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Full title: Objection to (related document(s): 364 Notice (generic) filed by Debtor Studio Movie Grill Holdings, LLC)Assumption Including Cure Amount in Amended Notice of Unexpired Leases Which May be Assumed, etc. filed by Creditor Rosedale Bakersfield Retail VI, LLC. (Attachments: # 1 Exhibit Exhibit A) (Doherty, Casey)

Document posted on Jan 12, 2021 in the bankruptcy, 8 pages and 0 tables.

Bankrupt11 Summary (Automatically Generated)

Apparently sometime in August, 2020 or September, 2020, Debtor Movie Grill Concepts XX, LLC assigned the Lease to Debtor Movie Grill Concepts XXXV, LLC by a letter dated “August __, 2020.”Rosedale objects to the zero Cure Amount proposed by the Debtors in their Cure Notice in connection with the assumption and/or assignment of the Lease, which does not reflect all amounts required to be paid to cure all defaults and compensate Rosedale for all pecuniary losses sustained as a result of such defaults.In fact, as of the present date and according to Landlord Rosedale’s books and records, Rosedale is owed direct lease charges such as rent of $791,204.16 plus: (i) its legal fees incurred in these proceedings and (ii) any indemnification owed Rosedale relating to pending litigation between Debtor SMG/MGC and its general contractor, Panterra Development.2 Bankruptcy Code § 365(b)(1)(C) requires a debtor in possession, as a condition to assumption of an unexpired lease, to provide adequate assurance of future performance under such lease.Section 14.6 of the Lease provides a broad form of indemnity of Rosedale including claims relating to Debtors’ millions of dollars of requested construction work at the Premises.

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DENTONS US LLP Casey W. Doherty Texas Bar No. 24078431 1221 McKinney Street, Suite 1900 Houston, Texas 77010 Tel: (713) 658-4643 Email: Casey.Doherty@Dentons.com -and- Jess R. Bressi (admitted pro hac vice) California State Bar No. 110264 4675 MacArthur Court, Suite 1250 Newport Beach, California 92660 Tel: (949) 241-8967 Email: Jess.Bressi@Dentons.com Counsel for Rosedale Bakersfield Retail VI, LLC IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION IN RE: CASE NO. 20-32633-11 STUDIO MOVIE GRILL HOLDINGS, LLC, et al., Chapter 11 Jointly Administered OBJECTION OF ROSEDALE BAKERSFIELD RETAIL VI, LLC TO ASSUMPTION INCLUDING CURE AMOUNT IN AMENDED NOTICE OF UNEXPIRED LEASES WHICH MAY BE ASSUMED, ETC. (Ref. Doc. 364) TO THE HONORABLE STACY G. C. JERNIGAN UNITED STATES BANKRUPTCY JUDGE: Rosedale Bakersfield Retail VI, LLC (“Rosedale”), a lessor, creditor and party in interest, respectfully objects to the Debtors’ Amended Notice of Executory Contracts and Unexpired Leases Which May Be Assumed, etc., filed December 21, 2020, as Document No. 364 (the “Cure Notice”), and respectfully represents:

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I. FACTUAL BACKGROUND 1. Rosedale is the landlord of an unexpired lease with one of the Debtors’ entities, Movie Grill Concepts XXXV, LLC, as assignee of Movie Grill Concepts XX, LLC. Movie Grill Concepts XXXV, LLC is the tenant of 46,311 square feet of space in the Rosedale Village Shopping Center, 2733 Calloway Dr., Bakersfield, CA 93312 (the “Premises”) in which Movie Grill Concepts XXXXV operates a dine in movie theater business, pursuant to the terms of a written shopping center Lease dated December 30,2016 (the “Lease”). 2. Apparently sometime in August, 2020 or September, 2020, Debtor Movie Grill Concepts XX, LLC assigned the Lease to Debtor Movie Grill Concepts XXXV, LLC by a letter dated “August __, 2020.” Neither of these Debtors requested Landlord’s consent to the assignment because they claimed that the assignment was a “Permitted Transfer” pursuant to Section 12.4(ii) of the Lease which permits a Transfer to “(ii) to any subsidiary corporation or “affiliate” (as herein defined) of Tenant, or Tenant’s parent corporation.” Rosedale does not know if this is true or not but assumes that it is for the limited purposes of this objection. 3. About one month before these bankruptcies were filed, on or about September 25, 2020, Rosedale and Debtor Movie Grill Concepts XXXV, LLC entered a letter agreement to amend the Lease to address the COVID-19 impacts on the theatre and to give Debtor substantial economic relief. Among other things, under the terms of this lease amendment, Rosedale and Debtor Movie Grill Concepts XXXV, LLC agreed to defer payment of 100% of the rent due for the eight months from March 1, 2020 to October 31, 2020 to be repaid over 36 months commencing November 1, 2020. Rosedale and Debtor Movie Grill Concepts XXXV, LLC also agree to defer 50% of the rent due for November and December 2020. These cases were then filed on October 23, 2020.

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4. One month after Debtors filed these cases, on November 23, 2020, Rosedale was advised by the Debtors’ lease advisor, Keen-Summit Capital Partners LLC, that Debtors were apparently repudiating the September 25, 2020 lease amendment: “[t]he terms agreed to prior to bankruptcy [i.e., the September 25, 2020 lease amendment letter] do not work. If they did, the company would not have had to file bankruptcy. We would like to remain in your location but need some assistance. If you want to keep us, I assume we can find a mutual agreement. I’d hate to have SMG remove all of their equipment and reject the lease but if we can’t come to terms that is a possibility.”1 While negotiations are presently underway between Debtors and Rosedale over a modification of the Lease, it is unknown at this time if an agreement will be reached so this objection is required to be filed. II. THE DEBTORS MUST CURE ALL EXISTING DEFAULTS OR PROVIDE ADEQUATE ASSURANCE OF PROMPT CURE 5. Rosedale objects to the zero Cure Amount proposed by the Debtors in their Cure Notice in connection with the assumption and/or assignment of the Lease, which does not reflect all amounts required to be paid to cure all defaults and compensate Rosedale for all pecuniary losses sustained as a result of such defaults. Bankruptcy Code § 365(b) governs the financial obligations of a debtor that wishes to assume and assign a lease. As a condition to the assumption of an unexpired lease, § 365(b) requires that the Debtors “cures, or provides adequate assurance” of a prompt cure and “compensates, or provides adequate assurance that 1 A debtor cannot remove or sell that it does not own. Under the terms of the Lease, Landlord Rosedale owns ALL of the FF&E other than the digital projectors. More specifically, Section 4.7 of the Lease provides:“4.7 Theater FF&E Ownership. Landlord shall be deemed to be the owner of the Theatre FF&E except for the digital projection equipment. Tenant shall have the right to use Theatre FF&E during the Term of the Lease.” Rosedale objects to any proposed sale that it seeks to sell the FF&E that Debtors do not own.

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the trustee will promptly compensate, a party other than the debtor to such contract or lease, for any actual pecuniary loss to such party resulting from such default.” 6. “Section 365(b)(1) is intended to provide protection to the non-debtor lessor to insure that he receives the full benefit of his bargain in the event of assumption.” In re Bon Ton Restaurant & Pastry Shop, Inc., 53 B.R. 789, 793 (Bankr. N.D. Ill. 1985). Indeed, “the cost of assumption is nothing short of complete mutuality and requires performance in full as if bankruptcy had not intervened.” In re Frontier Properties, Inc., 979 F.2d 1358, 1367 (9th Cir. 1992). Bankruptcy Code section 365(b)(1)(A) “clearly and unambiguously” requires the cure of all defaults before an unexpired lease of nonresidential real property may be assumed. In re Building Block Child Care Centers, Inc. (9th Cir. BAP 1999) 234 B.R. 762, 765. III. NOTWITHSTANDING FAILING TO PAY RENT FOR EIGHT MONTHS, DEBTORS HAVE NOT LISTED ANY AMOUNT OF CURE DUE TO ROSEDALE. 7. In the Cure Notice, Debtors list no amount as due Rosedale for cure. See Exhibit A to Cure Notice, Document 364, cm/ecf page number 17 of 21. In fact, as of the present date and according to Landlord Rosedale’s books and records, Rosedale is owed direct lease charges such as rent of $791,204.16 plus: (i) its legal fees incurred in these proceedings and (ii) any indemnification owed Rosedale relating to pending litigation between Debtor SMG/MGC and its general contractor, Panterra Development.2 See Exhibit A hereto, Aged Delinquencies/Ledger History. The zero cure amount shown in the Cure Notice directly conflicts with Debtor MGC XXXV’s own sworn Schedule E/F, filed 2In its Schedule A/B filed November 13, 2020, Debtor MGC XXXV lists the litigation and a disgorgement claim against Panterra Development as an asset of the bankruptcy estate with the amount requested as $7,200,000. See Case No. 20-326677, cm/ecf Document 7, Schedules, page 23 of 74, Response to Question 74.1.

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November 13, 2020, as Document 7, Case No. 20-326677, cm/ecf page 44 of 74, Creditors Who Have Unsecured Claims, that lists Rosedale as being owed $792,066.63 or $863.47 more than the rent charges Rosedale’s reflected in books and record, see Exhibit A hereto. 8. When counsel for Rosedale brought this discrepancy to the attention of Debtors’ counsel, he was told that “ . . . . the “no cure” listing is based upon the Sept. 2020 lease amendment, which deferred the rent. SMG has been paying based upon the amended terms.” Of course, Debtor has not yet assumed the Lease, as amended by the September 25, 2020 letter agreement but, more importantly, deferring payment of the cure does not obviate the need for the cure, only modifies the terms of payment of the cure. 9. Paragraph 11 of the Cure Notice provides in all capital letter emphasis what may be fairly characterized colloquially as Debtors’ “scream or die” warning to landlords: object or you shall “BE FOREVER BARRED FROM OBJECTING TO THE CURE AMOUNTS AND FROM ASSERTING ANY ADDITIONAL CURE OR OTHER AMOUNTS . . . .,” etc., ad nauseum. Thus, it is little comfort for Debtors’ counsel to refer to a lease amendment repudiated by Keen-Summit and a Lease that have not yet been assumed and which have over three-quarters of a million dollars of defaults thereunder. IV. THE DEBTORS HAVE NOT PROVIDED PROOF OF ADEQUATE ASSURANCE OF FUTURE PERFORMANCE 10. Bankruptcy Code § 365(b)(1)(C) requires a debtor in possession, as a condition to assumption of an unexpired lease, to provide adequate assurance of future performance under such lease. “Section 365(b)(1) is intended to provide protection to the non-debtor lessor to insure that he receives the full benefit of his bargain in the event of assumption.”

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In re Bon Ton Restaurant & Pastry Shop, Inc., 53 B.R. 789, 793 (Bankr. N.D. Ill. 1985); accord, In re Valley View Shopping Center, L.P., 260 B.R. 10, 25 (Bankr. D. Kansas 2001). 11. To date, Debtors have not provided Rosedale any evidence of adequate assurance which is understandable due to the uncertainty over the identity of the ultimate assignee or buyer of the Lease. Nevertheless, unless and until Rosedale is provided with clear evidence of the financial wherewithal of the existing or proposed new tenant, the Court should not approve any assumption and assignment. Any evidence of adequate assurance should be sent to co-counsel for Rosedale, Jess R. Bressi. V. THE DEBTORS CANNOT LIMIT OR IMPAIR THEIR LEASE INDEMNITY OBLIGATIONS 12. Section 14.6 of the Lease provides a broad form of indemnity of Rosedale including claims relating to Debtors’ millions of dollars of requested construction work at the Premises. As noted above, Debtors scheduled a litigation claim against its general contractor, Panterra Development, relating to the construction of the Premises as an asset of the bankruptcy estate. Any assumption should expressly recognize that Rosedale is owed indemnification relating to this litigation. 13. Further, the Debtors and any assignee of the Debtors are subject to the terms and conditions thereof as written and without modification or cum onere. NLRB v. Bildisco & Bildisco, 465 U.S. 513, 531 (1984). Furthermore, under § 365 of the Bankruptcy Code, the Debtors can only assume what rights they have under the Lease. VI. JOINDER IN OBJECTIONS 14. Rosedale joins in the objections to the proposed assumption and assignment of Debtors’ unexpired leases filed by Debtors’ other landlords and adopts the arguments and

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authorities advanced in such objections to the extent not inconsistent with Rosedale’s position. VII. RESERVATION OF RIGHTS 15. Rosedale reserves all of its rights, including without limitation its rights under Sections 365 and 503 of the Bankruptcy Code. VIII. CONCLUSION Wherefore, Rosedale Bakersfield Retail VI, LLC objects to any assumption and/or assignment of the Lease unless and until a proper cure amount is agreed to by Debtors or determined by the Court and adequate assurance of future performance is provided. Respectfully submitted, DENTONS US LLP By: /s/ Casey W. Doherty Casey W. Doherty Texas Bar No. 24078431 1221 McKinney Street, Suite 1900 Houston, Texas 77010 Tel: (713) 658-4643 Email: Casey.Doherty@Dentons.com -and- DENTONS US LLP By: /s/ Jess R. Bressi Jess R. Bressi (Admitted pro hac vice) California State Bar No. 110264 4675 MacArthur Court, Suite 1250 Newport Beach, CA 92660 Tel: (949) 241-8967 Email: Jess.Bressi@Dentons.com Counsel for Rosedale Bakersfield Retail VI, LLC

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CERTIFICATE OF SERVICE I certify that true copies of this Objection were served on all parties who have entered an appearance here in by means of the court's CM/ECF System, contemporaneously with filing on January 13, 2021. /s/ Casey W. Doherty Casey W. Doherty