Case 14-10752-BLS Doc 24 Filed 04/03/14 Page 1 of 6 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: Chapter 11 BROOKSTONE HOLDINGS CORP., et al.,1 Case No. 14.. l67S?2 Debtors. (Joint Administration Requested) Ref. No. 12 MOTION OF THE DEBTORS FOR ENTRY OF AN ORDER AUTHORIZING DEBTORS TO FILE UNDER SEAL SCHEDULES A AND TO EXHIBIT 1 OF MOTION OF THE DEBTORS FOR ENTRY OF AN ORDER AUTHORIZING IMPLEMENTATION OF KEY EMPLOYEE RETENTION PLAN AND KEY EMPLOYEE INCENTIVE PLAN The above-captioned debtors and debtors-in-possession (the ??Debtors?) by and through their proposed undersigned counsel, hereby submit this Motion of the Debtors for Entry of an Order Authorizing Debtors to File Under Seal Schedules A and to Exhibit 1 of Motion of the Debtors for Entry of an Order Authorizing Implementation of Key Employee Retention Plan and Key Employee Incentive Plan (the ?Motion?). In support of the Motion, the Debtors rely on the Declaration of James Speltz in Support of Debtors? Chapter I 1 Petitions and First Day Pleadings (the ?First Day and respectfully represent and set forth as follows: JURISDICTION AND VENUE 1. The United States Bankruptcy Court for the District of Delaware (the ?Court?) has jurisdiction over this Motion pursuant to 28 U.S.C. 157 and 1334 and the Amended 1 The Debtors, along with the last four digits of each Debtor?s tax identi?cation number, are: Brookstone Holdings Corp. (4638), Brookstone, Inc. (2895), Brookstone Company, Inc. (3478), Brookstone Retail Puerto Rico, Inc. (5552), Brookstone International Holdings, Inc. (8382), Brookstone Purchasing, Inc. (2514), Brookstone Stores, Inc. (2513), Gardeners Eden, Inc. (7793), Brookstone Military Sales, Inc. (2029), Big Blue Audio LLC Brookstone Holdings, Inc. (2515); and, Brookstone Properties, Inc. (2517). The Debtors? corporate headquarters and the mailing address for each Debtor is One Innovation Way, Merrimack, NH 03054. 2 Except where otherwise indicated, capitalized terms used but not defined in this Motion have the meanings ascribed to them in the First Day Declaration. Case 14-10752-BLS Doc 24 Filed 04/03/14 Page 2 of 6 Standing Order of Reference from the United States District Court for the District of Delaware dated February 29, 2012. This is a core proceeding within the meaning of 28 U.S.C. 157(b)(2), and the Court may enter a final order consistent with Article of the United States Constitution.3 Venue is proper in this District pursuant to 28 U.S.C. 1408 and 1409. 2. The statutory predicates for the relief requested herein are section 107(b) of chapter 11 of the United States Code (the ?Bankruptcy Code?), Rule 9018 of the Federal Rules of Bankruptcy Procedure (the ?Bankruptcy Rules?), and Rule 9018-1(b) of the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware (the ?local Rules?). GENERAL BACKGROUND 3. On the date hereof (the ?Petition Date?), the Debtors commenced the above- captioned chapter 11 cases (the ?Chapter 11 Cases?) by each ?ling a voluntary petition for relief under chapter 11 of the Bankruptcy Code with the Court. 4. The Debtors continue to operate their business and manage their properties as debtors-in-possession, pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. As of the date of this Motion, no trustee, examiner or statutory committee has been appointed in these Chapter 11 Cases. 5. A detailed description of the Debtors and their businesses, and the facts and circumstances supporting this Motion and the Chapter 11 Cases, are set forth in greater detail in the First Day Declaration, filed contemporaneously herewith and incorporated herein by reference. 3 Pursuant to Local Rule the Debtors hereby confirm their consent to entry of a final order by this Court in connection with this Motion if it is later determined that this Court, absent consent of the parties, cannot enter final orders or judgments consistent with Article of the United States Constitution. 2 Case 14-10752-BLS Doc 24 Filed 04/03/14 Page 3 of 6 RELIEF REQUESTED 6. By this Motion, the Debtors seek entry of an order, substantially in the form of the proposed order attached hereto, authorizing the Debtors to file under seal Schedules A and to Exhibit 1 of Motion of the Debtors for Entry of an Order Authorizing Implementation of Key Employee Retention Plan and Key Employee Incentive Plan (the Motion?). 7. Through the Motion, the Debtors seek authorization to implement certain compensation plans for 33 key employees (the ?Key Employees?) and 4 key executives (the 8. In support of the Motion, the Debtors attached as Exhibit 1 a summary of the compensation plans. Schedules A and to Exhibit 1 identify by name and position those who are eligible to receive such compensation, as well as the individual bonuses that the Key Employees could receive. 9. The Debtors seek to file Schedules A and under seal to protect confidential commercial information. The Debtors, however, do not seek to withhold from the public information regarding the history of and reasons for approval of the KERP and KEIP, the aggregate amount to be paid under the KERP and KEIP, and the details of how such amounts are calculated -- indeed, all that information is available in the Motion and/or the main body of Exhibit 1. BASIS FOR RELIEF 10. The Court should authorize -the Debtors to file Schedules A and under seal to protect the Debtors? proprietary and commercial information, and to preserve the confidentiality of the Key Employees? and Key Executives? personal and financial information. 3 Case 14-10752-BLS Doc 24 Filed 04/03/14 Page 4 of 6 11. Section 107(b) of the Bankruptcy Code authorizes the issuance of orders that protect parties from the potential harm resulting from the disclosureof confidential information. Speci?cally, section 107(b) states that motion or on its own initiative, with or without notice, the court may make any order which justice requires (1) to protect the estate or any entity in respect of a trade secret or other confidential research, development, or commercial information Similarly, Bankruptcy Rule 9018 and Local Rule 9018-1 authorize the filing under seal of documents containing confidential information. 12. ?Commercial information? has been defined as ?information which would result in an ?unfair advantage to competitors by providing them with information as to the commercial operations of the debtor.?? In re Altera Healthcare Corp., 353 B.R. 66, 75 (Bankr. D. Del. 2006) (quoting In re Orion Pictures Com, 21 F.3d 27, 27-28 (2d Cir. 1994)). If an interested party is requesting to seal information covered by section l07(b) of the Bankruptcy Code, ?the court is required to protect a requesting party and has no discretion to deny the application.? In re Orion Pictures Corp., 21 F.3d at 27. 13. Here, filing Schedules A and under seal is important to preserve the confidentiality of the Debtors? commercial information. 14. Disclosing the names of the Key Employees and Key Executives, as well as the individual bonuses they could receive, would give the Debtors? competitors an unfair advantage because they could use it to target specific employees with employment offers having greater compensation than those offered in the KERP and KEIP. The loss of the Key Employees and Key Executives at this challenging time would impair the Debtors? business operations and would negatively affect the Debtors? efforts throughout these Chapter 11 Cases. 4 Case 14-10752-BLS Doc 24 Filed 04/03/14 Page 5 of 6 15. Additionally, public disclosure of the Key Employees? and Key Executives? names and their potential compensation may cause con?ict and distress among the ranks, thereby lowering employee morale and further disrupting the Debtors? business operations. 16. Lastly, it would be unfair to the Key Employees and Key Executives to have their personal and financial information appear on public documents. 17. Therefore, the relief requested herein is necessary to maintain the Debtors? competitive advantage, to preserve the con?dentiality of Key Employees? and Key Executives? personal information, and to avoid unnecessary disruptions in the Debtors? operations. NOTICE 18. The Debtors have provided notice of this Motion to: the Office of the United States Trustee for the District of Delaware; each of the Debtors? creditors holding the thirty (30) largest unsecured claims as set forth in the consolidated list ?led with the Debtors? petitions; counsel to the agent for the Debtors? proposed postpetition financing facility; counsel to the agent for the Debtors? prepetition secured credit facility; counsel to the indenture trustee for the Debtors? prepetition senior secured notes; the Internal Revenue Service; the United States Department of Justice; and all parties who have requested notice in these Chapter 11 Cases pursuant to Bankruptcy Rule 2002. In light of the nature of relief requested in this Motion, the Debtors respectfully submit that no further notice is necessary. NO PRIOR REQUEST 19. No prior motion for the relief requested herein has been filed in this or any other C0111?t . [Remainder of page intentionally left blank. 5 Case 14-10752-BLS Doc 24 Filed 04/03/14 Page 6 of 6 WHEREFORE, for the reasons set forth herein and in the First Day Declaration, the Debtors respectfully request that this Court enter an order substantially in the form of the proposed order attached hereto, authorizing the Debtors to file under seal Schedules A and to Exhibit 1 of the Motion, and authorizing the Debtors to file under seal the unredacted Version thereof. Dated: April 2014 LANDIS RATH COBB LLP Wilmington, Delaware I V-f Adam G. Landis (No. 3407 Kerri K. Mumford (No. 4186) Kimberly A. Brown (No. 5138) 919 Market Street, Suite 1800 Wilmington, Delaware 19801 Tel: (302) 467-4400 Fax (302) 467-4450 Email: 1andis@lrclaw.com murnford@lrclaW.com brown@1rclaw.corn and Charles A. Dale Mackenzie L. Shea Gates LLP One Lincoln Street Boston, Massachusetts 02111 Tel: (617) 261-3100 Fax: (617) 261-3175 Email: rnackenzie.shea@klgates.co1n Proposed Counsel to the Debtors and Debtors-im Possession 6