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Full title: Objection to (related document(s): 381 Motion for relief from stay to Permit Continuation of State Court Litigation Fee amount $188, filed by Creditor Vicki L Uloth) filed by Debtor Studio Movie Grill Holdings, LLC. (Wright, Frank)

Document posted on Jan 11, 2021 in the bankruptcy, 6 pages and 0 tables.

Bankrupt11 Summary (Automatically Generated)

NO. 20-32633-SGJ § STUDIO MOVIE GRILL HOLDINGS, LLC, § Chapter 11 et al.The Debtors in these Chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, include: Studio Movie Grill Holdings, LLC (6546) (“SMG Holdings”); OHAM Holdings, LLC (0966); 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 XLIV, LLC (8783); 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 XXI, LLC (1508); Movie Grill Concepts XXII, LLC (6748); Movie Grill Concepts XXIV, LLC (5114); 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 XXXVII, LLC (6401); 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 ManagementThe statements in Paragraph 10 of the Motion constitute recitations of the relief requested by Uloth; accordingly, the Debtors deny that this Court should grant such relief.In substance, Uloth seeks relief from the automatic stay to pursue personal-injury litigation against the Debtors (the “Litigation”) in the 193rd Judicial District Court of Dallas County, Texas (the “

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Frank J. Wright Texas Bar No. 22028800 Jeffery M. Veteto Texas Bar No. 24098548 Jay A. Ferguson Texas Bar No. 24094648 LAW OFFICES OF FRANK J. WRIGHT, PLLC 2323 Ross Avenue, Suite 730 Dallas, Texas 75201 Telephone: (214) 935-9100 ATTORNEYS FOR STUDIO MOVIE GRILL HOLDINGS, LLC, et al. IN THE UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION IN RE: § CASE NO. 20-32633-SGJ § STUDIO MOVIE GRILL HOLDINGS, LLC, § Chapter 11 et al.,1 § § DEBTORS. § Jointly Administered DEBTORS’ OBJECTION TO THE MOTION OF VICKI L. ULOTH TO MODIFY STAY TO PERMIT CONTINUATION OF STATE COURT LITIGATION [Related to Docket No. 381] 1 The Debtors in these Chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, include: Studio Movie Grill Holdings, LLC (6546) (“SMG Holdings”); OHAM Holdings, LLC (0966); 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 XLIV, LLC (8783); 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 XXI, LLC (1508); Movie Grill Concepts XXII, LLC (6748); Movie Grill Concepts XXIV, LLC (5114); 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 XXXVII, LLC (6401); 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).

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Studio Movie Grill Holdings, LLC and its debtor affiliates, as debtors and debtors in possession in the above-captioned chapter 11 cases (collectively, the “Debtors” or the “SMG”), file this Objection (the “Objection”) to Vicki L. Uloth’s (“Uloth”) Motion to Modify Stay to Permit Continuation of State Court Litigation (the “Motion”). I. RESPONSE TO ALLEGATIONS 1. The Debtors admit the allegations contained in Paragraph 1 of the Motion. 2. The statements in Paragraph 2 of the Motion constitute a legal conclusion and do not require a response from Debtors. To the extent Debtors’ are required to respond, Debtors admit the allegation in Paragraph 2 of the Motion. 3. The Debtors admit the allegations contained in the first sentence of Paragraph 3 of the Motion. To the extent state court pleadings so provide, the Debtors admit that the second sentence of Paragraph 3 is a recitation of Uloth’s state court claims. 4. The Debtors admit the allegations contained in Paragraph 4 of the Motion. 5. The statements in Paragraph 5 of the Motion constitute recitations of the law and do not require a response from Debtors. To the extent Debtors’ are required to respond, Debtors deny that “cause” as recited exists. 6. The statements in Paragraph 6 of the Motion constitute recitations of the law and do not require a response from Debtors. To the extent Debtors’ are required to respond, Debtors deny that “cause” as recited exists. 7. The Debtors’ deny the allegations contained in Paragraph 7 of the Motion. 8. The Debtors’ deny the allegations contained in Paragraph 8 of the Motion. DEBTORS’ OBJECTION TO VICKI L. ULOTH’S MOTION TO MODIFY STAY

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9. The Debtors admit the allegations contained in the first sentence of Paragraph 9 of the Motion to the extent there is one defendant in the state court case who is not a Debtor. The Debtors’ deny the remaining allegations contained in Paragraph 9 of the Motion. 10. The statements in Paragraph 10 of the Motion constitute recitations of the relief requested by Uloth; accordingly, the Debtors deny that this Court should grant such relief. II. ARGUMENTS & AUTHORITIES 11. In substance, Uloth seeks relief from the automatic stay to pursue personal-injury litigation against the Debtors (the “Litigation”) in the 193rd Judicial District Court of Dallas County, Texas (the “State Court”). The Motion seeks authority to continue prosecution of the Litigation, looking to the Debtors’ and the Debtors’ Estates to satisfy any resulting award against the Debtors. Uloth is an unsecured creditor holding a contingent, unliquidated claim in connection with the Litigation. 12. Pursuant to Bankruptcy Code § 362(d)(1), a court may grant relief from the automatic stay only “for cause.” See 11 U.S.C. § 362(d)(1). The burden to make an initial showing of “cause,” is on the moving party, and “absent a showing of cause, the court should simply deny relief from the stay.” See Mazzeo v. Lenhart (In re Mazzeo), 167 F.3d 139, 142 (2d. Cir. 1999); see also In re Rexene Prods. Corp., 141 B.R. 574, 577 (Bankr. D. Del 1992) (finding that courts have interpreted 11 U.S.C. § 362(g) “as requiring that Movant establish prima facie case that cause exists to lift the stay”); In re Peregrine Sys. Inc., 314 B.R. 31, 46–47 (D. Del. 2004) (finding that moving party has the initial burden of establishing that cause exists for relief from stay). Although the Bankruptcy Code does not explicitly define the term “cause” in the context of relief from the automatic stay, “courts generally consider the policies underlying the automatic stay [and] . . . the competing interests of the debtor and the Movants.” In re Cont’l Airlines, Inc., 152 B.R. 420, 424 (D. Del. 1993). DEBTORS’ OBJECTION TO VICKI L. ULOTH’S MOTION TO MODIFY STAY

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13. Debtors assert that there is no “cause” to lift the automatic stay at this time and that Uloth has established even a prima facie case thereof. First, the Debtors, their Estates, and their creditors would be substantially prejudiced if the stay was lifted at this time. In addition to managing and operating their business as debtors-in-possession during the ongoing COVID-19 pandemic, the Debtors are focusing their efforts on both a sale process and a plan of reorganization with the goal of exiting chapter 11 within mere months. It is necessary for the Debtors to focus their efforts on their Chapter 11 Cases at this time to ensure compliance with bankruptcy obligations and to maximize value for all creditors and parties-in-interest. Allowing Uloth to proceed with the Litigation against the Debtors in State Court will divert limited human and economic resources at a critical juncture in this case. 14. Second, relief from stay is granted to an unsecured creditor only when the balance of hardships tips in the creditor’s favor. See In re U.S. Brass Corp., 173 B.R. 1000, 1006 (Bankr. E.D. Tex. 1994), modified, 176 B.R. 11 (Bankr. E.D. Tex. 1994). In the Motion, Uloth fails to identify what hardships she would suffer if not allowed to prosecute the Litigation. Further, unsecured creditors are currently projected to be out of the money in these chapter 11 cases. Assuming arguendo that Debtors’ insurance does not cover litigation costs, such litigation costs would be borne by the Debtors and would diminish the bankruptcy estate to the detriment of other creditors. Uloth’s claim is no different from any other general unsecured creditor’s and may be dealt with in the claims resolution process. 15. Third, the State Court continues to operate under a number of restrictions due to the COVID-19 pandemic that make it unlikely that Uloth will be able to have her claims adjudiciated in the State Court at any time in the near future. 16. Fourth, Uloth has not addressed the probability of her success on the merits of her claim, which is a factor courts generally consider in deciding whether to lift the stay. In re Henderson, DEBTORS’ OBJECTION TO VICKI L. ULOTH’S MOTION TO MODIFY STAY

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352 B.R. 439, 441 (Bankr. N.D. Tex. 2006); Cont’l Airlines, 152 B.R. at 424; Rexene Prods., 141 B.R. at 576; In re Peregrine Sys., Inc., 314 B.R. at 46–47. Uloth’s claim is not an open and shut tort claim, and the probability of success is uncertain. Again, because the burden to show cause is on the Movant, the failure to address this factor weighs against lifting the stay. 17. For all such reasons set forth herein, the Court should sustain this Objection and deny Uloth’s Motion seeking relief from the automatic stay. WHEREFORE, the Debtors respectfully request that this Court deny the relief requested by the Motion and award the Debtors such other and further relief as this Court may deem just and proper. DATED: January 12, 2021 Respectfully submitted, LAW OFFICES OF FRANK J. WRIGHT, PLLC By: /s/ Frank J. Wright Frank J. Wright Texas Bar No. 22028800 Jeffery M. Veteto Texas Bar No. 24098548 Jay A. Ferguson Texas Bar No. 24094648 2323 Ross Avenue, Suite 730 Dallas, Texas 75201 Telephone: (214) 935-9100 Emails: frank@fjwright.law jeff@fjwright.law jay@fjwright.law ATTORNEYS FOR STUDIO MOVIE GRILL HOLDINGS, LLC, et al. DEBTORS’ OBJECTION TO VICKI L. ULOTH’S MOTION TO MODIFY STAY

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CERTIFICATE OF SERVICE I hereby certify that on the 12th day of January 2021, a true and correct copy of the foregoing document was served on all parties consenting to electronic service of this case via the Court’s ECF system for the Northern District of Texas and via United States Mail, first class postage prepaid on the Debtors’ Service List. /s/ Jeffery M. Veteto Jeffery M. Veteto DEBTORS’ OBJECTION TO VICKI L. ULOTH’S MOTION TO MODIFY STAY