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Louise’s Trattoria, Inc.

Chapter 11 Proceeding

In re Louise’s Trattoria, Inc., Debtor
United States Bankruptcy Court, Central District of California,
Case No. LA 97-44573-SB

Attorneys for Bidder: Alschuler Grossman & Pines LLP
Expert for Bidder: Marc S. Margulis, C.F.A., A.S.A., M.B.A.
Louise’s Trattoria, Inc. is a Southern California casual dining Italian restaurant chain consisting of 14 locations generating revenues of approximately $23 million. Having filed for protection under Chapter 11, the Court ultimately ordered the sale of the Debtor’s assets at an auction hearing to the bidder offering the highest value of assets to the Debtor’s estate as determined by findings of this Court.

Mr. Margulis was retained by bidder LT Acquisition Corp. to value the non-cash assets offered in connection with its bid, to file an opinion of value with the Court, to submit to oral examination by attorneys for other bidders, and to provide expert testimony to the Court. The non-cash assets comprising LT’s bid included, in part, (i) a senior note bearing interest at the prime rate plus 250 basis points, amortizing fully over seven years, due in five years, and (ii) a subordinated zero coupon note due and payable in five years. To perform these analyses, Mr. Margulis determined the enterprise value of the 14 locations, estimated the residual value of equity, giving effect to the highly leveraged nature of the proposed transaction, by use of the Black-Scholes Option Pricing Model, and reviewed criteria for placement of senior and subordinated debt securities in the current credit market.

Bidder LT Acquisition Corp., having submitted the highest valued offer, was awarded the assets of the Debtor.