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Full title: Motion for relief from stay to Continue Prosecution of State Court Action Fee amount $188, Filed by Creditor Craig Cheesman Objections due by 2/10/2021. (Attachments: # 1 Exhibit 1 State Court Action Complaint # 2 Exhibit 2 State Court Action Docket Sheet) (Hersh, Susan)

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

Bankrupt11 Summary (Automatically Generated)

FOR RELIEF FROM AUTOMATIC STAY TO CONTINUE PROSECUTION OF STATE COURT ACTION 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 Comes now Craig Cheesman (“Cheesman” or “Movant”), an unsecured creditor and plaintiff in state court litigation against the Debtor, hereby moves for relief from the automatic stay for cause pursuant to 11 U.S.C. section 362(d)(1) to permit him to continue his state court lawsuit against debtor Movie Grill Concepts Trademark Holdings LLC (“Debtor”) in the Super

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Susan B. Hersh (SBN 09543925) Gregory M. Salvato (Cal. Bar No. 126285) SUSAN B. HERSH, P.C. Joseph Boufadel (Cal. Bar No. 267312) 12770 Coit Road, Suite 1100 SALVATO BOUFADEL LLP Dallas, Texas 75251 777 South Figueroa Street, Suite 2800 Telephone: (972) 503-7070 Los Angeles, California 90017-5826 Facsimile: (972) 503-7077 Telephone: (213) 484-8400 Applicant for admission Pro Hac Vice Attorneys for creditor CRAIG CHEESMAN UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION In re: § Case No. 20-32633-SGJ § STUDIO MOVIE GRILL § Chapter 11 HOLDINGS, LLC, et al., § § Jointly Administered Debtors.1 § § Preliminary Hearing set for February 25, § 2021 at 1:30 p.m. MOTION FOR RELIEF FROM AUTOMATIC STAY TO CONTINUE PROSECUTION OF STATE COURT ACTION 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). Motion for Relief from Automatic Stay to Continue

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NOTICE TO DEBTORS AND PARTIES IN INTEREST PURSUANT TO LOCAL BANKRUPTCY RULE 4001-1(b), A RESPONSE IS REQUIRED TO THIS MOTION, OR THE ALLEGATIONS IN THE MOTION MAY BE DEEMED ADMITTED, AND AN ORDER GRANTING THE RELIEF SOUGHT MAY BE ENTERED BY DEFAULT. ANY RESPONSE SHALL BE IN WRITING AND FILED WITH THE CLERK OF THE UNITED STATES BANKRUPTCY COURT AT 1100 COMMERCE STREET, ROOM 1254, DALLAS, TEXAS 75242-1496 BEFORE CLOSE OF BUSINESS ON FEBRUARY 10, 2021, WHICH IS AT LEAST 14 DAYS FROM THE DATE OF SERVICE HEREOF. A COPY SHALL BE SERVED UPON COUNSEL FOR THE MOVING PARTY AND ANY TRUSTEE OR EXAMINER APPOINTED IN THE CASE. ANY RESPONSE SHALL INCLUDE A DETAILED AND COMPREHENSIVE STATEMENT AS TO HOW THE MOVANT CAN BE “ADEQUATELY PROTECTED” IF THE STAY IS TO BE CONTINUED. TO THE HONORABLE STACEY G. C. JERNIGAN, U. S. BANKRUPTCY JUDGE: Comes now Craig Cheesman (“Cheesman” or “Movant”), an unsecured creditor and plaintiff in state court litigation against the Debtor, hereby moves for relief from the automatic stay for cause pursuant to 11 U.S.C. section 362(d)(1) to permit him to continue his state court lawsuit against debtor Movie Grill Concepts Trademark Holdings LLC (“Debtor”) in the Superior Court for the State of California to judgment and appeal, if necessary, in order to liquidate his claims and to recover from and to the extent of any applicable insurance coverage available, provided, however, that the stay will remain in effect as to enforcement of any resulting judgment against the Debtor or bankruptcy estate. In support thereof, Movant respectfully shows to the Court as follows: SUMMARY OF RELIEF REQUESTED 1. Movant is the plaintiff in the pre-petition California Superior Court employment action entitled, Craig Cheesman v. Movie Grill Concepts Trademark Holdings LLC, et al., Placer Motion for Relief from Automatic Stay to Continue

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Superior Court Case No. S-CV-0045071, before the Superior Court of the State of California, County of Placer, alleging, among other things, discrimination in violation of California’s Fair Employment Housing Act, retaliation, and wrongful termination (the “State Court Action”). A true and correct copy of the filed State Court Complaint is attached as Exhibit 1. Movant seeks relief from the automatic stay so that he may continue to liquidate his claim to judgment against the Debtor in the State Court Action. 2. Relief from the automatic stay is proper and warranted because: a. The Debtor’s participation in the State Court Action will not prejudice the Debtor nor will it diminish or dissipate the Debtor’s assets. Movant seeks relief from the automatic stay for the limited purpose of permitting him to pursue the State Court Action to judgment and appeal, if necessary, in order to liquidate his claims at issue in the State Court Action. Movant seeks relief from the automatic stay only to obtain a judgment and pursue available insurance proceeds. Therefore, there is no substantive prejudice to the Debtor, while permitting Movant to liquidate his claims against the estate, while maintaining that any collection action against the Debtor or its property would be asserted in connection with the bankruptcy proceeding. b. Debtor’s employment litigation defense counsel—Ogletree Deakins—in the State Court Action has been retained and approved by the Bankruptcy Court as an ordinary course professional. (Order: Doc. No. 332 at p. 6). c. Movant seeks to recover from and to the extent of any applicable insurance coverage available. The claims in the State Court Action are believed to be covered by the Debtor’s employment practices policy. d. The most efficient, practical and fair means of achieving liquidation of Motion for Relief from Automatic Stay to Continue

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Movant’s claims is to continue prosecution of the California state law employment claims in California state court. A copy of the case docket in the State Court Action is attached as Exhibit 2. e. The issues raised in the State Court Action are entirely based on California state law. California Superior Court is therefore the appropriate forum in which to have those issues heard and resolved. Importantly, Movant has demanded and is entitled to a jury trial in the State Court Action. (Exhibit 1). 3. Prior to filing this Motion, Movant’s bankruptcy counsel reached out several times by email and telephone to Debtor’s attorneys to determine whether they would be amenable to entering into a stipulation for an order granting relief from stay on the ground set forth here in this Motion. Movant’s counsel never received a substantive response from Debtor’s counsel. JURISDICTION 4. This Court has jurisdiction over this case and contested matter pursuant to 28 U.S.C sections 157 and 1334. This is a core proceeding pursuant to 28 U.S.C. section 157(b)(2)(A) and (G). 5. Venue is proper in this district pursuant to 28 U.S.C. sections 1408 and 1409. 6. The statutory predicates for the relief requested in this Motion include 11 U.S.C. sections 105(a) and 362(a) and (d)(1), Rule 4001 of the Federal Rules of Bankruptcy Procedure, and Local Bankruptcy Rule 4001-1. BACKGROUND 7. Pre-petition, on June 22, 2020, Movant commenced the State Court Action against the Debtor in the Placer Superior Court (California), Case No. S-CV-0045071, alleging, Motion for Relief from Automatic Stay to Continue

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among other things, discrimination in violation of California’s Fair Employment Housing Act, retaliation, and wrongful termination (Exhibit 1). 8. On September 11, 2020, Debtor filed its Answer in the State Court Action. Debtor also retained counsel Aaron H. Cole of Ogletree, Deakins, Nash, Smoak & Stewart, P.C. in Los Angeles, California as its employment defense counsel in the State Court Action. (Exhibit 2). 9. On October 23, 2020, Debtors commenced a voluntary petition under Chapter 11 of the Bankruptcy Code. (Doc. No. 1). On October 27, 2020, the Court ordered the Debtors’ various cases be jointly administered under this lead case. (Doc. No. 48). 10. The Debtors have continued in the possession of their property and have continued to operate and manage their business as debtors in possession pursuant to Bankruptcy Code sections 1107(a) and 1108. A Creditors’ Committee was appointed by the U.S. Trustee on November 16, 2020. (Doc. No. 173). No trustee or examiner has been requested or appointed in these jointly administered Chapter 11 cases. 11. Debtor’s counsel in the State Court Action—Ogletree, Deakins, Nash, Smoak & Stewart (Exhibit 2)—located in Los Angeles, California, has been approved by the Bankruptcy Court as an ordinary course professional to represent the Debtor in its employment litigation matter(s), by Order entered December 11, 2020. (Order: Doc. No. 332 at p. 6). BASIS FOR RELIEF 12. Pursuant to Bankruptcy Code section 362(d)(1), courts may grant relief from the automatic stay for “cause.” In determining whether “cause” exists to grant relief from stay, courts conduct a case-by case inquiry. Reitnauer v. Tex. Exotic Feline Found. (In re Reitnauer), 152 F.3d 341, 343 n.4 (5th Cir. 1998). Factors that are examined in determining “cause” include, but are not limited to, (a) the desire to permit an action to proceed to completion in another Motion for Relief from Automatic Stay to Continue

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tribunal; (b) weighing the hardships to the parties and the goals of the Bankruptcy Code; (c) whether judicial economy is better achieved through continuing the litigation in the nonbankruptcy forum; (d) whether the claim is critical to the success or failure of the reorganization; (e) lack of any connection with or interference with the pending bankruptcy case; and (f) whether the nature of the claim requires expertise beyond the abilities of the bankruptcy court. See Mooney v. Gill, 310 B.R. 543, 546 (N.D. Tex. 2002); In re Henderson, 352 B.R. 439, 442, n.3 (Bankr. N.D. Tex. 2006); In re Choice ATM Enters., 2015 Bankr. LEXIS 689, at *7 (Bankr. N.D. Tex. Mar. 4, 2015) (collecting various cases and methodologies for determining whether “cause” exists to lift the automatic stay to continue litigation in a nonbankruptcy forum). 13. Generally, “the burden of proof, or the risk of non-persuasion, is on the debtor for all issues except the issue of the debtor's equity in the property, § 362(g).” In re Timbers of Inwood Forest Assocs., Ltd., 793 F.2d 1380, 1388 (5th Cir. 1986). 14. Here, Movant submits that ample cause exists to grant relief from the automatic stay to allow Movant to continue prosecution and liquidation of his California employment claims in State Court Action. 15. First, there will be no prejudice to the Debtor, its bankruptcy estate, or third parties. As Movant is seeking a recovery under the Debtor’s insurance policies and is not attempting to execute directly on assets of the Debtor’s estate, the Debtor’s assets will remain available for distribution in accordance with a plan or otherwise under the Bankruptcy Code. Moreover, to the extent that Movant is otherwise entitled to assert a claim against the Debtor’s estate on account of his claim, granting relief from the automatic stay will facilitate a determination of the validity and amount of such claim. 16. Second, the hardship suffered by Movant outweighs the potential hardship to the Motion for Relief from Automatic Stay to Continue

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Debtor if Movant is not granted relief. Movant holds substantial claims for discrimination, retaliation, and wrongful termination, among other claims, against the Debtor. The State Court Action has been pending for several months prior to the Debtor’s bankruptcy filing. Indeed, the Debtor retained counsel and answered the State Court Complaint prior to filing for bankruptcy. (Exhibit 2). And Debtor’s employment counsel—Ogletree Deakins—has been approved and retained as an ordinary course professional to defend against pending employment litigation claims. (Doc. No. 332 at p. 6; Exhibit 2). If the litigation cannot be settled, then the most convenient forum would be the state (California) and county (Placer) where the injuries were sustained and where the applicable witnesses are located. Moreover, an earlier determination of the amount and allowability of Movant’s claims would facilitate a more complete proposed plan of reorganization. 17. Third, Movant’s claims are specific employment claims under California state law. California Superior Court is better situated to try and determine Movant’s California state law claims, especially where all parties have local, California counsel to handle the litigation in Placer County, California. 18. Furthermore, to the extent Movant’s claims constitute personal injury claims within the meaning of 28 U.S.C. section 157(b)(5), this Court cannot try the State Court Action, which can only proceed before the Superior Court in Placer County, California or in the District Court in the Northern District of Texas. However, in light of the employment counsel already retained by both the Movant and Debtor that have both appeared in the State Court Action, the Debtor does not have a strong interest that overrides the prejudice to the Movant to adjudicate the California employment claims in Federal District Court in Texas. 19. For the foregoing reasons, the Movant respectfully requests that the Court enter Motion for Relief from Automatic Stay to Continue

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an Order granting the relief requested herein. NOTICE 20. Notice of this Motion shall be provided to the following parties, or their counsel, if known: (a) the Office of the United States Trustee; (b) counsel for the Debtors; (c) Counsel to the official committee of unsecured creditors appointed in these chapter 11 cases; (d) counsel for the parties to the State Court Action; (e) all parties consenting to electronic service in this case via the Court’s ECF system for the Northern District of Texas; and (f) any party that has requested notice pursuant to Rule 2002 of the Federal Rules of Bankruptcy Procedure. NO PRIOR REQUEST 21. Movant has not made a prior request for the relief sought in this Motion to this Court or any other court. WHEREFORE, for the reasons set forth herein, Movant prays for an order of this Court: 1. Granting relief from the automatic stay to permit him to continue prosecution of his state court lawsuit against Debtor Movie Grill Concepts Trademark Holdings LLC in the State Court Action to judgment and appeal, if necessary, in order to liquidate his claims and to recover from and to the extent of any applicable insurance coverage available, provided, however, that the stay will remain in effect as to enforcement of any resulting judgment against the Debtor or bankruptcy estate. 2. For such additional relief to which Movant may be justly entitled. // // // // // // Dated: January 27, 2021 Respectfully Submitted, Motion for Relief from Automatic Stay to Continue

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SALVATO BOUFADEL LLP Gsalvato@salvatoboufadel.com Jboufadel@salvatoboufadel.com By: /s/ Gregory M. Salvato Gregory M. Salvato -and- SUSAN B. HERSH, P.C. By: _/s/ Susan B. Hersh Susan B. Hersh 12770 Coit Road, Suite 1100 Dallas, Texas 75251 Telephone: (972) 503-7070 Susan@susanbhershpc.com ATTORNEYS FOR CREDITOR CRAIG CHEESMAN CERTIFICATION OF CONFERENCE Prior to filing this Motion, Movant’s bankruptcy counsel reached out several times by email and telephone to Debtors’ attorneys to determine whether they would be amenable to entering into a stipulation for an order granting relief from stay on the ground set forth here in this Motion. Movant’s counsel never received a response from Debtors’ counsel. /s/ Gregory M. Salvato CERTIFICATE OF SERVICE The undersigned hereby certifies that a true and correct copy of the Motion for Relief from the Automatic Stay to Continue Prosecution of State Court Action was served electronically via this Court’s CM/ECF System upon the parties entitled to such notice on this the 27th day of January, 2021. /s/ Susan B. Hersh Motion for Relief from Automatic Stay to Continue