HTML Document View

Full title: ORDER GRANTING IN PART MOVIE GRILL CONCEPTS XXXII, LLCS EMERGENCY MOTION (I) TO ENFORCE PLAN AND CONFIRMATION ORDER AND (II) FOR AN ORDER (A) TO SHOW CAUSE WHY FIRST HORIZON BANK, AS SUCCESSOR BY MERGER TO IBERIABANK, LOCKARD MIDLAND SQUARE, LLC, MIDLAND TOWER PROPERTIES, LLC, AND LOCKARD DEVELOPMENT, INC. SHOULD NOT BE HELD IN CONTEMPT OF COURT AND (B) GRANTING AN AWARD OF SANCTIONS (Related Doc # 1003) Entered on 8/24/2021. (Tello, Chris)

Document posted on Aug 23, 2021 in the bankruptcy, 11 pages and 0 tables.

Bankrupt11 Summary (Automatically Generated)

Jointly Administered 1 The Reorganized Debtors in these Chapter 11 cases, along with the last four digits of each Reorganized Debtor’s federal tax identification number, include: Studio Movie Grill Holdings, LLC (6546); Movie Grill Concepts Trademark Holdings, LLC (3096); Movie Grill Concepts I, Ltd. (6645); Movie Grill Concepts III, Ltd. (2793); Movie Grill Concepts IV, Ltd. (1454); Movie Grill Concepts IX, LLC (3736); Movie Grill Concepts VI, Ltd. (6895); Movie Grill Concepts VII, LLC (2291); Movie Grill Concepts X, LLC (6906); Movie Grill Concepts XI, LLC (2837); Movie Grill Concepts XII, LLC (6040); Movie Grill Concepts XIII, LLC (5299); Movie Grill Concepts XIV, LLC (4709); Movie Grill Concepts XIX, LLC (9646); Movie Grill Concepts XL, LLC (4454); Movie Grill Concepts XLI, LLC (4624); Movie Grill Concepts XLII, LLC (2309); Movie Grill Concepts XLIII, LLC (9721); Movie Grill Concepts XLV, LLC (2570); Movie Grill Concepts XV, LLC (4939); Movie Grill Concepts XVI, LLC (1033); Movie Grill Concepts XVII, LLC (1733); Movie Grill Concepts XVIII, LLC (8322); Movie Grill Concepts XX, LLC (7300); Movie Grill Concepts XXII, LLC (6748); Movie Grill Concepts XXIX, LLC (5857); Movie Grill Concepts XXV, LLC (4985); Movie Grill Concepts XXVI, LLC (5233); Movie Grill Concepts XXVII, LLC (4427); Movie Grill Concepts XXVIII, LLC (1554); Movie Grill Concepts XXX, LLC (1431); Movie Grill Concepts XXXI, LLC (3223); Movie Grill Concepts XXXII, LLC (0196); Movie Grill Concepts XXXIII, LLC (1505); Movie Grill Concepts XXXIV, LLC (9770); Movie Grill Concepts XXXIX, LLC (3605); Movie Grill Concepts XXXV, LLC (0571); Movie Grill Concepts XXXVI, LLC (6927); Movie Grill Concepts XXXVIII, LLC (9657); Movie Grill Concepts XXIII, LLC (7893); Studio Club, LLC (3023); Studio Club IV, LLC (9440); Movie Grill Concepts XI, LLC (2837); Movie Grill Concepts XLI, LLC (4624); Movie Grill Concepts XLVI, LLC (2344); Movie Grill Concepts XLVII, LLC (5866); Movie Grill Concepts XLVIII, LLC (8601); Movie Grill Concepts XLIX, LLC (0537); Movie Grill Concepts L, LLC (5940); Movie Grill Concepts LI, LLC (7754); Movie Grill Concepts LII, LLC (8624); Movie Grill Concepts LIII, LLC (3066); Movie Grill Concepts LIV, LLC (2018); Movie Grill Concepts LV, LLC (4699); Movie Grill Partners 3, LLC (4200); Movie Grill Partners 4, LLC (1363); Movie Grill Partners 6, LLC (3334); and MGC Management ORDER GRANTING MOVIE GRILL CONCEPTS XXXII, LLC’S EMERGENCY MOTION (I) TO ENFORCE PLAN AND CONFIRMATION ORDER AND (II) FOR AN ORDER (A) TO SHOW CAUSE WHY FIRST HORIZON BANK, AS SUCCESSOR BY MERGER TO IBERIABANK, LOCKARD MIDLAND SQUARE, LLC, MIDLAND TOWER PROPERTIES, LLC, AND ORDER GRANTING MOVIE GRILL CONCEPTS XXXII, LLC’S EMERGENCY MOTION (I) TO ENFORCE PLAN AND CONFIRMATION ORDER AND (II) FOR AN ORDER (A) TO SHOW CAUSE WHY FIRST HORIZON BANK, AS SUCCESSOR BY MERGER TO IBERIABANK, LOCKARD MIDLAND SQUARE, LLC, MIDLAND TOWER PROPERTIES, LLC, AND (collectively, the “Lenders”)) ORDER GRANTING M

List of Tables

Document Contents

The follow ing constitutes the ruling of the court and has the force and effect therein described. igned Au gust 23, 2021 _____________________________________________________________________ IN THE UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION IN RE: § CASE NO. 20-32633-SGJ-11 § STUDIO MOVIE GRILL HOLDINGS, LLC, § Chapter 11 et al.,1 § DEBTORS. § Jointly Administered 1 The Reorganized Debtors in these Chapter 11 cases, along with the last four digits of each Reorganized Debtor’s federal tax identification number, include: Studio Movie Grill Holdings, LLC (6546); Movie Grill Concepts Trademark Holdings, LLC (3096); Movie Grill Concepts I, Ltd. (6645); Movie Grill Concepts III, Ltd. (2793); Movie Grill Concepts IV, Ltd. (1454); Movie Grill Concepts IX, LLC (3736); Movie Grill Concepts VI, Ltd. (6895); Movie Grill Concepts VII, LLC (2291); Movie Grill Concepts X, LLC (6906); Movie Grill Concepts XI, LLC (2837); Movie Grill Concepts XII, LLC (6040); Movie Grill Concepts XIII, LLC (5299); Movie Grill Concepts XIV, LLC (4709); Movie Grill Concepts XIX, LLC (9646); Movie Grill Concepts XL, LLC (4454); Movie Grill Concepts XLI, LLC (4624); Movie Grill Concepts XLII, LLC (2309); Movie Grill Concepts XLIII, LLC (9721); Movie Grill Concepts XLV, LLC (2570); Movie Grill Concepts XV, LLC (4939); Movie Grill Concepts XVI, LLC (1033); Movie Grill Concepts XVII, LLC (1733); Movie Grill Concepts XVIII, LLC (8322); Movie Grill Concepts XX, LLC (7300); Movie Grill Concepts XXII, LLC (6748); Movie Grill Concepts XXIX, LLC (5857); Movie Grill Concepts XXV, LLC (4985); Movie Grill Concepts XXVI, LLC (5233); Movie Grill Concepts XXVII, LLC (4427); Movie Grill Concepts XXVIII, LLC (1554); Movie Grill Concepts XXX, LLC (1431); Movie Grill Concepts XXXI, LLC (3223); Movie Grill Concepts XXXII, LLC (0196); Movie Grill Concepts XXXIII, LLC (1505); Movie Grill Concepts XXXIV, LLC (9770); Movie Grill Concepts XXXIX, LLC (3605); Movie Grill Concepts XXXV, LLC (0571); Movie Grill Concepts XXXVI, LLC (6927); Movie Grill Concepts XXXVIII, LLC (9657); Movie Grill Concepts XXIII, LLC (7893); Studio Club, LLC (3023); Studio Club IV, LLC (9440); Movie Grill Concepts XI, LLC (2837); Movie Grill Concepts XLI, LLC (4624); Movie Grill Concepts XLVI, LLC (2344); Movie Grill Concepts XLVII, LLC (5866); Movie Grill Concepts XLVIII, LLC (8601); Movie Grill Concepts XLIX, LLC (0537); Movie Grill Concepts L, LLC (5940); Movie Grill Concepts LI, LLC (7754); Movie Grill Concepts LII, LLC (8624); Movie Grill Concepts LIII, LLC (3066); Movie Grill Concepts LIV, LLC (2018); Movie Grill Concepts LV, LLC (4699); Movie Grill Partners 3, LLC (4200); Movie Grill Partners 4, LLC (1363); Movie Grill Partners 6, LLC (3334); and MGC Management I, LLC (3224) (collectively, the “Reorganized Debtors,” and prior to the occurrence of the Effective Date (as defined below), the “Debtors”)). ORDER GRANTING MOVIE GRILL CONCEPTS XXXII, LLC’S EMERGENCY MOTION (I) TO ENFORCE PLAN AND CONFIRMATION ORDER AND (II) FOR AN ORDER (A) TO SHOW CAUSE WHY FIRST HORIZON BANK, AS SUCCESSOR BY MERGER TO IBERIABANK, LOCKARD MIDLAND SQUARE, LLC, MIDLAND TOWER PROPERTIES, LLC, AND

1

ORDER GRANTING IN PART MOVIE GRILL CONCEPTS XXXII, LLC’S EMERGENCY MOTION (I) TO ENFORCE PLAN AND CONFIRMATION ORDER AND (II) FOR AN ORDER (A) TO SHOW CAUSE WHY FIRST HORIZON BANK, AS SUCCESSOR BY MERGER TO IBERIABANK, LOCKARD MIDLAND SQUARE, LLC, MIDLAND TOWER PROPERTIES, LLC, AND LOCKARD DEVELOPMENT, INC. SHOULD NOT BE HELD IN CONTEMPT OF COURT AND (B) GRANTING AN AWARD OF SANCTIONS Came on to be considered Movie Grill Concepts XXXII, LLC’s (“MGC XXXII” or sometimes referred to herein as the “Debtor” when referring to the post-petition/pre-confirmation time-period and will sometimes be referred to as the “Reorganized Debtor” when referring to the post-confirmation time-period) Emergency Motion (I) to Enforce Plan and Confirmation Order and (II) for an Order (A) to Show Cause Why First Horizon Bank, as Successor by Merger to Iberiabank, Lockard Midland Square, LLC, Midland Tower Properties, LLC, and Lockard Development, Inc. Should Not Be Held in Contempt of Court and (B) Granting an Award of Sanctions [Dkt. No. 997], as amended by MGC XXXII’s Amended Emergency Motion (I) to Enforce Plan and Confirmation Order and (II) for an Order (A) to Show Cause Why First Horizon Bank, as Successor by Merger to Iberiabank, Lockard Midland Square, LLC, Midland Tower Properties, LLC, and Lockard Development, Inc. Should Not Be Held in Contempt of Court and (B) Granting an Award of Sanctions [Dkt. No. 1003] (the “Motion”2), which was joined in by Goldman Sachs Special Lending Group, L.P., as administrative and collateral agent under the Debtors’ prepetition credit facility, as administrative agent under the Debtors’ postpetition debtor-in-possession financing credit facility, and as administrative agent under the Reorganized Debtors’ exit financing credit facility (collectively, in such capacities, in each of the aforesaid credit facilities, the “Agent”, and on behalf of the lenders, including itself, in each of the aforesaid credit facilities 2 Unless otherwise defined herein, all capitalized terms shall have the meaning ascribed to them in the Motion. ORDER GRANTING MOVIE GRILL CONCEPTS XXXII, LLC’S EMERGENCY MOTION (I) TO ENFORCE PLAN AND CONFIRMATION ORDER AND (II) FOR AN ORDER (A) TO SHOW CAUSE WHY FIRST HORIZON BANK, AS SUCCESSOR BY MERGER TO IBERIABANK, LOCKARD MIDLAND SQUARE, LLC, MIDLAND TOWER PROPERTIES, LLC, AND

2

(collectively, the “Lenders”)) [Dkt. No. 1009]. The Motion was opposed by First Horizon Bank, as successor by merger to IBERIABANK (“First Horizon”) [Dkt. No. 1006]. Based on the specific facts and circumstances of this case, the Court finds that: (i) it has subject matter jurisdiction with respect to the dispute before it, pursuant to 28 U.S.C. § 1334; and (ii) it has authority to finally adjudicate this matter as a core proceeding pursuant to 28 U.S.C. § 157(b) and this Court may enter a final order consistent with Article III of the Constitution. While, generally, bankruptcy subject matter jurisdiction is more limited with regard to post-confirmation disputes involving a reorganized debtor, the dispute brought before this Court involved the Reorganized Debtor’s Plan, the Confirmation Order, and discharge provisions/injunctions therein. Thus, bankruptcy subject matter jurisdiction exists. Moreover, no party disputed that bankruptcy subject matter jurisdiction exists or expressed a lack of consent to the Court issuing a ruling on this matter. The Court further finds that: (i) venue is proper before this Court pursuant to 28 U.S.C. §§ 1408 and 1409; (ii) notice of the Motion, the requested relief, and the hearing, while expedited, was sufficient under the circumstances, no party challenged the sufficiency of the notice, and no other notice need be provided; and (iii) upon review of the record before the Court, including the legal and factual bases set forth in the Motion, evidence admitted, and the statements made by counsel at the hearing, and after due deliberation thereon, there being found good and sufficient cause exists, this Court hereby makes the following findings of fact and conclusions of law. ORDER GRANTING MOVIE GRILL CONCEPTS XXXII, LLC’S EMERGENCY MOTION (I) TO ENFORCE PLAN AND CONFIRMATION ORDER AND (II) FOR AN ORDER (A) TO SHOW CAUSE WHY FIRST HORIZON BANK, AS SUCCESSOR BY MERGER TO IBERIABANK, LOCKARD MIDLAND SQUARE, LLC, MIDLAND TOWER PROPERTIES, LLC, AND

3

FINDINGS OF FACT AND CONCLUSIONS OF LAW3 1. The Motion was filed by MGC XXXII, a Reorganized Debtor. MGC XXXII confirmed its Chapter 11 Plan on March 31, 2021, and such Plan went effective on April 15, 2021. Goldman Sachs Special Lending Group, L.P. (“Goldman Sachs”) was the administrative agent under the Debtors’ prepetition credit facility and the Debtors’ post-petition financing credit facility. Goldman Sachs Bank USA, Crestline Specialty Lending II, L.P., and American National Insurance Company were lenders (collectively, the “Lenders”) under the Debtors’ prepetition credit facility and their post-petition financing credit facility. The Lenders are indirect majority equity owners of MGC XXXII pursuant to the confirmed Plan. The Lenders also funded the Reorganized Debtors’ exit financing credit facility, with Goldman Sachs acting as the administrative agent under such credit facility. 2. First Horizon is the secured lender of Lockard Midland Square, LLC, Midland Tower Properties, LLC, and Lockard Development, Inc. (collectively, the “Landlord”) who were the landlord on a certain property in Charlotte, North Carolina referred to as the “Prosperity Lease,” on which Debtor MGC XXXII was formerly the tenant, operating a movie theater. 3. The dispute raised in the Motion involves the Prosperity Lease and, more particularly, certain remaining personal property and/or fixtures still located at such location. The Court approved the Debtor’s motion to reject the Prosperity Lease during the bankruptcy case, by an order dated January 27, 2021, which rejection was retroactive back to the bankruptcy petition date of October 23, 2020. The Debtor had hoped to reach a later agreement with the Landlord to create a new lease at the same location. The rejection order stated: “No personal property shall be deemed abandoned at the Prosperity Lease location until February 16, 2021, subject to further extension. Debtors shall pay the landlord on the Prosperity Lease $10,000 for such extension on abandonment in lieu of any administrative expense claim by the landlord under the Prosperity Lease.” 4. While the rejection order referred to the abandonment of “personal property,” it did not provide a definition for (or an adjudication as to what was) “personal property.” 5. On multiple occasions after the rejection of the Prosperity Lease, the Debtor and Landlord agreed that the Debtor could store its personal property at the lease premises for a $10,000 payment for a set period of time, without the 3 To the extent any findings of fact may constitute conclusions of law, and vice versa, they are hereby adopted as such. ORDER GRANTING MOVIE GRILL CONCEPTS XXXII, LLC’S EMERGENCY MOTION (I) TO ENFORCE PLAN AND CONFIRMATION ORDER AND (II) FOR AN ORDER (A) TO SHOW CAUSE WHY FIRST HORIZON BANK, AS SUCCESSOR BY MERGER TO IBERIABANK, LOCKARD MIDLAND SQUARE, LLC, MIDLAND TOWER PROPERTIES, LLC, AND

4

possibility of deemed abandonment of the Debtor’s personal property. [Dkt. Nos 849, 932, 959, 972, & 1004]. 6. Once again, there was no definition or agreement as to what constituted the Debtor’s “personal property.” 7. Negotiations for a new lease appear to have fallen flat. The Landlord formally terminated the Prosperity Lease on or about July 13, 2021 (which, of course, the Debtor earlier “rejected” pursuant to Bankruptcy Code section 365; all parties agree that “rejection,” pursuant to Bankruptcy Code section 365, is not equivalent to “termination”). The termination notice contained a 30-day deadline for MGC XXXII to remove equipment and other “pledged collateral” from the premises. On July 27, 2021, the Reorganized Debtor notified the Landlord and First Horizon that it intended to remove its personal property from the premises. The next day, First Horizon responded that it had no objection, so long as First Horizon’s collateral was not removed. Subsequently, after the Reorganized Debtor made arrangements to retrieve and store its personal property (including hiring a third-party vendor with expertise in removing the more than 900 recliner chairs at the premises, hiring movers and trucks, and renting storage facilities), First Horizon notified the Reorganized Debtor that it would not allow it to enter the premises to remove the personal property after all. First Horizon thereafter filed a complaint against the Reorganized Debtor and Goldman Sachs in North Carolina State Court and a motion for a TRO. The complaint sought a declaratory judgment as to ownership of the personal property, as well as injunctive relief. On August 5, 2021, the court held a hearing on the TRO motion and entered a consent order. Under the consent order, the Reorganized Debtor and Goldman Sachs agreed not to remove the personal property for a short period of time. 8. The Reorganized Debtor thereafter sought the intervention of this court, through the filing of the Motion. The Reorganized Debtor argues that the actions of First Horizon, including the prevention of the Reorganized Debtor from retrieving its personal property and the filing of the North Carolina State Court action, are violative of the Court’s Confirmation Order and the discharge provision/injunctions contained therein and in the Reorganized Debtor’s Chapter 11 plan. The Chapter 11 plan vested in the Reorganized Debtor all of the Debtor’s then-existing property free and clear of liens, claims, and interests on the Effective Date under the Plan and prevented post-confirmation pursuit of causes of action that might have been released, resolved, or settled under the Plan. See, e.g., Plan, Art. IV.C.3; Conf. Order, ¶ 11; Plan Art. VIII.A., B. & H; Conf. Order, ¶ GG & ¶¶ 40, 51 & 52. 9. Pivotal to deciding this Motion is analyzing whether the personal property at the Prosperity Lease was property of the estate, under section 541, that would have revested in the Reorganized Debtor pursuant to the confirmed ORDER GRANTING MOVIE GRILL CONCEPTS XXXII, LLC’S EMERGENCY MOTION (I) TO ENFORCE PLAN AND CONFIRMATION ORDER AND (II) FOR AN ORDER (A) TO SHOW CAUSE WHY FIRST HORIZON BANK, AS SUCCESSOR BY MERGER TO IBERIABANK, LOCKARD MIDLAND SQUARE, LLC, MIDLAND TOWER PROPERTIES, LLC, AND

5

Plan. Only if it was, would First Horizon be violating the Plan provisions and Confirmation Order. Moreover, the court also considers sections 365 and 502(g) of the Bankruptcy Code—and provisions therein setting forth a process for dealing with landlord’s and tenant’s rights under a lease—to be significant to this analysis. 10. The following list is agreed to be the personal property at the lease premises, but the court understands that the only items that are in dispute are the first two:  979 Milano Luxury Electric Recliners – INORCA  Kitchen Package, to include but not limited to Freezers, Coolers, Refrigerators,  Microwaves, Shake Machine, Ice Bins, Shelving, Ovens, Beverage Dispenser – Chain Link  Pizza Oven – XLT  Small Wares Package – Wassertrom & Edward Don  Lobby and Bar Furniture – to include but not limited to Barstools, Chairs – Beaufurn  Custom Made Booths – Valdez Custom Works  Cradlepoint Modems & Routers - Technologent  Upholstered Lounge Chairs – Cornerstone Interiors  Bar Tables and Benches – Jakobe Furniture  Popcorn Popper – Cretors  Interior Sign Package – Chandlers  Dell Servers, Epson Printers – PC Connect  Point of Sale Equipment – PC Connect  TVs and Lobby Sounds Equipment – CES+ The court will hereinafter refer to the first two bullet point items as the “Disputed Fixtures.” 11. As part of the Motion, the Court must address the question of what is a “fixture” under the Prosperity Lease (and therefore what may or may not belong to MGC XXXII, as opposed to the Landlord—or derivatively Landlord’s secured lender First Horizon). With regard to the 979 theater chairs, the unrefuted evidence was that they are bolted (with two-to-four bolts each) to risers and to the floor within the theaters and are plugged into electrical outlets. The kitchen equipment has a degree of attachment as well. All of these items were installed by MGC XXXII. 12. Property rights of a debtor are determined by state law and contracts among parties. ORDER GRANTING MOVIE GRILL CONCEPTS XXXII, LLC’S EMERGENCY MOTION (I) TO ENFORCE PLAN AND CONFIRMATION ORDER AND (II) FOR AN ORDER (A) TO SHOW CAUSE WHY FIRST HORIZON BANK, AS SUCCESSOR BY MERGER TO IBERIABANK, LOCKARD MIDLAND SQUARE, LLC, MIDLAND TOWER PROPERTIES, LLC, AND

6

13. The most relevant provision of the Prosperity Lease is the so-called “Alternations Clause” at Section 9.1 which reads: 9.1 Tenant shall not make any alterations, additions or improvements in excess of Seventy-Five Thousand and No/100 Dollars ($75,000.00) to the Premises without the prior written consent of Landlord, except for the installation of unattached, movable trade fixtures which may be installed without drilling, cutting or otherwise defacing the Premises. Notwithstanding the foregoing, Tenant shall not make any alterations, additions or improvements to any structural component of the Premises without the prior written consent of Landlord, which consent Landlord shall not unreasonable withhold. All alterations, additions, improvements and fixtures (other than Tenant's unattached, readily movable furniture and office equipment) which may be made or installed by either party upon the Premises shall remain upon and be surrendered with the Premises and become the property of Landlord at the termination of this Lease, unless Landlord requests their removal in which event Tenant shall remove the same and restore the Premises to their original condition at Tenant's expense. (Emphasis added.) See also Section 31.1(v) of the Prosperity Lease, which addresses Goldman Sachs’ lien on personal property at the leasehold and states that in no event shall its collateral “include permanent improvements made by Landlord or Tenant to Premises, or the heating, ventilation and air conditioning equipment, if any, installed by Tenant at the Premises.” The unrefuted evidence was that there was nothing “permanent” about the Disputed Fixtures. The one and only witness testified that theater chairs, for example, had been taken out of other theaters easily, several times before. 14. Notably, the term “fixture” is not defined in the Prosperity Lease—except it is clear that the Tenant (i.e., MGC XXXII’s) unattached, readily movable furniture and office equipment is not surrendered or to become the property of the Landlord. So, the question is whether the theater chairs and kitchen equipment are “unattached, readily movable” trade fixtures. 15. Courts are required to give words in a contract their plain and ordinary meaning. What is the plain and ordinary meaning of these words? The unrefuted evidence of the Reorganized Debtor’s CEO is that these items are readily movable and can be moved without defacing the premises. He also credibly testified that they are attached by two-to-four bolts each, and plugged into an electrical outlet, but are easily unattached. In an effort to give the words “fixtures” and “unattached” and “movable” their plain and ordinary meanings, ORDER GRANTING MOVIE GRILL CONCEPTS XXXII, LLC’S EMERGENCY MOTION (I) TO ENFORCE PLAN AND CONFIRMATION ORDER AND (II) FOR AN ORDER (A) TO SHOW CAUSE WHY FIRST HORIZON BANK, AS SUCCESSOR BY MERGER TO IBERIABANK, LOCKARD MIDLAND SQUARE, LLC, MIDLAND TOWER PROPERTIES, LLC, AND

7

the court has consulted North Carolina law, which applies here. See NationsBank of N. Carolina, N.A. v. Capital Associates Intern., Inc., 916 F. Supp. 549, 554 (W.D.N.C. 1996) (“[T]rade fixtures are those items of personal property brought upon the land by a tenant which are necessary to carry on the trade or business to which the land will be devoted”; a tenant is allowed to remove what has apparently become affixed to the land, if affixed for the purpose of trade and not merely for the better enjoyment of the premises); DOT v. Adams Outdoor Advertising, 370 N.C. 101 (2017) (advertising billboard held a trade fixture/personal property when it was 65 feet tall, weighed approximately 30,000 pounds, had a steel monopole support, and was attached to the land by a foundation that was dug 18 feet into the ground, 6 feet around, and backfilled with concrete. Lessee “removed the billboard and structure from the CHS Lot by carefully dismantling them and reinstalling major components thereof at another billboard location along Independence Boulevard, as permitted by the lease agreement.”); Western Railroad v. Deal, 90 N.C. 110 (1884) (railroad’s house depot held a trade fixture/personal property and the railroad could remove it from the realty and relocate it a few hundred yards to the side of its track for use with a new set of lines); Overman v. Sasser, 12 S.E. 64 (N.C. 1890) (an engine, cotton gin and condenser that were bolted and nailed to the realty affirmed to be removable trade fixtures/personal property). 16. The court also notes that the Debtor listed the Disputed Fixtures on its Schedule B of assets as its own. 17. The court believes that the preponderance of the evidence established that the Disputed Fixtures were in the nature of trade fixtures which should be deemed unattached and readily moveable—when giving these terms their ordinary meaning under North Carolina law. For that reason, they were property of the estate, pursuant to section 541, that revested in the Reorganized Debtor under its chapter 11 Plan when it became effective. Therefore, the actions of First Horizon in denying access and filing the North Carolina State Court action interfered with the Reorganized Debtor’s access to them. 18. Having established this, the next question is whether First Horizon’s actions violated the Plan and the Confirmation Order. 19. The court starts with the proposition that there is a process in bankruptcy to adjudicate the rights between a debtor-tenant and its landlord. If a debtor rejects a lease, as happened here, the landlord’s recourse is to treat the lease as terminated and file a breach of contract claim for any damages (known as “unsecured rejection damages”). See sections 365 and 502(g) of the Bankruptcy Code. Moreover, the landlord may file an administrative expense claim for any unpaid rent or damage, destruction or loss to the premises. See Section 365(d)(3) and 503. Such claims are dealt with pursuant to a chapter 11 plan. In ORDER GRANTING MOVIE GRILL CONCEPTS XXXII, LLC’S EMERGENCY MOTION (I) TO ENFORCE PLAN AND CONFIRMATION ORDER AND (II) FOR AN ORDER (A) TO SHOW CAUSE WHY FIRST HORIZON BANK, AS SUCCESSOR BY MERGER TO IBERIABANK, LOCKARD MIDLAND SQUARE, LLC, MIDLAND TOWER PROPERTIES, LLC, AND

8

turn, it is typical to have language in a plan (such as existed here), providing that confirmation of the plan discharges the debtor from any debt that arose before the date of such confirmation. See 11 U.S.C. § 1141(d); Matter of T-H New Orleans Ltd. P'ship, 116 F.3d 790, 803 (5th Cir. 1997) (“Confirmation of a plan of reorganization grants the Chapter 11 debtor a discharge of all debts arising prior to confirmation.”). Further, “section 524 [of the Bankruptcy Code] protects a debtor from any subsequent action by a creditor whose claim has been discharged in a bankruptcy case … [and] operates as an injunction against enforcement” of such a debt. Matter of Edgeworth, 993 F.2d 51, 53 (5th Cir. 1993); 11 U.S.C. § 524(a)(2) (a discharge operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect or recover a discharged debtor for any discharged claim). “A violation of the injunction is an affront to the issuing court.” In re Crocker, 941 F.3d 206, 216 (5th Cir. 2019), as revised (Oct. 22, 2019). 20. In addition to the statutory discharge and injunction provisions established by the Bankruptcy Code in sections 524 and 1141, the Plan and the Confirmation Order here prohibited parties from taking acts against the Reorganized Debtors and their property. In particular, the Plan Discharge provided that “the distributions, rights, and treatment that are provided in the Plan [are] in complete satisfaction, discharge, and release, effective as of the Effective Date, of Claims [and] Interests … whether known or unknown, against, liabilities of, Liens on, obligations of, rights against, and Interests in, the Debtors or any of their assets or properties.” Plan, Art. VIII.A; Conf. Order, ¶ 52. The Plan Injunction similarly prohibited “all Entities that have held, hold, or may hold Claims, Interests, Liens, or Causes of Action that have been released [under] the Plan or are discharged pursuant to … the Plan” from taking certain actions against the Reorganized Debtors. Plan, Art. VIII.H. Such prohibited actions included “enforcing any Lien … against [the Debtors or the Reorganized Debtors] or the property or the estates of such Entities on account of or in connection with or with respect to any such Claims, Interests, Liens or Causes of Action.” Id. 21. The Landlord and its secured lender, First Horizon, are subject to the discharge and injunction provisions that became effective on the Effective Date pursuant to sections 1141(d) and 524(a)(2) of the Bankruptcy Code, Article VIII.A and Article VIII.H of the Plan, and the Confirmation Order, which incorporated the provisions of the Plan by reference. 22. For the reasons set forth above, the Court hereby finds that First Horizon violated the Plan, the Plan Injunction, the Plan Discharge, and the Confirmation Order in denying access to MGC XXXII to its personal property including the Disputed Fixtures and by filing the North Carolina State Court lawsuit. ORDER GRANTING MOVIE GRILL CONCEPTS XXXII, LLC’S EMERGENCY MOTION (I) TO ENFORCE PLAN AND CONFIRMATION ORDER AND (II) FOR AN ORDER (A) TO SHOW CAUSE WHY FIRST HORIZON BANK, AS SUCCESSOR BY MERGER TO IBERIABANK, LOCKARD MIDLAND SQUARE, LLC, MIDLAND TOWER PROPERTIES, LLC, AND

9

For the reasons set forth above, it is hereby ORDERED that: 1. The relief sought by the Motion is granted, in part, and the Plan, Plan Injunction, Plan Discharge, and Confirmation Order are hereby enforced as set forth herein; 2. First Horizon immediately comply with the terms of Plan, Plan Injunction, Plan Discharge, the Confirmation Order, and this Order, including by immediately dismissing the State Court Proceeding with prejudice; and immediately ceasing and desisting from further prosecuting the State Court Proceeding, any of the claims and other relief sought therein. 3. First Horizon and Landlord immediately comply with the terms of Plan, Plan Injunction, Plan Discharge, the Confirmation Order, and this Order, including by immediately granting MGC XXXII access to the Prosperity Location (as defined in the Motion) to retrieve all of its Personal Property (as defined in the Motion), including the Disputed Fixtures, with such access continuing until such time as MGC XXXII is able to retrieve all such property. 4. First Horizon shall appear on October 7, 2021, at 2:30 p.m. being a date at least thirty (30) days after entry of this Order, to show cause why: (i) it should not be held in contempt of court for its conduct; and (ii) it should not be required to pay sanctions, including but not limited to all present and future damages, costs, and attorneys’ fees incurred by MGC XXXII in prosecuting and defending all matters in connection herewith and other damages. 5. Notice of the Motion as provided therein shall be deemed good and sufficient notice of such Motion and the requirements of Bankruptcy Rule 6004(a) and the Local Rules are satisfied by such notice. 6. Notwithstanding Bankruptcy Rule 6004(h), to the extent applicable, this Order shall be effective and enforceable immediately upon entry hereof; 7. This Court shall retain jurisdiction with respect to all matters relating to the interpretation or implementation of this Order. IT IS SO ORDERED. # # # End of Order # # # ORDER GRANTING MOVIE GRILL CONCEPTS XXXII, LLC’S EMERGENCY MOTION (I) TO ENFORCE PLAN AND CONFIRMATION ORDER AND (II) FOR AN ORDER (A) TO SHOW CAUSE WHY FIRST HORIZON BANK, AS SUCCESSOR BY MERGER TO IBERIABANK, LOCKARD MIDLAND SQUARE, LLC, MIDLAND TOWER PROPERTIES, LLC, AND

10

SUBMITTED BY: Frank J. Wright Texas Bar No. 22028800 Jeffery M. Veteto Texas Bar No. 24098548 LAW OFFICES OF FRANK J. WRIGHT, PLLC 2323 Ross Avenue, Suite 730 Dallas, Texas 75201 Telephone: (214) 935-9100 COUNSEL TO MOVIE GRILL CONCEPTS XXXII, LLC ORDER GRANTING MOVIE GRILL CONCEPTS XXXII, LLC’S EMERGENCY MOTION (I) TO ENFORCE PLAN AND CONFIRMATION ORDER AND (II) FOR AN ORDER (A) TO SHOW CAUSE WHY FIRST HORIZON BANK, AS SUCCESSOR BY MERGER TO IBERIABANK, LOCKARD MIDLAND SQUARE, LLC, MIDLAND TOWER PROPERTIES, LLC, AND

11