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Full title: Objection to (related document(s): 406 Motion to sell property free and clear of liens under Section 363(f) / Debtors' Expedited Motion for Entry of an Order Authorizing Sale Procedures for Sale of Personal Property Assets Free and Clear of All Liens, Claims, and Encumbrances an filed by Debtor Studio Movie Grill Holdings, LLC) filed by Creditor Bwana Theater Partners, LLC. (Attachments: # 1 Exhibit 1 # 2 Exhibit 2) (Kathman, Jason)

Document posted on Jan 12, 2021 in the bankruptcy, 7 pages and 0 tables.

Bankrupt11 Summary (Automatically Generated)

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 ManagementBWANA THEATER PARTNERS, LLC’S OBJECTION TO DEBTORS’ EXPEDITED MOTION FOR ENTRY OF AN ORDER AUTHORIZING SALE PROCEDURES FOR SALE OF PERSONAL PROPERTY ASSETS FREE AND CLEAR OF ALL LIENS, CLAIMS, AND ENCUMBRANCES AND INTERESTS TO THE HONORABLE STACEY G. C. JERNIGAN, UNITED STATES BANKRUPTCY JUDGE: Bwana Theater Partners, LLC (“Bwana”), a creditor and party in interest in the above-referenced bankruptcy case, through counsel, files this its However, De

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Anthony J. Kochis Jason P. Kathman Pro Hac Vice State Bar No. 24070036 WOLFSON BOLTON PLLC SPENCER FANE LLP 3150 Livernois, Suite 275 5700 Granite Parkway, Suite 650 Troy, Michigan 48083 Plano, Texas 75024 (248) 247-7105 – Telephone (927) 324-0300 – Telephone (248) 247-7099 – Facsimile (972) 324-0301 – Facsimile akochis@wolfsonbolton.com jkathman@spencerfane.com COUNSEL FOR COUNSEL FOR BWANA THEATER PARTNERS, LLC BWANA THEATER PARTNERS, LLC UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION In re: Chapter 11 STUDIO MOVIE GRILL HOLDINGS, LLC, et Case No. 20-32633-SGJ al., (Jointly Administered) Debtor.1 / 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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BWANA THEATER PARTNERS, LLC’S OBJECTION TO DEBTORS’ EXPEDITED MOTION FOR ENTRY OF AN ORDER AUTHORIZING SALE PROCEDURES FOR SALE OF PERSONAL PROPERTY ASSETS FREE AND CLEAR OF ALL LIENS, CLAIMS, AND ENCUMBRANCES AND INTERESTS TO THE HONORABLE STACEY G. C. JERNIGAN, UNITED STATES BANKRUPTCY JUDGE: Bwana Theater Partners, LLC (“Bwana”), a creditor and party in interest in the above-referenced bankruptcy case, through counsel, files this its Objection to Debtors’ Expedited Motion For Entry Of An Order Authorizing Sale Procedures For Sale Of Personal Property Assets Free And Clear Of All Liens, Claims, And Encumbrances And Interests (“Motion”) [Docket No. 406], and in support of its Objection represents as follows: PRELIMINARY STATEMENT 1. Bwana does not question the business judgment decision of a debtor to sell its personal property. However, Debtors’ Motion seeks authority to sell personal property at rejected theater locations and there are at least three issues with Debtors’ Motion: (1) prior Orders entered by the Court rejecting leases contain abandonment language and Debtors may not utilize the Court to sell personal property that Debtors have abandoned; (2) Debtors’ Motion contains no specific description of what personal property Debtors intends to sell and, at least with respect to Bwana, all of the personal property at Bwana’s theater location belongs to Bwana and not Debtors; and (3) Debtors’ Motion does not specify where the contemplated sales will occur and the language of the proposed Order suggests that Debtors may intend to impermissibly utilize rejected theater locations to conduct these sales. For all of these reasons and those discussed more fully below, Bwana requests that this Objection be sustained and the Motion denied.

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JURISDICTION AND VENUE 2. The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334. 3. This is a core proceeding under 28 U.S.C. § 157(b). 4. Venue is proper in this district under 28 U.S.C. §§ 1408 and 1409. 5. Debtors’ cases are being jointly administered. RELEVANT FACTUAL BACKGROUND 6. Bwana is the owner of a 65,186 square foot, 14 screen theater location at 210 W. 87th Street, Chicago, Illinois (the “Chicago Theater”). 7. Bwana and Debtor Movie Grill Concepts XXVI LLC are parties to a Motion Picture Theatre Lease regarding the Chicago Theater. A copy of the Bwana lease is attached as Exhibit 1. 8. Debtors commenced their Chapter 11 cases on October 23, 2020. 9. Debtors immediately moved on October 23, 2020 to reject the lease of the Chicago Theater on an emergency and expedited basis. [Docket No. 33]. 10. A hearing was conducted on October 23, 2020 where the motion to reject was granted. 11. The Court entered its Order Granting Expedited Motion for Order Under Section 365 and 554 of the Bankruptcy Code (I) Authorizing the Debtors to Reject Certain Unexpired Commercial Real Property Leases Effective as of October 23, 2020; and (II) Granting Related Relief (the “Order Rejecting”) [Docket No. 101]. 12. The Order Rejecting authorized the abandonment of Debtors’ personal property remaining at the Chicago Theater:

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Subject to the prior written consent of the DIP Agent and the Requisite Lenders (as defined in the DIP Order), pursuant to Bankruptcy Code § 554, any property remaining on the premises of the Leases after surrender shall be deemed abandoned as of October 26, 2020, including, without limitation, equipment, fixtures, furniture, and other personal property that may be located on, or have been installed in, the premises that are the subject of the Leases (the “Abandoned Property”). [Docket No. 101, ¶ 3]. 13. Bwana has brought a separate motion before the Court requesting that the Order Rejecting be modified such that Bwana be permitted to utilize or dispose of abandoned property in its sole discretion without consent of the Debtors or the Lenders and that other personal property (such as firm alarm codes and internal door keys) be abandoned by Debtor and turned over to Bwana. [Docket No. 408]. Bwana’s motion remains pending before the Court. 14. Bwana has filed a proof of claim against Debtor Movie Grill Concepts XXVI LLC relating to its lease rejection damages, which claim exceeds $2.6 million. [Case No. 20-32689, Claim No. 1]. ARGUMENT A. Debtors May Not Sell Abandoned Property Under § 363 15. The Order Rejecting authorizes the abandonment by Debtors of personal property remaining at the Chicago Theater. 16. The impact of abandonment under § 554 is that abandoned property ceases being property of the estate and cannot be administered by a trustee or debtor-in-possession. See generally, In re Dewsnup, 908 F.2d 588, 590 (10th Cir. 1990). Accordingly, Debtors may not utilize § 363 (or the Court) to sell property that has been abandoned. 17. Debtors may assert that the personal property at rejected theater locations was not abandoned because a condition precedent in the Order Rejecting was not satisfied: “Subject to

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the prior written consent of the DIP Agent and the Requisite Lenders . . . any property remaining on the premises of the Leases after surrender shall be deemed abandoned as of October 26, 2020”. [Docket No. 101, ¶ 3]. However, this argument raises at least two issues. First, by granting the motion to reject and entering the Order Rejecting, did the Court contemplate that personal property would be in a state of limbo unless and until Debtors’ lenders consented to abandonment?2 Second, assuming that this was the intention of the Court, lessors such as Bwana are entirely in the dark as to whether Debtors’ lenders have consented to abandonment because there is no notice mechanism or other procedure by which parties in interest are advised of a final disposition of the property. Indeed, it could be the case that Debtors’ lenders have already consented to abandonment, but lessors such as Bwana have no means of ascertaining the same. B. Bwana, Not Debtors, Owns The Personal Property At The Chicago Theaters 18. The description of the property intended to be sold by Debtors is as follows: “personal property assets located at the premises of unexpired nonresidential real property leases that have been rejected by the Debtors[.]” [Docket No. 406-1, ¶ 1]. This description fails to provide sufficient clarity with respect to what property Debtors intend to sell. 19. And, this is problematic because Debtors cannot sell that which they do not own. 20. Even assuming that Debtors can overcome the abandonment hurdle discussed above, Bwana, not Debtors, owns all of the personal property and furniture, fixtures, and equipment (collectively, “FF&E”) at the Chicago Theater. 21. Indeed, Bwana granted to Debtor a right to use the FF&E owned by Bwana while Debtor was in possession of the Chicago Theater. (Exhibit 1, Section 4.04). 2 Indeed, this is one of the reasons why Bwana filed its currently pending Bwana Theater Partners, LLC’s Motion (I) To Compel Abandonment Of Property; (II) To Amend Or Clarify Order Rejecting Leases; And (III) For Further Relief. [Docket No. 408].

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22. And, with respect to any personal property that Debtor may have owned and brought into the Chicago Theater, Debtor contractually agreed to forfeit possession and title of such personal property to Bwana in the event it ceased occupying the Chicago Theater. (Exhibit 1, Section 16.07).3 Due to Debtor’s abandonment of the Chicago Theater, its right to possession was terminated pre-petition. (Exhibit 2). 23. Accordingly, Bwana, not Debtor, owns all of the personal property located at the Chicago Theater (which personal property is in the exclusive possession of Bwana). 24. Bwana does not consent to the sale of any of its personal property and the property does not constitute property of the estate under § 541. C. Debtors May Not Utilize The Chicago Theater To Sell Property 25. Debtors’ Motion does not expressly state where it intends to conduct sales of personal property, but suggests that Debtors may intend to utilize rejected theater locations to accommodate Debtors’ sale efforts. See Docket No. 406-1, ¶ 1 (“to sell personal property assets located at the premises of unexpired nonresidential real property leases that have been rejected by Debtors[.]” (emphasis added). 26. Simply stated, Bwana does not consent to utilization of its real property by Debtors to conduct a sale of assets. Debtors’ right to possession of the Chicago Theater was terminated pre-petition, Debtors have no present right to occupy the Chicago Theater, and conducting a sale of property at the Chicago Theater is not a permitted use of the property under Debtors’ lease. (Exhibits 1). WHEREFORE, Bwana respectfully requests that the Court sustain this Objection, deny the Motion, and award Bwana such additional relief that is just and equitable. 3 Bwana further submits that these provisions governing FF&E are commonplace in the movie theater industry and Bwana believes that the issue it is identifying is likely applicable to other landlords in this case.

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Dated: January 13, 2021. Respectfully submitted, /s/ Jason P. Kathman Jason P. Kathman State Bar No. 24070036 SPENCER FANE LLP 5700 Granite Parkway, Suite 650 Plano, Texas 75024 (972) 324-0300- Telephone (972) 324-0301 – Facsimile Email: jkathman@spencerfane.com And Anthony J. Kochis (P72020) Admitted Pro Hac Vice WOLFSON BOLTON PLLC 3150 Livernois, Suite 275 Troy, MI 48083 Telephone: (248) 247-7105 Facsimile: (248) 247-7099 Email: akochis@wolfsonbolton.com COUNSEL FOR BWANA THEATER PARTNERS, LLC