UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re:

Perkins & Marie Callenders Inc.., et al.,1 Debtors. ____________________________________

Chapter 11 Case No. 11-11795 (KG) Jointly Administered

Assumption Objection Deadline: 10/25/2011 Re: D.I. 1152

LIMITED OBJECTION OF TRI-STATE HOUSE OF PANCAKES, INC. TO DEBTORS ASSUMPTION OF EXECUTORY CONTRACTS Tri-State House of Pancakes, Inc. (Tri-State), by and through its undersigned counsel, objects (Objection) to the Debtors Notice of (I) Possible Assumption of Executory Contracts and Unexpired Leases, (II) Fixing of Cure Amounts In Connection Therewith, and (III) Deadline to Object Thereto (the Notice). (D.I. 1152) Specifically, Tri-State objects to Debtors

assumption of any Perkins License Agreement related to a franchise location in North Dakota, South Dakota, or Nebraska. In support of its objection, Tri-State states: BACKGROUND 1. On June 13, 2011 (the Petition Date), the Debtors filed a voluntary petition

under Chapter 11 of Title 11 of the United States Code, 11 U.S.C. 101 et seq. (the Bankruptcy Code). 2. The Debtors are operating their businesses and managing their property as

Debtors in Possession pursuant to Bankruptcy Code 1107(a) and 1108.

The Debtors together with the last four digits of each Debtors federal tax identification number are: Perkins & Marie Callenders Inc. (4388); Perkins & Marie Callenders Holding Inc. (3999); Perkins & Marie Callenders Realty LLC (N/A); Perkins Finance Corp. (0081); Wilshire Restaurant Group LLC (0938); PMCI Promotions LLC (7308); Marie Callender Pie Shops, Inc. (7414); Marie Callender Wholesalers, Inc. (1978); MACAL Investors, Inc. (4225); MCID, Inc. (2015); Wilshire Beverage, Inc. (5887); and FIV Corp. (3448). The mailing address for the Debtors is 6075 Poplar Avenue, Suite 800, Memphis, TN 38119.

3.

Debtors and Tri-State are parties to an integrated exectory contract, including an

agreement of December 20, 1973, an agreement of March 31, 1976, and the assignment of subfranchise licensing agreement dated May 4, 1976 (the Agreements). The Agreements permit Debtors to operate Perkins restaurants in the states of North Dakota, South Dakota, and Nebraska (the Territory) in exchange for specified payments to Tri-State, which holds exclusive rights to the Territory, from the Debtors. 4. On October 17, 2011, Debtors filed, among other things, their Notice, under

which Debtors plan to assume Perkins License Agreements in the states of North Dakota, South Dakota, and Nebraska. [D.I. 1152] 5. On October 21, 2011, Debtors filed their Plan Supplement, including Exhibit 10.

In Exhibit 10, Debtors state that they intend to reject the Agreements. [D.I. 1204] 6. Debtors have breached the Agreements and, after obtaining relief from automatic

stay, Tri-State will give notice of default under the Agreements to Debtors and provide an opportunity to cure. 7. In addition, Tri-State will soon file an adversary complaint, under which Tri-State

will seek a declaration that (i) Tri-State has a claim against Debtor and does not own any equity in the Debtors; (ii) that there is no basis upon which to characterize Tri-States rights under the Agreement as forming the basis of any equity interest of Tri-State in the Debtor, (iii) that the Agreements are integrated; (iv) that the Agreements are executory; and (v) that upon breach of the Agreements, all rights licensed by Tri-State to the Debtor revert to Tri-State including the right to sell and service franchises in the states of North Dakota, South Dakota, and Nebraska and the right to every existing franchise agreement in North Dakota, South Dakota, and Nebraska.

8.

Until the rights of each party under the Agreements are determined, Debtors

cannot assume the Perkins License Agreements in North Dakota, South Dakota, and Nebraska because Debtors cannot provide adequate assurance of future performance of any Perkins License Agreement in North Dakota, South Dakota, or Nebraska.

OBJECTION 9. A contract may be assumed only if the Debtors can provide adequate assurance of

future performance under the contract. 11 U.S.C. 365(b)(1)(C). 10. Until the time that this Court determines Tri-States and the Debtors rights under

the Agreements, Debtors cannot provide adequate assurance of performance of any franchise agreement in North Dakota, South Dakota, and Nebraska. If Debtors reject the Agreements, Debtors have no legal right to perform under any franchise agreement in North Dakota, South Dakota, and Nebraska. Moreover, to the extent the Agreements are breached by Debtors, Debtors have no right to operate Perkins restaurants in the Territory. WHEREFORE, Tri-State House of Pancakes, Inc. requests that this Court enter an Order prohibiting Debtors from assuming any Perkins License Agreement in North Dakota, South Dakota, and Nebraska and granting such other and further relief as the Court deems just and proper. Dated: October 25, 2011 Wilmington, Delaware __/s/ Kevin J. Mangan_____________________ Kevin J. Mangan (#3810) Womble Carlyle Sandridge & Rice, LLP 222 Delaware Avenue, Suite 1501 Wilmington, Delaware 19801 Telephone: (302) 252-4320 Facsimile: (302) 252-4330 E-mail: kmangan@wcsr.com 3

Roger W. Damgaard Woods, Fuller, Shultz & Smith P.C. P.O. Box 5027 Sioux Falls, SD 57117-5027 Telephone: (605) 336-3890 E-mail: Roger.Damgaard@woodsfuller.com Counsel to Tri-State House of Pancakes, Inc.

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WCSR 7008004v1

CERTIFICATE OF SERVICE I, Heidi E. Sasso, certify that I am not less than 18 years of age, and that service of the foregoing document was made in the manner indicated on October 25, 2011 on:

Via Hand Delivery or US Mail Robert S. Brady Robert F. Poppiti, Jr. Young Conaway Stargatt & Taylor LLP The Brandywine Building 1000 West Street, 17th Floor Wilmington, DE 19801 Brett D. Goodman Troutman Sanders LLP The Chrysler Building 405 Lexington Ave New York, NY 10174 Mark R. Somerstein Ropes and Gray LLP 1211 Avenue of the Americas New York, NY 10036 William Chipman Landis Rath & Cobb LLP 919 Market Street, Suite 1800 Wilmington, DE 19801 Richard Schepacarter Office of the United States Trustee 844 King Street, 2nd Floor Wilmington, DE 19801 Jesse H. Austin, III Paul Hastings Janofsky & Walker 600 Peachtree Street, NE 24th Floor Atlanta, GA 30308

WCSR 7007861v1

Edward P. Zujkowski Emmet Marvin & Martin LLP 120 Broadway, 32nd Floor New York, NY 10271 Douglas Spelfogel Foley & Lardner LLP 90 Park Avenue New York, NY 10016 Ira Dizengoff Akin Gump Strauss Hauer & Feld LLP One Bryant Park New York, NY 10036 Scott L. Alberino Akin Gump Strauss Hauer & Feld LLP 1333 New Hampshire Avenue, NW Washington, DC 20036 Joseph F. Trunagle Perkins & Marie Callenders Inc. 6075 Poplar Avenue, Suite 800 Memphis, TN 38119 Under penalty of perjury, I declare that the forgoing is true and correct. October 25, 2011 _/s/ Heidi E. Sasso_________________

WCSR 7007861v1