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Full title: Objection to (related document(s): 364 Notice (generic) filed by Debtor Studio Movie Grill Holdings, LLC) filed by Creditor HMC Lewisville TC, LLC. (Attachments: # 1 Exhibit A) (Drawhorn, Lauren)
Document posted on Jan 12, 2021 in the bankruptcy, 5 pages and 0 tables.
Bankrupt11 Summary (Automatically Generated)
On December 21, 2020, the Debtors filed their 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 TheretoPrior to any proposed assumption and assignment of the Lease, the Debtors are required to cure all outstanding defaults pursuant to Bankruptcy Code section 365(b)(1).In addition, Bankruptcy Code section 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.To date, HMC has not received any evidence of adequate assurance with respect to the Debtors, the Reorganized Debtors, or their proposed assignees and HMC reserves all rights in this regard.WHEREFORE, based on the foregoing, HMC respectfully requests that (i) any order authorizing the assumption of the Lease be consistent with this Objection; (ii) require the Debtors pay HMC the Corrected Cure Amount set forth herein; (iii) requires the Debtors provide HMC adequate assurance information; and (iv) grant HMC such further relief to which it may be entitled at law or in equity.
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IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION IN RE: § § Case No. 20-32633-SGJ STUDIO MOVIE GRILL HOLDINGS, § CHAPTER 11 LLC., et al., § § Jointly Administered Debtors. OBJECTION TO DEBTORS’ PROPOSED CURE AMOUNT HMC Lewisville TC, LLC, (“HMC”) files this Objection (“Objection”) to Debtors’ Proposed Cure Amount, as set forth in the 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 [Docket No. 364] and respectfully states as follows: I. BACKGROUND 1. On October 23, 2020 (the “Petition Date”), Movie Grill Concepts XXXVI, LLC (“Movie Grill”) and its debtor affiliates (collectively, the “Debtors”) filed their voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Northern District of Texas (“Court”). The cases are jointly administered under Case No. 20-32633-SGJ. 2. Prior to the Petition Date, on or around March 6, 2014, Movie Grill entered into a lease agreement with HMC for premises located in Lewisville Towne Crossing, Lewisville, Texas (as subsequently amended and restated, the “Lease”). The Lease is a lease of real property in a shopping center for purposes of 11 U.S.C. § 365(b)(3).Page 2
3. Under the Lease, Movie Grill is responsible for payment of (i) monthly rent; (ii) its proportionate share of the common area maintenance (“CAM”) charges, and (iii) its proportionate share of the real estate taxes (“RET”). 4. On December 12, 2020, the Debtors filed their 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 [Docket No. 347]. On December 21, 2020, the Debtors filed their 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 [Docket No. 364] (the “Assumption Notice”), which superseded and replaced the original assumption notice. Exhibit A to the Assumption Notice identifies landlords and stores for which the Debtors have unexpired leases and states the Debtor’s estimated cure amounts with respect to each lease. The Assumption Notice identifies the Lease and a proposed cure amount of $0.00 (the “Proposed Cure Amount”). The Assumption Notice further provides that any counterparty to an unexpired lease or executory contract must file their objection to the Debtors’ proposed cure amount on or before January 13, 2020 at 4:00 p.m. (CT). II. OBJECTION 5. Prior to any proposed assumption and assignment of the Lease, the Debtors are required to cure all outstanding defaults pursuant to Bankruptcy Code section 365(b)(1). 11 U.S.C. § 365(b)(1). The Debtors must also compensate the Landlord for any pecuniary losses under the Lease. 11 U.S.C. § 365(b)(1)(B). 6. HMC objects to the Proposed Cure Amount because it does not take into account past due rent, real property tax and various other obligations expressly provided in the Lease. ThePage 3
amount outstanding as of the date of this Objection is $213,989.32. These amounts are set forth on the Account Summary attached hereto as Exhibit A. 7. Based upon the correct amount outstanding, as set forth in Exhibit A, the actual cure amount under the Lease is at least $213,989.32 (the “Corrected Cure Amount”). 8. HMC requests that the Proposed Cure Amount be corrected and, if assumed and assigned, the Correct Cure Amount be paid. In addition to the Corrected Cure Amount detailed herein, as well as any amount accruing between the date of this Objection and the date of assumption, there are accruing charges under the Lease that are subject to year-end adjustment and reconciliation that have not yet been billed under the Lease. HMC continues to be responsible for all such accrued and accruing charges under the Lease when they are billed. Any assignee must also take the assignment of the Lease subject to its terms and pay all obligations owing under the Lease, including obligations that have accrued but may not have yet been billed under the Lease. 9. In addition, Bankruptcy Code section 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. 11 U.S.C. § 365(b)(1)(C). In addition, Bankruptcy Code section 365(f)(2)(A) provides that assumption of an unexpired lease is a necessary precedent to an assignment of such lease. 11 U.S.C. § 365(f)(2)(A). To date, HMC has not received any evidence of adequate assurance with respect to the Debtors, the Reorganized Debtors, or their proposed assignees and HMC reserves all rights in this regard. HMC specifically requests the Debtor provide it with such adequate assurance information. III. RESERVATION OF RIGHTS 10. HMC reserves all rights to amend and/or supplement this Objection, including, without limitation, adding any obligations that accrue, arise, or are related to the pre-assumption and assignment period that subsequently becomes known to HMC. HMC further reserves its rightsPage 4
to raise any additional objections to any assumption and assignment of the Lease, including the ability of any proposed assignee to perform and to provide the necessary adequate assurance information. HMC expressly reserves all rights and remedies at law or in equity against Movie Grill and nothing in this Objection is intended or should be construed to limit HMC’s rights, remedies, or interests with respect to the Lease. IV. CONCLUSION WHEREFORE, based on the foregoing, HMC respectfully requests that (i) any order authorizing the assumption of the Lease be consistent with this Objection; (ii) require the Debtors pay HMC the Corrected Cure Amount set forth herein; (iii) requires the Debtors provide HMC adequate assurance information; and (iv) grant HMC such further relief to which it may be entitled at law or in equity. Respectfully submitted, /s/ Lauren K. Drawhorn Jason M. Rudd Tex. Bar No. 24028786 Lauren K. Drawhorn Tex. Bar No. 24074528 Scott D. Lawrence Tex. Bar No. 24087896 WICK PHILLIPS GOULD & MARTIN, LLP 100 Throckmorton Street, Suite 1500 Fort Worth, Texas 76102 Telephone: (817) 984-7423 Fax: (817) 332-7789 Email: jason.rudd@wickphillips.com lauren.drawhorn@wickphillips.com scott.lawrence@wickphillips.com COUNSEL FOR HMC LEWISVILLE TC, LLCPage 5
CERTIFICATE OF SERVICE The undersigned certifies that a true and correct copy of the foregoing document was served on January 13, 2021, by electronic filing in the CM/ECF system of the United States Bankruptcy Court for the Northern District of Texas, which will send notification of such filing to all registered parties in interest. /s/ Lauren K. Drawhorn Lauren K. Drawhorn
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