1 2 3 4 5 6 7 8 9 In re 10 TC GLOBAL, INC., 11 Debtor.

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

HONORABLE KAREN A. OVERSTREET

HEARING DATE: WEDNESDAY, OCTOBER 10, 2012 BEFORE THE HONORABLE TIMOTHY W. DORE HEARING TIME: 3:30 P.M. LOCATION: SEATTLE, COURTROOM 8106 SUBJECT TO ENTRY OF ORDER SHORTENING TIME FOR HEARING

UNITED STATES BANKRUPTCY COURT WESTERN DISTRICT OF WASHINGTON

No. 12-20253 EMERGENCY MOTION FOR ORDER AUTHORIZING DEBTOR TO PAY PREPETITION WAGES, BENEFITS AND ASSOCIATED COSTS

TC Global, Inc. (Debtor) dba Tullys Coffee, debtor-in-possession herein, moves the Court for an order authorizing it to pay prepetition wages, commissions, taxes, benefits and expenses as described herein. This motion is based upon the files and records herein and upon the Declaration of Scott Pearson in Support of First Day Motions (Pearson Declaration). I. BACKGROUND INFORMATION

The Debtor commenced this Chapter 11 case on October 10, 2012 (Petition Date). The Debtor is operating its business and managing its affairs as a debtor-in-possession under 11 U.S.C. 1107 and 1108. A complete summary of the Debtors operations and the events leading to this Chapter 11 are set forth in the Pearson Declaration filed contemporaneously herewith.

EMERGENCY MOTION FOR ORDER AUTHORIZING DEBTOR TO PAY PREPETITION WAGES, BENEFITS AND ASSOCIATED COSTS Page 1
1977 20121 xi051r06ds.002

B USH S TROUT & K ORNFELD

LAW OFFICES

LLP

5000 Two Union Square 601 Union Street Seattle, Washington 98101-2373 Telephone (206) 292-2110 Facsimile (206) 292-2104

Case 12-20253-KAO

Doc 2

Filed 10/10/12

Ent. 10/10/12 13:02:31

Pg. 1 of 4

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 A.

II.

AMOUNTS PROPOSED TO BE PAID

Prepetition Wages and Commissions Owed 1. The Debtor currently employs 610 individuals. Pearson Decl. The Debtor's most

recent payroll periods runs from September 24, 2012 through October 7, 2012 and is scheduled to be paid on October 15, 2012. In addition, certain payroll taxes associated with the prepetition portion of the payroll period have not yet been paid. Pearson Decl. 2. The Debtor estimates that amounts owed on October 14, 2012 in connection with the

payroll for the period ending October 7, 2012 and related taxes are approximately $482,390.63. Pearson Decl. 3. The Debtor maintains employer-sponsored medical, dental, vision, life, long-term

disability, and short-term disability plans for its employees, with annual and monthly costs as indicated: Type Medical/Vision (non-Union) Dental (non-Union) Life/ADD (non-Union) Long-term Disability (non-Union) Short-term Disability (non-Union) Totals: 4. Company United Healthcare Washington Dental Svc Lincoln Financial Lincoln Financial Lincoln Financial Monthly Cost
(Employer portion only)

Annual Cost
(Employer portion only)

25,473.59 2,220.00 609.41 1,148.92 2,090.00 31,541.92

305,683.08 26,640.00 7,312.92 13,787.04 25,080.00 378,503.04

The Debtors business operation also includes providing its employees other benefits

such as vacation pay and a reimbursement of business expenses including credit card charges for company-authorized expenses. Id. The Debtor desires to continue to provide, in the exercise of its discretion and business judgment, employee benefits including the referenced insurance coverage and the payment of accrued and unpaid benefits on an uninterrupted basis. Id.

EMERGENCY MOTION FOR ORDER AUTHORIZING DEBTOR TO PAY PREPETITION WAGES, BENEFITS AND ASSOCIATED COSTS Page 2
1977 20121 xi051r06ds.002

B USH S TROUT & K ORNFELD

LAW OFFICES

LLP

5000 Two Union Square 601 Union Street Seattle, Washington 98101-2373 Telephone (206) 292-2110 Facsimile (206) 292-2104

Case 12-20253-KAO

Doc 2

Filed 10/10/12

Ent. 10/10/12 13:02:31

Pg. 2 of 4

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

5.

A loss of the ability to pay its ordinary payroll and benefits would have an adverse

effect on the Debtor's ability to maintain its ongoing operations and successfully maximize its assets for the benefit of creditors. Id. 6. Allowing the Debtor to honor prepetition claims for wages and employee benefits,

including honoring payroll, will assist the Debtor in maintaining normal day-to-day operations. Id. By preventing employees from suffering loss of income and benefits, employees are more likely to remain with the Debtor through its restructuring, to the benefit of the estate and its creditors. Id. The Debtor believes no employee is owed in excess of $11,725 in prepetition earnings as allowed by 11 U.S.C. 507(a)(4). III. CONCLUSION

WHEREFORE, the Debtor respectfully requests entry of an order authorizing it to pay the following prepetition wages, commissions and expenses: (1) Wages, salaries, sick pay, holiday pay, related benefits, and all federal, state and local

payroll-related taxes, deductions and withholdings pertaining to such payments accrued by employees of the Debtor prepetition; (2) Vacation benefits related to the prepetition services which have accrued in accordance

with existing policies and practices of the Debtor and which become payable subsequent to the Petition Date on account of services rendered to the Debtor, whether prior to or after the Petition Date, provided that such benefits shall not exceed a period of four weeks for any one employee; (3) Out-of-pocket business expenses, including credit card charges for company-

authorized expenses, incurred by employees of the Debtor prior to the Petition Date that would otherwise be reimbursable;

EMERGENCY MOTION FOR ORDER AUTHORIZING DEBTOR TO PAY PREPETITION WAGES, BENEFITS AND ASSOCIATED COSTS Page 3
1977 20121 xi051r06ds.002

B USH S TROUT & K ORNFELD

LAW OFFICES

LLP

5000 Two Union Square 601 Union Street Seattle, Washington 98101-2373 Telephone (206) 292-2110 Facsimile (206) 292-2104

Case 12-20253-KAO

Doc 2

Filed 10/10/12

Ent. 10/10/12 13:02:31

Pg. 3 of 4

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

(4)

Worker's compensation and related benefits and claims of employees of the Debtor

which arose or accrued prior to the Petition Date; and (5) Payments to maintain the insurance coverage and benefits set forth above.

DATED this 10th day of October, 2012. BUSH STROUT & KORNFELD LLP

By /s/ Christine M. Tobin-Presser Christine M. Tobin-Presser, WSBA #27628 Attorneys for TC Global, Inc.

EMERGENCY MOTION FOR ORDER AUTHORIZING DEBTOR TO PAY PREPETITION WAGES, BENEFITS AND ASSOCIATED COSTS Page 4
1977 20121 xi051r06ds.002

B USH S TROUT & K ORNFELD

LAW OFFICES

LLP

5000 Two Union Square 601 Union Street Seattle, Washington 98101-2373 Telephone (206) 292-2110 Facsimile (206) 292-2104

Case 12-20253-KAO

Doc 2

Filed 10/10/12

Ent. 10/10/12 13:02:31

Pg. 4 of 4

1 2 3 4 5 6 7 8 9 10 11 12 In re 13 TC GLOBAL, INC., 14 Debtor. 15 16 17 18 19 20 21 22 23 24 25 26 [PROPOSED] ORDER AUTHORIZING PAYMENT OF PREPETITION WAGES, BENEFITS AND ASSOCIATED COSTS No. 12-20253 UNITED STATES BANKRUPTCY COURT WESTERN DISTRICT OF WASHINGTON

THIS MATTER came before the Court upon the Emergency Motion ("Motion") for Order Authorizing Payment of Prepetition Wages, Benefits and Associated Costs filed by TC Global, Inc. (Debtor) dba as Tullys Coffee, debtor-in-possession herein. The Court has reviewed the files and records herein and finds that cause exists for the requested relief. Now, therefore, it is hereby ORDERED: 1. 2. expenses: [PROPOSED] ORDER AUTHORIZING PAYMENT OF PREPETITION WAGES, BENEFITS AND ASSOCIATED COSTS Page 1
1977 20121 xi11bq06mn

That the Motion is granted; That the Debtor is authorized to pay the following prepetition wages, commissions and

B USH S TROUT & K ORNFELD

LAW OFFICES

LLP

5000 Two Union Square 601 Union Street Seattle, Washington 98101-2373 Telephone (206) 292-2110 Facsimile (206) 292-2104

Case 12-20253-KAO

Doc 2-1

Filed 10/10/12

Ent. 10/10/12 13:02:31

Pg. 1 of 2

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

a.

Wages, salaries, sick pay, holiday pay, related benefits, and all federal, state and

local payroll-related taxes, deductions and withholdings pertaining to such payments accrued by employees of the Debtor prepetition; b. Vacation benefits related to the prepetition services which have accrued in

accordance with existing policies and practices of the Debtor and which become payable subsequent to the Petition Date on account of services rendered to the Debtor, whether prior to or after the Petition Date, provided that such benefits shall not exceed a period of four weeks for any one employee; c. Out-of-pocket business expenses, including credit card charges for company-

authorized expenses, incurred by employees of the Debtor prior to the Petition Date that would otherwise be reimbursable; d. Worker's compensation and related benefits and claims of employees of the

Debtor which arose or accrued prior to the Petition Date; and e. Payments to maintain the insurance coverage and benefits set forth above.

/ / /End of Order/ / / 16 17 18 19 20 21 22 23 24 25 26 [PROPOSED] ORDER AUTHORIZING PAYMENT OF PREPETITION WAGES, BENEFITS AND ASSOCIATED COSTS Page 2
1977 20121 xi11bq06mn

Presented by: BUSH STROUT & KORNFELD LLP

By_________________________________ Christine M. Tobin-Presser, WSBA #27628 Attorneys for TC Global, Inc.

B USH S TROUT & K ORNFELD

LAW OFFICES

LLP

5000 Two Union Square 601 Union Street Seattle, Washington 98101-2373 Telephone (206) 292-2110 Facsimile (206) 292-2104

Case 12-20253-KAO

Doc 2-1

Filed 10/10/12

Ent. 10/10/12 13:02:31

Pg. 2 of 2