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Full title: Objection to (related document(s): 545 Notice (generic) filed by Debtor Studio Movie Grill Holdings, LLC) filed by Creditor AMREIT SSPF BERKELEY, LP. (Mayer, John)

Document posted on Jan 26, 2021 in the bankruptcy, 9 pages and 0 tables.

Bankrupt11 Summary (Automatically Generated)

CONTRACTS AND UNEXPIRED LEASES WHICH MAY BE ASSUMED AND ASSIGNED, AND OBJECTION TO THE PROPOSED CURE AMOUNTS AND LACK OF ADEQUATE PROTECTION (ref doc 545) TO THE HONORABLE STACY G. C. JERNIGAN UNITED STATES BANKRUPTCY JUDGE: Comes now AmREIT SSPF Berkeley, LP (“AmREIT”), a landlord creditor and party in interest, and respectfully objects to the Debtors’ Supplement to 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 Proposed Cure Amounts (doc 545, the “Supplement to Amended Assumption Notice”), and respectfully represents: Grounds 1. 5. AmREIT’s Lease and Amendments to the Lease call for the tenant to pay Minimum Guaranteed Rent in the amount of $52,849.17, plus Additional Rent in the amount of $31,978.00 per month for the tenant’s pro rata share of Common Area Maintenance, property taxes, insurance, trash removal, and management fees, in the total amount of $84,827.17 per month, on the first day of each month, through the expiration of the Lease on February 28, 2025. 6. Bankruptcy Code Section 365(d)(3) requires the Debtors to timely perform all obligations arising from and after the date of the Debtors’ Petitions, until such lease is assumed or rejected.Lack of Adequate Protection 14. AmREIT further objects to assumption and assignment of its Lease for failure of the Debtors to provide adequate assurance of future performance of the Lease, and to the Debtors’ assignment of its Lease to a buyer of the Debtors’ assets. Unless and until the Debtors find a potential buyer of the Debtors’ assets, the Debtors cannot furnish adequate assurance that the potential buyer has sufficient assets and financial ability to perform the Lease. 16. AmREIT further objects to the provision of the Supplement to Amended Assumption Notice that assignment of the Lease to a purchaser of the Debtors’ assets will have the consequence that AmREIT will “(III) BE FOREVER BARRED AND ESTOPPED FROM ASSERTING OR CLAIMING AGAINST THE DEBTORS, THE PREVAILING PURCHASER, OR ANY OTHER ASSIGNEE OF THE RELEVANT CONTRACT OR LEASE, THAT ANY ADDITIONAL AMOUNTS ARE DUE OR OTHER DEAULTS EXIST ….” AmREIT’s Lease provides that the tenant must indemnify, protect, defend and hold harmless AmREIT, and other parties, with regard to incidents that may have occurred prior to the effective date of any assignment of the Lease.Prayer Wherefore, premises considered, AmREIT SSPF Berkeley, LP objects to the Supplement to Amended Notice (doc 545): 1. AmREIT objects to the Debtors’ assumption and assignment of AmREIT’s Lease, for failure to pay post-petition rents required by Bankruptcy Code Section 365(d)(3).

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John Mayer Texas Bar No. 13274500 James V. Lombardi, III Texas Bar Number 00789779 Ross, Banks, May, Cron & Cavin, P.C. 7700 San Felipe, Suite 550 Houston, Texas 77063 Phone 713-626-1200 Email jmayer@rossbanks.com Email jlombardi@rossbanks.com Attorneys for AmREIT SSPF Berkeley Square, LP 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 ) Debtors ) Jointly Administered __________________________________________) OBJECTION OF AMREIT SSPF BERKELEY, LP TO DEBTORS’ SUPPLEMENT TO AMENDED NOTICE OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES WHICH MAY BE ASSUMED AND ASSIGNED, AND OBJECTION TO THE PROPOSED CURE AMOUNTS AND LACK OF ADEQUATE PROTECTION (ref doc 545) TO THE HONORABLE STACY G. C. JERNIGAN UNITED STATES BANKRUPTCY JUDGE: Comes now AmREIT SSPF Berkeley, LP (“AmREIT”), a landlord creditor and party in interest, and respectfully objects to the Debtors’ Supplement to 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 Proposed Cure Amounts (doc 545, the “Supplement to Amended Assumption Notice”), and respectfully represents:

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Grounds 1. AmREIT objects to the Debtors’ assumption and assignment of AmREIT’s Lease, for failure to pay post-petition rents required by Bankruptcy Code Section 365(d)(3). 2. AmREIT objects to the Debtors’ proposed cure amount for AmREIT’s Lease. 3. AmREIT objects for lack of adequate protection to the assumption and assignment of AmREIT’s Lease to an unknown buyer, and to the proposed cancellation of the Debtors’ liability for indemnity of AmREIT from tort claims arising from the Debtors’ possession and use of the Premises. Background Facts 1. AmREIT is the landlord of an unexpired lease with one of the Debtor entities, Movie Grill Concepts 1, Ltd, case number 20-32666-11, who is the tenant of 43,677 square feet of space in the Berkeley Square Shopping Center, 4721 Park Blvd, Plano, Texas (the “Premises”) in which Movie Grill Concepts 1, Ltd. operates a dine in movie theater business, pursuant to the terms of a written Shopping Center Lease (the “Lease”). 2. On January 26, 2021, the Debtors filed the Supplement to Amended Notice of Executory Contacts 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 (doc 364, the “Supplement to Amended Assumption Notice”). 3. The Lease is one of the leases to be assumed and the cure amount for AmREIT is stated to be $689,172.62. (Supplement to Amended Assumption Notice, Exhibit “A”, doc 545-1, page 5, line 5). Objection to Assumption of AmREIT’s Lease 4. In Paragraph 8 of the Supplement to Amended Assumption Notice, the Debtors allege that “Debtors’ records reflect that all post-petition amounts owing under your Executory

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Contracts have been paid and will continue to be paid until the assumption and assignment or rejection of the Executory Contract, ….” With respect to AmREIT’s unexpired Lease, that is untrue and false. 5. AmREIT’s Lease and Amendments to the Lease call for the tenant to pay Minimum Guaranteed Rent in the amount of $52,849.17, plus Additional Rent in the amount of $31,978.00 per month for the tenant’s pro rata share of Common Area Maintenance, property taxes, insurance, trash removal, and management fees, in the total amount of $84,827.17 per month, on the first day of each month, through the expiration of the Lease on February 28, 2025. 6. Bankruptcy Code Section 365(d)(3) requires the Debtors to timely perform all obligations arising from and after the date of the Debtors’ Petitions, until such lease is assumed or rejected. The Debtors failed to pay post-petition rents required by Section 365(d)(5), and only paid to AmREIT the amount of the Additional Rent of $31,978.00 per month, and wholly failed to pay the Minimum Guaranteed Rent in the amount of $52,849.17 per month. 7. Bankruptcy Code Section 365(b)(1) requires that the Debtors may not assume an unexpired lease unless, at the time of assumption, the Debtors cure all default. Bankruptcy Code Section 365(d)(4) provides that the deadline for the Debtors to assume any unexpired lease of non-residential real property is 120 after the date of the Debtors’ Petitions. That deadline is February 20, 2021. The Debtors cannot provide adequate assurance that the Debtors will be able to pay all accrued and unpaid post-petition rents on AmREIT’s Lease by the deadline. 8. Wherefore, AmREIT objects to the assumption of its unexpired Lease. Objection to Cure Amounts 9. Bankruptcy Code Section 365(b)(1) provides that the trustee or debtor in possession may not assume an unexpired lease unless, at the time of assumption of the lease, the trustee or

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debtor in possession cures, or provides adequate assurance that the trustee or debtor in possession will promptly cure all defaults. In re Pacific Exp., Inc., 780 F.2d 1428 (9th Cir. 1986); LJC Corp. v. Boyle, 768 F.2d 1489 (Cir. D.C. 1985). The cure amount includes pro rata rent from the petition date to the next monthly payment due date (“stub rent”). In re Mr. Gatti’s, Inc., 164 B.R. 929 (Bankr. W.D.Tex. 1994). 10. The cure amount for the Lease, stated in the Supplement to Amended Assumption Notice, Exhibit “A”) (doc 545-1, page 5, line 5), is not correct. The Debtors’ proposed cue amount for AmREIT’s Lease is only the sum of $689,172.62. 11. The correct cure amounts include unpaid pre-petition rents and other charges, set out in AmREIT’s Exhibit 1 – Statement of Account, attached hereto, and also the amounts of unpaid post-petition rents. The correct cure amounts, as of the date of this Objection, are: Unpaid Pre-Petition Rents $778,843.68 Stub rent for eight days from the Petition Date to the last day of the month of $23,252.85 October, October 23 to October 31, 2020, monthly rent of $90,104.81 x 8/31 the “Stub Rent”. Unpaid post-petition deferred rents for the months of November and December, $116,253.62 2020, which were due to be paid on December 22, 2020 under the Order on the Debtors’ Motion to Defer Rents (doc 249). Unpaid post-petition monthly rent which was due under the Lease on January 1, $58,126.81 2021 Total Unpaid Rents $976,476.96 12. In addition, monthly rent on AmREIT’s Lease will come due on February 1, 2021. AmREIT anticipates that the Debtors will again fail to pay the Minimum Guaranteed Rent due on February 1, 2021 in the amount of $58,126.81, which will be additional cure amount due, and the total cure amount by the assumption deadline will be the sum of $1,034,603.77.

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13. Wherefore, AmREIT object to the Debtors’ proposed cure amount for assumption of AmREIT’s Lease. Lack of Adequate Protection 14. AmREIT further objects to assumption and assignment of its Lease for failure of the Debtors to provide adequate assurance of future performance of the Lease, and to the Debtors’ assignment of its Lease to a buyer of the Debtors’ assets. Bankruptcy Code Section 365(c) requires that an assuming party furnish adequate assurance of future performance of the contract or lease to be assumed; In re Bon Ton Restaurant & Pastry Shop, Inc., 53 B.R. 789, 793 (Bankr. N.D. Ill 1985; In re Valley View Shopping Center, L.P., 260 B.R. 10, 25 (Bankr. D. Kan. 2001. Assumption of the unexpired lease is a condition precedent to assignment of the lease to a purchaser of the Debtors’ assets. Bankruptcy Code Section 365(f)(2)(A); In re Rachels Industries, Inc., 109 B.R. 797, 811-12 (Bankr. W.D. Tenn. 1990). 15. As of this date, the Debtors have not served a notice of any potential buyer of the Debtors’ assets. Unless and until the Debtors find a potential buyer of the Debtors’ assets, the Debtors cannot furnish adequate assurance that the potential buyer has sufficient assets and financial ability to perform the Lease. 16. AmREIT further objects to the provision of the Supplement to Amended Assumption Notice that assignment of the Lease to a purchaser of the Debtors’ assets will have the consequence that AmREIT will “(III) BE FOREVER BARRED AND ESTOPPED FROM ASSERTING OR CLAIMING AGAINST THE DEBTORS, THE PREVAILING PURCHASER, OR ANY OTHER ASSIGNEE OF THE RELEVANT CONTRACT OR LEASE, THAT ANY ADDITIONAL AMOUNTS ARE DUE OR OTHER DEAULTS EXIST ….” AmREIT’s Lease provides that the tenant must indemnify, protect, defend and hold

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harmless AmREIT, and other parties, with regard to incidents that may have occurred prior to the effective date of any assignment of the Lease. AmREIT objects that the above quoted provision would deprive AmREIT of adequate protection of indemnity from tort liability to third parties based upon or arising from the possession and use of the Premises by the tenant, Movie Grill Concepts 1, Ltd., including at least one pending lawsuit in state court against Movie Grill Concepts, Ltd. in which AmREIT is a co-defendant, based on alleged personal injuries sustained in the Premises. 17. Wherefore, AmREIT objects that it lacks adequate protection with respect to the Debtors’ proposed assumption and assignment of AmREIT’s Lease. Prayer Wherefore, premises considered, AmREIT SSPF Berkeley, LP objects to the Supplement to Amended Notice (doc 545): 1. AmREIT objects to the Debtors’ assumption and assignment of AmREIT’s Lease, for failure to pay post-petition rents required by Bankruptcy Code Section 365(d)(3). 2. AmREIT objects to the Debtors’ proposed cure amount for AmREIT’s Lease. 3. AmREIT objects for lack of adequate protection to the assumption and assignment of AmREIT’s Lease to an unknown buyer, and to the proposed cancellation of the Debtors’ liability for indemnity of AmREIT from tort claims arising from the Debtors’ possession and use of the Premises. Respectfully submitted, . John Mayer Texas Bar No. 13274500 James V. Lombardi, III Texas Bar Number 00789779 Ross, Banks, May, Cron & Cavin, P.C. 7700 San Felipe, Suite 550 Houston, Texas 77063 Phone 713-626-1200 Email jmayer@rossbanks.com

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Email jlombardi@rossbanks.com Attorneys for AmREIT SSPF Berkeley, LP 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 27, 2021. . John Mayer

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