstrates that the settlements of the Avoidance Actions against the Defendants are: (i) in the best interests of the estate and all of the creditors; (ii) reasonable; and (iii) within the Debtors’ sound business judgment. The Debtors agreed to each Proposed Settlement based on a variety of factors, including potential defenses to underlying claims. The Debtors believe each proposed settlement is well within the range of reasonableness and in the best interests of the Debtors’ estates. The settlement of the Avoidance Actions will eliminate the potentially high costs of litigation and the uncertainty of success in light of the possible defenses. 16. The Debtors respectfully represent that the compromises reached with each Defendant are fair, reasonable, and in the best interest of the creditors and the Debtors’ estates. The Debtors likewise believe the proposed settlements are fair and equitable, and founded on the exercise of sound business judgment by the Debtors. The settlements result in certain payments being made to the estates and the release by the Defendants of various claims such entities may

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have against the Debtors and their estates, in consideration for a release by the Debtors of the various claims able to be asserted against Defendants in the Avoidance Actions, without the Debtors expending significant estate resources litigating such claims. NOTICE 17. Notice of this Motion, together with a copy of the Motion, has been given to (i) United States Trustee for the District of Delaware, (ii) the Defendants, and (iii) all parties that have requested such notice pursuant to Bankruptcy Rule 2002 as of this date. In light of the nature of the relief requested herein, the Debtors submit that no other or further notice need be given. CONCLUSION WHEREFORE, the Debtors respectfully request that this Court enter the attached proposed order granting the Plaintiff’s Motion approving the settlements of the Avoidances Actions against the Defendants set forth on Exhibit A attached hereto; and granting such other and further relief as the Court deems just and equitable. Dated: February 26, 2021 CONNOLLY GALLAGHER LLP By: /s/ N. Christopher Griffiths_________ N. Christopher Griffiths (#5180) Stephanie S. Riley (#5803) 1201 North Market Street, 20th Floor Wilmington, DE 19801 Telephone: 302-888-6313 Email: cgriffiths@connollygallagher.com -and-

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ASK LLP Joseph L. Steinfeld, Jr., Esq. Kara E. Casteel, Esq. Gary D. Underdahl, Esq. 2600 Eagan Woods Drive, Suite 400 St. Paul, MN 55121 Telephone: (651) 406-9665 e-mail: jsteinfeld@askllp.com gunderdahl@askllp.com -and- Marianna Udem, Esq. Edward E. Neiger, Esq. 151 West 46th Street, 4th Fl. New York, NY 10036 Telephone: (212) 267-7342 E-mail: mudem@askllp.com Counsel for CR Holding Liquidating, Inc., et. al.

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