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Full title: Objection to (related document(s): 347 Notice (generic) filed by Debtor Studio Movie Grill Holdings, LLC, 364 Notice (generic) filed by Debtor Studio Movie Grill Holdings, LLC)(Limited Objection to Cure Amount Set Forth In Debtors' Cure Notice) filed by Creditor UnitedHealthcare Insurance Company. (Smiley, Rachael)

Document posted on Jan 12, 2021 in the bankruptcy, 9 pages and 0 tables.

Bankrupt11 Summary (Automatically Generated)

Doc. 335; 347; 364 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 ManagementThe Debtors’ Cure Notices reflect their intention to assume and cure amounts related to its health insurance contract with United, but the Cure Notices do not clarify whether that assumption is intended to cover the ASA for purposes of the Run-Out, the Group Policy, or both.More specifically, the Cure Notices list a contract of Debtor Movie Grill Concepts Trademark Holdings, LLC, titled “Employer application for large group” and descri

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Rachael L. Smiley Eric S. Goldstein (pro hac vice forthcoming) State Bar No. 24066158 Kathleen M. LaManna (pro hac vice FERGUSON BRASWELL forthcoming) FRASER KUBASTA PC SHIPMAN & GOODWIN LLP 2500 Dallas Parkway, Suite 600 One Constitution Plaza Plano, Texas 75093 Hartford, Connecticut 06103-1919 Telephone: 972-378-9111 Telephone: (860) 251-5000 Facsimile: 972-378-9115 Email: egoldstein@goodwin.com Email: rsmiley@fbfk.law Email: klamanna@goodwin.com Counsel for United HealthCare Services, Inc. and UnitedHealthcare Insurance Company UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION ______________________________________ : Chapter 11 IN RE: : : Case No. 20-32633-SGJ-11 MOVIE GRILL HOLDINGS, LLC., et al.,1 : : (Jointly Administered) Debtors. : : Re: Doc. 335; 347; 364 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) (together “Debtors”).

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LIMITED OBJECTION OF UNITED HEALTHCARE SERVICES, INC. AND UNITEDHEALTHCARE INSURANCE COMPANY TO CURE AMOUNT SET FORTH IN DEBTORS’ CURE NOTICE United HealthCare Services, Inc. (“UHSI”) and UnitedHealthcare Insurance Company (“UHIC” and together with UHSI, “United”) submit this limited objection to the Debtors’ Cure Notice, defined below, and the proposed assumption and assignment of certain United contracts related to employee health insurance plans. In support of this limited objection, United submits as follows: I. BACKGROUND 1. UHSI and the above captioned Debtors are parties to an Administrative Services Agreement with an effective date of September 1, 2017 (the “ASA”), pursuant to which UHSI administers the Debtors’ self-funded employee benefit health insurance plan (the “Self-Funded Plan”). Under the ASA, a bank account is established out of which allowed claims under the Self-Funded Plan are paid (the “ASA Account”). Under the ASA, the Debtors are required to periodically deposit funds to maintain a minimum balance in the ASA Account. 2. On September 1, 2020, the Debtor initiated a transition from the Self-Funded Plan to a fully insured group policy with United. 3. In connection with that transition, UHIC and the Debtors entered into a fully insured, health insurance Group Policy with an effective date of September 1, 2020 (the “Group Policy,” and, together with the ASA, the “United Contracts”). Under the Group Policy, UHIC provides group health insurance to the Debtors’ eligible employees and their eligible dependents, in exchange for a monthly premium payment. The monthly premium is due in advance on the first of each month, but subject to a 31-day grace period.

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4. As part of the transition, the ASA remains in place for the processing and payment of claims submitted under the Self-Funded Plan for services rendered on or before August 31, 2020 (the “Run-Out”). The Run-Out will continue for twelve months from the termination of the Self-Funded Plan. At the commencement of the Run-Out, the Debtors were obligated to continue funding all claims paid and maintain a minimum balance in the ASA Account of $50,000.00. 5. On October 23, 2020 (the “Petition Date”), the Debtors filed a voluntary petition in this Court under Chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”). Since the Petition Date, the Debtors have continued in possession and management of their operations. 6. On December 11, 2020, this Court entered an Order Approving (A) Bid Procedures; (B) the Form and Manner of Notice; (C) the Procedures for Determining Cure Amounts for Executory Contracts and Unexpired Leases; and (D) Granting Related Relief (the “Order”) [D.I. 335]. 7. Consistent with such Order, on December 14, 2020, the Debtors filed a Notice of Executory Contracts and Unexpired Leases Which May Be Assumed and Assigned, Pursuant to Section 365 of the Bankruptcy Code, in Connection with the Sale of Substantially All of the Debtors Assets and the Proposed Cure Amounts with Respect Thereto (the “Initial Cure Notice”) [D.I. 347]. 8. On December 21, 2020, the Debtors filed an Amended Notice of Executory Contracts and Unexpired Leases Which May Be Assumed and Assigned, Pursuant to Section 365 of the Bankruptcy Code, in Connection with the Sale of Substantially All of the Debtors’ Assets and the Proposed Cure Amounts with respect Thereto [D.I.364] (the “Amended Cure

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Notice”, and together with the Initial Cure Notice, the “Cure Notices”). 9. The Debtors’ Cure Notices reflect their intention to assume and cure amounts related to its health insurance contract with United, but the Cure Notices do not clarify whether that assumption is intended to cover the ASA for purposes of the Run-Out, the Group Policy, or both. 10. More specifically, the Cure Notices list a contract of Debtor Movie Grill Concepts Trademark Holdings, LLC, titled “Employer application for large group” and described as “Health insurance”, with “UNITED HEALTHCARE” as counterparty, on the list of contracts to be assumed and assigned, and identifies an estimated cure amount of $147,522.00 (the “Cure Amount”). [D.I. 347-1 Exhibit A and D.I. 364, p.18]. The Cure Notices do not make an express reference to the Group Policy or the ASA. 11. On January 5, 2021, the Debtors filed a Joint Disclosure Statement and Joint Plan of Reorganization for Studio Movie Grill Holdings, LLC and Jointly Administered Debtors. [Doc. 394 and 395] (the “Plan”). 12. The Plan does not reference the ASA or the Group Policy, and does not appear to budget for the payment of amounts due under either contract. 13. Section V.E. of the Plan generally provides that “Insurance Policies” are treated as Executory Contracts under the Plan and, unless otherwise provided in the Plan, and in the event of an Equitization Restructuring2 under the Plan, will be deemed assumed under the Plan on the Effective Date. It further defines “Insurance Policies” as the policies of insurance listed in the Plan Supplement, which is to be filed at a later date. 14. Commencing on or about November 30, 2020, the Debtors failed to fund the 2 Capitalized terms not otherwise defined herein shall be given the meaning assigned to them in the Plan.

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ASA Account in an amount sufficient to maintain the minimum balance and the ASA Account fell into a negative balance. As a result of the failure to fund the ASA Account, and consistent with the terms of the ASA authorizing UHSI to suspend its services until the claim funding deficiency is cured, UHSI imposed shortly thereafter a claim hold (the “Claim Hold”). While the Claim Hold will not stop the payment of claims that had been received at the time it was imposed, it will generally freeze the payment of future claims. 15. Since November 30, 2020, the Debtors have made a series of small payments that have erased the negative balance. In December 2020, UHSI offered to reduce the minimum balance of the ASA Account to $10,000.00, conditioned on the Debtors depositing funds equal to fifty percent of the claims on hold plus the $10,000.00 minimum balance. In the absence of depositing such funds into the ASA Account, UHSI has informed the Debtors it will not release the Claims Hold. To date, the Debtors have not deposited such funds into the ASA Account. 16. As of January 12, 2021, the total billed charges of the claims subject to the Claim Hold is $172,085.48,3 and the balance of funds in the ASA Account is $19,276.45. 17. As of January 12, 2021, the premium under the Group Policy for January 2021 remains outstanding in the amount of $93,247.45. II. LIMITED OBJECTION 18. The undersigned counsel for United, Shipman & Goodwin, LLP, has conferred with Debtors’ counsel in an effort to (i) obtain clarity on the Debtors’ intentions with respect to the contract(s) the Debtors intend to assume, and (ii) reconcile the Cure Amount stated in the Cure Notices. However, to date, United has been unable to obtain any 3 It is typically estimated that after adjudicating the claims subject to a claim hold and applying any network discounts, the liability to the Self-Funded Plan will be about 50% of the billed charges.

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clarity or resolve the Cure Amount. 19. United submits this limited objection to the Cure Notices to (i) clarify whether the Debtors intend to assume the ASA, the Group Policy or both; and (ii) to reserve its right to receive as a cure payment under 11 U.S.C. § 365(b) all amounts then due and owing under the Group Policy and ASA. The ASA 20. As noted above, the Debtor is currently in default under the ASA. While the ASA Account has a balance of $19,276.45 (as of January 12, 2021), this balance is insufficient to cover the claims subject to the Claim Hold. Indeed, releasing the Claim Hold now would result in the ASA Account dropping into a significant negative position in breach of the terms of the ASA. 21. UHSI has informed the Debtors that it will lift the Claim Hold if the Debtors deposit into the ASA Account fifty percent (50%) of the amount of the billed charges of claims subject to the Claim Hold, representing United’s estimate of the Self-Funded Plan’s liability for such claims after they are adjudicated, plus $10,000.00 to re-establish a minimum balance in the ASA Account. As of January 12, 2021, this would require the deposit of approximately $76,766.29 to cure this default. To the extent the Self-Funded Plan’s actual liability for the claims subject to the Claim Hold exceeds the fifty percent estimate, the Debtors would need to provide additional funding to cure such shortfall. Further, additional claims will continue to be submitted to the Self-Funded Plan, and those claims will require additional funding to bring the Debtors into compliance with the ASA’s terms. 22. In addition to funding the ASA Account, the Debtors will be liable from time

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to time for fees associated with UHSI’s administration of the Self-Funded Plan, some of which are billed in arrears. While no fees are currently past-due and owing under the ASA, UHSI reserves its right to include any fees that may subsequently come past due and owing as part of the Cure Amount. The Group Policy 23. As noted above, the January premium under the Group Policy is due and remains unpaid in the amount of $93,247.45. This amount must be paid as part of any cure. In addition, any further premium that is incurred and not paid must also be paid as part of any cure. Reservation of Rights 24. This objection is limited to the Cure Amount outstanding in connection with the United Contracts. United reserves all of its rights related to the United Contracts and reserves the right to all other objections to the assignment of such contracts, including, without limitation, the right to object to the Debtors’ provision of adequate assurance of future performance of all obligations under the contracts under Section 365 of the Bankruptcy Code. [remainder of page intentionally left blank]

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III. CONCLUSION WHEREFORE, United respectfully requests the Court enter an order (i) requiring the Debtors to clarify the reference to the United Contracts on the Cure Notices; (ii) requiring the payment of the appropriate cure amount for the respective United Contracts as described herein, and (ii) such further relief as the Court deems appropriate. Dated: January 13, 2021 Respectfully submitted, FERGUSON BRASWELL FRASER KUBASTA PC /s/ Rachael L. Smiley Rachael L. Smiley (State Bar No.24066158) 2500 Dallas Pkwy, Suite 600 Plano, Texas 75093 Tel: (972) 378-9111 Email: rsmiley@fbfk.com -and- SHIPMAN & GOODWIN LLP Eric S. Goldstein (pro hac vice forthcoming) Kathleen M. LaManna (pro hac vice forthcoming) One Constitution Plaza Hartford, Connecticut 06103-1919 Telephone: (860) 251-5000 Email: egoldstein@goodwin.com Email: klamanna@goodwin.com Counsel for United HealthCare Services, Inc. and UnitedHealthcare Insurance Company

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CERTIFICATE OF SERVICE The undersigned hereby certifies that I served or caused to be served the foregoing Limited Objection on January 13, 2020: (i) via Court ECF notification upon all parties in these cases entitled to receive such notification; and (ii) via email upon the following parties: Law Offices of Frank J. Wright Vinson & Elkins LLP, 2323 Ross Avenue, Suite 730, 2001 Ross Ave., Suite 3900 Dallas, Texas 75201 ( Dallas, Texas 75201 Attn: Frank J. Wright, Esq. and Attn: William L. Wallander, Esq. and Jeffery M. Veteto, Esq., Bradley R. Foxman, Esq., email: frank@fjwright.law and email: bwallander@velaw.com and jeff@fjwright.law bfoxman@velaw.com Pachulski Stang Ziehl & Jones LLP Norton Rose Fulbright US LLP 780 Third Avenue, 34th Floor 2200 Ross Avenue, Suite 3600 New York, NY 10017 Dallas, TX 75201 Attn: Jeffrey Pomerantz, Esq., Robert Attn: Ryan Manns, Esq., Feinstein, Esq., and Steven Golden, Esq., email: email: jpomerantz@pszjlaw.com, ryan.manns@nortonrosefulbright.com rfeinstein@pszjlaw.com, and sgolden@pszjlaw.com Jones Day Office of the United States Trustee 250 Vesey Street, Earle Cabell Federal Building New York, New York 10281 1100 Commerce Street, Room 976, Attn: John E. Mazey, Esq., Michael C. Dallas, TX 75242 Schneidereit, Esq., and Attn: Lisa L. Lambert Nicholas J. Morin, Esq. email: Lisa.L.Lambert@usdoj.gov email: jemazey@jonesday.com, mschneidereit@jonesday.com, and nmorin@jonesday.com /s/ Rachael L. Smiley Rachael L. Smiley