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Full title: Supplemental Objection to (related document(s): 17 Motion to reject executory contract or unexpired lease filed by Debtor Studio Movie Grill Holdings, LLC)SEC CTR & MCP, LP's Supplemental Limited Objection to the Debtors' Second Motion to Reject Unexipred Leases filed by Creditor SEC CTR. (Stull, J.)

Document posted on Jan 16, 2021 in the bankruptcy, 8 pages and 0 tables.

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No. 390] (the “Agreed Order”) by which the parties generally agreed (among other things) that: (a) the hearing with respect to rejection of the Chisholm Trail Lease would be continued to allow the parties additional time to negotiate possible assumption of the lease, (b) the Debtors would immediately pay post-petition November and December 2020 rent due under the Amendment, (c) the Debtors would continue to pay post-petition rent through January 31, 2021, which rent would be 8% of gross sales, and (d) the Debtors would not seek to retroactively reject the Chisholm Trail Lease pursuant to the Motion to Reject. Assuming the Chisholm Trail Lease is rejected effective as of January 31, 2021, the Debtors clearly intend to (a) access the Premises after the rejection effective date, and (b) sell abandoned personal property from the Premises, potentially pursuant to a sale process involving appraisers, auctioneers and/or on-site viewings of the personal property—all without (x) paying rent or providing other quid pro quo to the Landlord, (y) indemnifying the Landlord for incidents or other issues that may arise while accessing the Premises, or (z) having any other protocol with regard to timely performing sales in a manner that properly compensates and protects the Landlords.Any order entered rejecting the Chisholm Trail Lease should contain express provisions either (a) ordering that personal property at the Premises is abandoned as of the rejection effective date, or (b) if abandonment of such property is effective subsequent to the rejection effective date, (i) requiring payment of contractual rent for such limited post-rejection period, (ii) indemnifying the Landlord, and (iii) establishing other specific protocols to protect the Landlord.To be sure, the Debtors should have to make a decision, to either (a) reject the Chisholm Trail Lease effective as of January 31, 2021, remove personal property they do not intend to abandon prior to January 31, 2021, and abandon all property thereafter remaining, or (b) pay contractual rent pursuant to the terms of the Chisholm Trail Lease if they want to continue to access the Premises in February 2021 (or thereafter), regardless of whether access is for continued operations or to warehouse and conduct sales of personal property.The terms of the Debtors’ past rejection orders entered in these cases and the proposed procedures for the sale of certain personal property would prevent the Landlord from marketing the Premises for re-letting to other tenants and potentially expose the Landlord to unnecessary liability.

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Michael S. Held State Bar No. 09388150 J. Machir Stull State Bar No. 24070697 JACKSON WALKER LLP 2323 Ross Avenue, Suite 600 Dallas, TX 75201 Telephone: (214) 953-6000 Facsimile: (214) 953-5822 Email: mheld@jw.com Email: mstull@jw.com ATTORNEYS FOR SEC CTR & MCP, LP IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION IN RE: § § Studio Movie Grill Holdings, LLC, et al., § Case No. 20-32633-SGJ-11 § § Debtors-in-Possession. § (Jointly Administered) SEC CTR & MCP, LP’S SUPPLEMENTAL LIMITED OBJECTION TO THE DEBTORS’ SECOND MOTION TO REJECT UNEXPIRED LEASES SEC CTR & MCP, LP’S (the “Landlord”), a landlord and party in interest, hereby files this Supplemental Limited Objection (the “Supplemental Objection”) with regard to the Debtors’ Second Motion for Entry of an 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 [Dkt. No. 17] (the “Motion to Reject”).1 In support thereof, the Landlord would show as follows: 1 Capitalized and undefined terms in this Supplemental Objection are defined in the Motion to Reject.

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I. BACKGROUND A. The Lease 1. Prior to the filing of these bankruptcy cases, the Landlord and Debtor Movie Grill Concepts XLIV, LLC were parties to that certain (a) Lease Between SEC CTR & MCP, LP, a Texas Limited Partnership, Landlord, and Movie Grill Concepts XLIV, LLC, Tenant, dated November 8, 2018 (the “Lease”), and (b) First Amendment to Lease, dated September 30, 2020 (the “Amendment” and together with the Lease, the “Chisholm Trail Lease”). 2. The Chisholm Trail Lease relates to certain real property consisting of approximately 40,000 square feet and 12 auditorium movie theaters, located at 5413 Sierra Springs Lane, Fort Worth Texas 76123 (the “Premises”). 3. Generally, the Amendment reduced the monthly rent to a nominal percentage of gross sales at the Premises, which reduction expired on December 31, 2020. Upon the expiration of the Amendment, monthly rent at the Premises would be at least $81,666.67.2 As set forth below, pursuant to the Agreed Order (defined below), the parties agreed to extend the percentage of gross sales rent concept an additional month, through January 2021. 4. On Friday, January 15, 2021, the Court held hearings (the “Hearings”) on the Motion to Reject and on the Debtors’ expedited motion to sell personal property [Dkt. No. 406] (the “Sale Motion”). At the Hearings, the Debtors’ representative confirmed through testimony that theaters at the Premises remain open and operational to this day. B. Procedural Background 5. On October 23, 2020, the Debtors filed this bankruptcy (the “Petition Date”). Also on the Petition Date, the Debtors filed the Motion to Reject, by which the Debtors have already 2 Not including additional triple net expenses. All rights are reserved.

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rejected many leases nunc pro tunc to the Petition Date. Generally, the Debtors have argued to the Court that retroactive rejection is proper in this case because (a) the theaters for certain rejected leases were not operational post-petition due to Covid-19, and (b) retroactive rejection would allow the Debtors to avoid paying unnecessary post-petition rent. 6. On December 3, 2020, the Landlord filed its first limited objection to the Motion to Reject, arguing (among other things) that because theaters at the Premises continue to be operational, retroactive rejection is improper.3 7. On December 31, 2020, the Debtors and the Landlord agreed to the entry of an agreed order [Dkt. No. 390] (the “Agreed Order”) by which the parties generally agreed (among other things) that: (a) the hearing with respect to rejection of the Chisholm Trail Lease would be continued to allow the parties additional time to negotiate possible assumption of the lease, (b) the Debtors would immediately pay post-petition November and December 2020 rent due under the Amendment, (c) the Debtors would continue to pay post-petition rent through January 31, 2021, which rent would be 8% of gross sales, and (d) the Debtors would not seek to retroactively reject the Chisholm Trail Lease pursuant to the Motion to Reject. 8. Notwithstanding the additional time during which the parties attempted to negotiate potential assumption, the Debtors have decided to reject the Chisholm Trail Lease, with such rejection proposed to be effective as of January 31, 2021. 9. Continued hearings on both the Motion to Reject (as to the Chisholm Trail Lease) and the Sale Motion have been set for January 20, 2021. Testimony at the Hearings, however, made clear that upon entry of an order on the Sale Motion, the Debtors hope to sell personal property from leased premises after the rejection effective date of such leases. 3 The Landlord’s first limited objection [Dkt. No. 290] is incorporated herein by reference. Out of an abundance of caution, the Landlord also incorporates by reference its objection to the Sale Motion [Dkt. No. 485].

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10. Assuming the Chisholm Trail Lease is rejected effective as of January 31, 2021, the Debtors clearly intend to (a) access the Premises after the rejection effective date, and (b) sell abandoned personal property from the Premises, potentially pursuant to a sale process involving appraisers, auctioneers and/or on-site viewings of the personal property—all without (x) paying rent or providing other quid pro quo to the Landlord, (y) indemnifying the Landlord for incidents or other issues that may arise while accessing the Premises, or (z) having any other protocol with regard to timely performing sales in a manner that properly compensates and protects the Landlords. II. SUPPLEMENTAL OBJECTION 11. Testimony elicited at the Hearings made clear that the Debtors intend to (a) reject the Chisholm Trail Lease, and (b) cease paying rent for the Chisholm Trail Lease, each effective as of January 31, 2021. Additional testimony with respect to the Sale Motion made clear that the Debtors intend to access and otherwise utilize the Premises after the rejection effective date in an effort to sell certain property. 12. The Debtors cannot simply reject the Chisholm Trail Lease, but then continue to utilize the Premises as a warehouse and showroom for personal property that might be sold without quid pro quo for the Landlord. 13. Any order entered rejecting the Chisholm Trail Lease should contain express provisions either (a) ordering that personal property at the Premises is abandoned as of the rejection effective date, or (b) if abandonment of such property is effective subsequent to the rejection effective date, (i) requiring payment of contractual rent for such limited post-rejection period, (ii) indemnifying the Landlord, and (iii) establishing other specific protocols to protect the Landlord. (For the avoidance of doubt, the rent reductions contained within the Amendment and Agreed

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Order expire on January 31, 2021—thereafter, monthly base rent under the Chisholm Trail Lease is in excess of $90,000, with required triple net charges.) 14. To be sure, the Debtors should have to make a decision, to either (a) reject the Chisholm Trail Lease effective as of January 31, 2021, remove personal property they do not intend to abandon prior to January 31, 2021, and abandon all property thereafter remaining, or (b) pay contractual rent pursuant to the terms of the Chisholm Trail Lease if they want to continue to access the Premises in February 2021 (or thereafter), regardless of whether access is for continued operations or to warehouse and conduct sales of personal property. 15. Rejection would be illusory if the Debtors were allowed to continue to access the Premises and the property therein after the rejection effective date. See 11 U.S.C. § 365(g) (specifying the effect of rejection); Eastover Bank for Sav. v. Sowashee Venture (In re Austin Dev. Co.), 19 F.3d 1077, 1083-1084 (5th Cir. 1994) (distinguishing between rejection and termination of a lease and noting that “after rejection, the debtor’s estate is no longer involved in the leasehold transaction”); RPD Holdings, L.L.C. v. Tech Pharm. Servs. (In re Provider Meds, L.L.C.), 907 F.3d 845 n. 56 (5th Cir. 2018). 16. The terms of the Debtors’ past rejection orders entered in these cases and the proposed procedures for the sale of certain personal property would prevent the Landlord from marketing the Premises for re-letting to other tenants and potentially expose the Landlord to unnecessary liability. Furthermore, the proposed rejection procedures would be patently unfair to the Landlord, likely constituting a “taking” under the 5th Amendment. See U.S. Const. amend. V (“No person shall … be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.”). By the Sale Motion (and the terms of the rejection order for the Chisholm Trail Lease likely sought by the Debtors), the

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Debtors are seeking access to the rejected Premises for themselves and potentially other parties, such as appraisers, auctioneers, buyers and movers. In 5th Amendment terms, the Debtors are requesting that the Court order a physical invasion or taking of the Landlord’s property. See Penn Central Transp. Co. v. City of New York, 438 U.S. 104, 124 (1978). 17. The Debtors could have filed the Sale Motion in conjunction with the filing of the Motion to Reject on the Petition Date. For whatever reason, the Debtors chose not to file the Sale Motion at an earlier date, which may have resolved these timing conundrums. Moreover, since rejection of the Chisholm Trail Lease has become a certainty at least a week ago, the Debtors have had time prior to the rejection effective date to remove personal property at the Premises which they do not intend to abandon. The Court cannot allow the Debtors to keep the Landlord in limbo after the effective date of the rejection of the Chisholm Trail Lease. Doing so would be inequitable and beyond the scope of the Bankruptcy Code and related case law. III. RESERVATION OF RIGHTS 18. The Landlord reserves all rights, including (without limitation) under sections 365 and 503 of the Bankruptcy Code. The Landlord further reserves all rights to update, supplement or otherwise amend this Supplemental Objection. IV. JOINDER 19. To the extent not inconsistent with the foregoing, the Landlord joins in the arguments and authorities raised by other landlords, both in objecting to the Motion to Reject and the Sale Motion. V. CONCLUSION The Landlord respectfully requests that the Court condition any order on the Motion to Reject as requested herein and grant such other and further relief as is just and proper.

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Dated: January 17, 2021 Respectfully submitted, JACKSON WALKER L.L.P. By: /s/ J. Machir Stull Michael S. Held State Bar No. 09388150 J. Machir Stull State Bar No. 24070697 2323 Ross Avenue, Suite 600 Dallas, Texas 75201 (214) 953-6000 (214) 953-5822 (Fax) mheld@jw.com mstull@jw.com ATTORNEYS FOR SEC CTR & MCP, LP

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CERTIFICATE OF SERVICE The undersigned hereby certifies that, on this the 17th day of January, 2021, true and correct copies of this document were electronically served by the Court’s ECF system on parties entitled to notice thereof. /s/ J. Machir Stull J. Machir Stull