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Full title: Objection to (related document(s): 491 Motion for relief from stay Fee amount $188, filed by Creditor INORCA SAS) filed by Debtor Studio Movie Grill Holdings, LLC. (Veteto, Jeffery)

Document posted on Jan 27, 2021 in the bankruptcy, 8 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 ManagementThe statements contained in Paragraph 18 of the Motion constitute recitation of relief requested by INORCA to which the Debtors do not believe they are required to directly admit or deny, to the extent a response is required however, Debtors deny such allegations and state that this Court should also deny the relief requested.The statements contained in Paragraph 20 of the Motion constitute recitation of relief requested by INORCA to which the Debtors do not

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Frank J. Wright Texas Bar No. 22028800 Jeffery M. Veteto Texas Bar No. 24098548 Jay A. Ferguson Texas Bar No. 24094648 LAW OFFICES OF FRANK J. WRIGHT, PLLC 2323 Ross Avenue, Suite 730 Dallas, Texas 75201 Telephone: (214) 935-9100 ATTORNEYS FOR STUDIO MOVIE GRILL HOLDINGS, LLC, et al. IN THE UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION IN RE: § CASE NO. 20-32633-SGJ § STUDIO MOVIE GRILL HOLDINGS, LLC, § Chapter 11 et al.,1 § § DEBTORS. § Jointly Administered 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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DEBTORS’ OBJECTION TO INORCA SAS’ MOTION FOR RELIEF FROM THE AUTOMATIC STAY Studio Movie Grill Holdings, LLC and its debtor affiliates, as debtors and debtors in possession in the above-captioned chapter 11 cases (collectively, the “Debtors” or the “SMG”), file this Objection (the “Objection”) to INORCA SAS’ (“INORCA”) Motion for Relief from the Automatic Stay [Dkt. No. 491](the “Motion”). I. RESPONSE TO ALLEGATIONS 1. The Debtors admit the allegations contained in Paragraph 1 of the Motion. 2. The Debtors deny the allegations contained in Paragraph 2 of the Motion. Debtors all filed their voluntary petitions under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”) – not under Chapter 13. 3. The Debtors deny the allegations contained in the first sentence of Paragraph 3 of the Motion, to the extent that Debtors contend that INORCA does not have a validly perfected purchase money security interest. The Debtors further deny the allegations contained in the second sentence of Paragraph 3 of the Motion based on the lack of contextual definition of the quoted term “deferred location” as it pertains to the Motion, but admit that the Northpoint Location is subject to an unexpired lease in which a debtor is the Tenant.2 4. The Debtors admit the allegations contained in Paragraph 4 of the Motion. 5. Debtors are without sufficient information to admit or deny the allegations contained in Paragraph 5 of the Motion to the extent that the supporting documentation offered by INORCA is an untranslated document appearing to be an invoice from the manufacturer to INORCA. 6. The Debtors admit the allegations contained in Paragraph 6 of the Motion. 2 Except as otherwise defined herein, all terms shall bear the meaning ascribed to them by the Motion.

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7. The allegations contained in Paragraph 7 of the Motion pertain to INORCA’s attachment of particular documents to its Motion; to the extent such documents are in fact attached, the Debtors admit these allegations. 8. The Debtors deny the allegations contained in Paragraph 8 of the Motion to the extent that rejection and abandonment related to the Chisholm Location have been determined pursuant to the Third Order (A) Partially Granting Debtors’ Second Motion for Entry of an Order Under Section 3654 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. 537] (the “Chisholm Order”). 9. The Debtors deny the allegations contained in the Paragraph 9 of the Motion, to the extent that Debtors contend that INORCA does not have validly perfected secured interests in either location. 10. The Debtors are without sufficient information to admit or deny the allegations contained in Paragraph 10 of the Motion to the extent that it calls for direct knowledge on labor and pricing for seating removal. 11. The Debtors admit the allegations contained in Paragraph 11 of the Motion. 12. The Debtors admit the allegations contained in Paragraph 12 of the Motion. 13. The Debtors admit the allegations contained in Paragraph 13 of the Motion to the extent publicly available court records of Dallas County, Texas so provide. 14. The statements contained in Paragraph 14 of the Motion constitute a legal conclusion to which the Debtors do not believe they are required to directly admit or deny, to the extent a response is required however, Debtors admit such allegations.

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15. The Debtors admit the allegations contained in Paragraph 15 of the Motion but specifically deny the implication that the seating at either the Northpoint Location or the Chisholm Location are the collateral of INORCA. 16. The Debtors deny the allegations contained in Paragraph 16 of the Motion, to the extent that Debtors contend that INORCA does not have validly perfected secured interests in either location and INORCA has not otherwise established a right to a secured claim. 17. The Debtors are without sufficient information to admit or deny the allegations contained in Paragraph 17 of the Motion, to the extent that any equity calculation post-petition would have to take into consideration the disposition of this case, claims, and valuation of the assets. The Debtors further specifically deny the implication that the seating at either the Northpoint Location or the Chisholm Location are the collateral of INORCA. 18. The statements contained in Paragraph 18 of the Motion constitute recitation of relief requested by INORCA to which the Debtors do not believe they are required to directly admit or deny, to the extent a response is required however, Debtors deny such allegations and state that this Court should also deny the relief requested. The Debtors further specifically deny the implication that the seating at either the Northpoint Location or the Chisholm Location are the collateral of INORCA. The Debtors further specifically deny the implication that any modification to the automatic stay would give rise to a right of INORCA to foreclose thereon. 19. The statements contained in Paragraph 19 of the Motion constitute a legal conclusion to which the Debtors do not believe they are required to directly admit or deny, to the extent a response is required however, Debtors deny such allegations. 20. The statements contained in Paragraph 20 of the Motion constitute recitation of relief requested by INORCA to which the Debtors do not believe they are required to directly admit or deny, to the extent a response is required however, Debtors deny such allegations and state that this

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Court should also deny the relief requested. The Debtors further specifically deny the implication that the seating at either the Northpoint Location or the Chisholm Location are the collateral of INORCA. The Debtors further specifically deny the implication that any modification to the automatic stay would give rise to a right of INORCA to foreclose thereon. 21. Together with the responses offered herein, the Debtors deny the allegations contained in Paragraph 21 of the Motion and state that this Court should also deny the relief requested by this paragraph. 22. The Debtors deny the allegations contained in Paragraph 22 of the Motion and further specifically deny the implication that the seating at either the Northpoint Location or the Chisholm Location are the collateral of INORCA. 23. It is unclear to the Debtors what specifically INORCA requests by the phrase “vacating and relaxing the stay[.]” However, the statements contained in Paragraph 23 of the Motion constitute recitation of relief requested by INORCA to which the Debtors do not believe they are required to directly admit or deny, to the extent a response is required however, Debtors deny such allegations and state that this Court should also deny the relief requested. The Debtors further specifically deny the implication that the seating at either the Northpoint Location or the Chisholm Location are the collateral of INORCA. The Debtors further specifically deny the implication that any modification to the automatic stay would give rise to a right of INORCA to foreclose thereon. II. ARGUMENT 24. In substance, INORCA seeks relief from the automatic stay to foreclose on certain theater seating it alleges to be its collateral. 25. Debtors submit that INORCA cannot carry its burden of proof as to the personal property assets being their collateral for the following reasons.

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(i) The Purchase Orders allegedly granting the purchase money security interest are unsigned by the Debtors; (ii) The UCC Financing Statement offered by INORCA filed on September 24, 2020, more than twenty (20) days after delivery of the subject goods; and (iii) The UCC Financing Statement offered by INORCA does not on its face identify any assets in the Chisholm Location; 26. Pursuant to Article 9 of the Uniform Commercial Code, the security interest in the personal property assets could only be perfected by a filed financing statement. At some point between the delivery and the late-filing of the UCC Financing Statement, any rights held by INORCA became inferior in priority to that of the Debtors’ prepetition bank lenders. 27. Pursuant to Bankruptcy Code § 362(d)(1), a court may grant relief from the automatic stay only “for cause.” See 11 U.S.C. § 362(d)(1). The burden to make an initial showing of “cause,” is on the moving party, and “absent a showing of cause, the court should simply deny relief from the stay.” See Mazzeo v. Lenhart (In re Mazzeo), 167 F.3d 139, 142 (2d. Cir. 1999); see also In re Rexene Prods. Corp., 141 B.R. 574, 577 (Bankr. D. Del 1992) (finding that courts have interpreted 11 U.S.C. § 362(g) “as requiring that Movant establish prima facie case that cause exists to lift the stay”); In re Peregrine Sys. Inc., 314 B.R. 31, 46–47 (D. Del. 2004) (finding that moving party has the initial burden of establishing that cause exists for relief from stay). Although the Bankruptcy Code does not explicitly define the term “cause” in the context of relief from the automatic stay, “courts generally consider the policies underlying the automatic stay [and] . . . the competing interests of the debtor and the Movants.” In re Cont’l Airlines, Inc., 152 B.R. 420, 424 (D. Del. 1993). 28. Debtors assert that there is no “cause” to lift the automatic stay at this time and that INORCA has failed to establish even a prima facie case thereof. First, given INORCA’s overtures about foreclosure and repossession, the Debtors and their estates would be substantially prejudiced if the stay is lifted while collateral rights to the assets remains in dispute.

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29. Second, relief from stay is granted to an unsecured creditor only when the balance of hardships tips in the creditor’s favor. See In re U.S. Brass Corp., 173 B.R. 1000, 1006 (Bankr. E.D. Tex. 1994), modified, 176 B.R. 11 (Bankr. E.D. Tex. 1994). In the Motion, INORCA identifies only one basis for hardship – being a supposed increase in cost associated with the hypothetical installation of additional seats at Chisholm Trail. Pursuant to the Chisholm Order, the subject personal property is scheduled for abandonment following a period wherein the Debtor will seek to sell the same. There is no intention at this time by the Debtors, nor a capability, to continue the installation of additional seats. Therefore, there is no hardship for INORCA if the stay is not lifted. 30. Third, the dispute between Debtors’ lenders and INORCA will invariably result in a substantial period of time before a determination of lien rights is made and the contemplated foreclosure and repossession could actually occur. The forum of this Court is better suited to resolve these issues and lifting of the automatic stay operates to diminish the likelihood that such transpires. 31. Fourth, INORCA has not addressed the probability of its success on the merits of its claim, which is a factor courts generally consider in deciding whether to lift the stay. In re Henderson, 352 B.R. 439, 441 (Bankr. N.D. Tex. 2006); Cont’l Airlines, 152 B.R. at 424; Rexene Prods., 141 B.R. at 576; In re Peregrine Sys., Inc., 314 B.R. at 46–47. As set forth hereinabove, INORCA’s liens are subject to substantive dispute and the probability of success, should the stay be lifted, is dubious at best. INORCA wholly fails to address these issues, which is part of its burden of proof. 32. For all such reasons set forth herein, the Court should sustain this Objection and deny INORCA’s Motion seeking relief from the automatic stay. WHEREFORE, the Debtors respectfully request that this Court deny the relief requested by the Motion and award the Debtors such other and further relief as this Court may deem just and proper.

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DATED: January 28, 2021 Respectfully submitted, LAW OFFICES OF FRANK J. WRIGHT, PLLC By: /s/ Jeffery M. Veteto Frank J. Wright Texas Bar No. 22028800 Jeffery M. Veteto Texas Bar No. 24098548 Jay A. Ferguson Texas Bar No. 24094648 2323 Ross Avenue, Suite 730 Dallas, Texas 75201 Telephone: (214) 935-9100 Emails: frank@fjwright.law jeff@fjwright.law jay@fjwright.law ATTORNEYS FOR STUDIO MOVIE GRILL HOLDINGS, LLC, et al. CERTIFICATE OF SERVICE I hereby certify that on January 28, 2021, a true and correct copy of the foregoing document was served on all parties consenting to electronic service of this case via the Court’s ECF system for the Northern District of Texas and via United States Mail, first class postage prepaid, on January 29, 2021 on the Debtors’ Complex Service List /s/ Jeffery M. Veteto Jeffery M. Veteto