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Full title: Amended Motion to sell (related document(s):406) Filed by Debtor Studio Movie Grill Holdings, LLC (Attachments: # 1 Exhibit A # 2 Exhibit B) (Wright, Frank)

Document posted on Feb 4, 2021 in the bankruptcy, 10 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); 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 Managementa. Upon receipt by the Debtors of the prior written consent of the Agent to the proposed sale of personal property assets with an aggregate Sale Price in excess of $50,000.00 and up to $1,500,000.00, the Debtors shall file on the docket and provide prior written notice (the “Sale Notice”) of their intent to sell such assets by overnight delivery to (i) the Office of the United States Trustee for the Northern District of Texas, (ii) counsel to the Agent, (iii) counsel to the Co

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5Frank 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 HOLDINS, LLC, et al. IN THE UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION IN RE: § § STUDIO MOVIE GRILL HOLDINGS, LLC, § CASE NO. 20-32633-SGJ et al.,1 § § Chapter 11 § 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); 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’ AMENDED 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 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 “Company”), file this Amended 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 (the “Amended Motion to Sell Personal Property”), amending their 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 [Dkt. No. 406]. I. JURISDICTION 1. This Court has jurisdiction over this case pursuant to 28 U.S.C. §§ 157 and 1334. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A). Venue is proper in this District pursuant to 28 U.S.C. § 1408. The statutory predicates for the relief requested herein are Sections 105(a) and 507(a)(7) of Title 11 of the United States Code (the “Bankruptcy Code”). 2. Venue is proper before the Court pursuant to 28 U.S.C. §§ 1408 and 1409. 3. The statutory and other bases for the relief requested in the Amended Motion to Sell Personal Property are Sections 105(a) and 363(b) of title 11 of the United States Code (the “Bankruptcy Code”), as complemented by Rules 2002 and 6004 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), and the Local Bankruptcy Rules of the United States Bankruptcy Court for the Northern District of Texas (the “Bankruptcy Local Rules”).

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II. BACKGROUND 4. On October 23, 2020 (the “Petition Date”), the Debtors each filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code, 11 U.S.C. §§ 101, et seq. (the “Bankruptcy Code”), thereby initiating the above-captioned bankruptcy cases (the “Chapter 11 Cases”). The Debtors continue to manage and operate their businesses as debtors-in-possession pursuant to Bankruptcy Code §§ 1107 and 1108. 5. An official committee of unsecured creditors (the “Committee”) has been appointed in these Chapter 11 Cases. Further, no trustee or examiner has been requested or appointed in these Chapter 11 Cases. 6. SMG is engaged in the dine-in movie theater business. In addition to its movie offerings, SMG’s theaters include a bar and lounge area, with direct to seat service for guests before and during their movies. As of the Petition Date, SMG operated 33 movies theaters in 10 states, including Arizona, California, Florida, Georgia, Illinois, Indiana, North Carolina, Pennsylvania, Texas, and Virginia. All theaters operate under the brand name “Studio Movie Grill.” 7. A detailed description of the Debtors and their businesses, and the facts and circumstances supporting the Motion and the Debtors’ Chapter 11 Cases are set forth in greater detail in the Declaration of William Snyder, CRO of the Debtors, in Support of the Debtors’ Chapter 11 Petitions and First Day Motion [Docket No. 20] (the “Snyder Declaration”), which was filed on the Petition Date and is incorporated by reference in this Motion. III. PRELIMINARY STATEMENT 8. In the course of the Chapter 11 Cases, the Debtors have rejected and anticipate continuing to reject certain unexpired real property leases of movie theater locations. At the majority of the rejected locations, on-site personal property has either been removed or abandoned pursuant

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to prior orders of this Court. The Debtors bring this Amended Motion to Sell Personal Property related solely to the personal property assets listed on Exhibit “B” attached hereto (the “Personal Property”).2 Sale of the Personal Property would aid in the Debtors’ restructuring and efforts to maximize the recovery of creditors. Moreover, without entry of procedures for sale, much of the Personal Property identified may either diminish in value or become unsellable. For such reasons, the Debtors seek authority to sell de minimis personal property assets pursuant to the procedures set forth herein. In particular, subject to the prior written consent of the Agent3 and upon consultation with the Committee, the Debtors propose to sell the Personal Property with an aggregate Sale Price (as defined below) of $50,000.00 or less without further order or approval of the Court or notice to parties in interest. Further, subject to the prior written consent of the Agentand upon consultation with the Committee, the Debtors propose to sell the Personal Property with an aggregate Sale Price in excess of $50,000.00 and up to $1,500,000.00 following the Debtors’ filing and service of a notice of such sale and the expiration of a 10-day objection period, among other procedures set forth below. 9. Debtors propose either sell directly to interested landlords or hire a selling agent to rapidly generate a sale. Debtors contemplate completion of this process no later than February 28, 2021 10. Debtors submit that this will maximize the recoverable value of the Debtors’ personal property assets for the benefit of the Debtors’ estates and all parties in interest. 2 Where noted on Exhibit B, the sale of personal property is contingent upon ongoing negotiations or resolution of disputes. 3 “Agent” means Goldman Sachs Special Lending Group, L.P., in its capacity as administrative agent under that certain Senior Secured Superpriority Debtor-in-Possession Financing Amendment dated as of October 27, 2020, by and among, among others, the Debtors, the DIP Agent, and the lenders party thereto (as may be amended from time to time).

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IV. RELIEF REQUESTED 11. By this Motion, the Debtors request entry of an order, substantially in the form attached to the Motion as Exhibit “A” authorizing the Debtors, upon the prior written consent of the Agent and upon consultation with the Committee, to sell de minimis Personal Property. 12. In particular, the Debtors request authority, subject to the prior written consent of the Agent and upon consultation with the Committee, to sell such assets either to interested landlords or through a third-party selling agent no later than February 28, 2021. Personal Property with an aggregate Sale Price in an amount of $50,000.00 or less (per location) without further order or approval of the Court or notice to parties in interest. For purposes of the procedures for the sale of de minimis personal property assets, the “Sale Price” shall be the amount of cash consideration or fair market value of non-cash consideration estimated to be received by the Debtors as determined by the Debtors with the Agent’s consent, less expenses to be incurred in connection with the sale (if any). 13. Further, for Personal Property with an aggregate Sale Price in excess of $50,000.00 and up to $1,500,000.00, the Debtors request approval, subject to the prior written consent of the Agent and upon consultation with the Committee, to sell such assets according to the following procedures: a. Upon receipt by the Debtors of the prior written consent of the Agent to the proposed sale of personal property assets with an aggregate Sale Price in excess of $50,000.00 and up to $1,500,000.00, the Debtors shall file on the docket and provide prior written notice (the “Sale Notice”) of their intent to sell such assets by overnight delivery to (i) the Office of the United States Trustee for the Northern District of Texas, (ii) counsel to the Agent, (iii) counsel to the Committee, and (iv) any party known by the Debtors to assert a lien on the asset to be sold (collectively, the “Notice Parties”). b. The Sale Notice shall include (i) a description of the assets to be sold and their locations; (ii) the purchase price being paid for such assets; (iii) the name and address of the purchaser, as well as a statement that such purchaser is not an insider or affiliate of any Debtor; (iv) the name of the applicable Debtor-seller;

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and (v) the amount of any fees or commissions to be paid in connection with the transaction. c. If no written objection from a Notice Party or other party in interest is received within ten (10) days of service of the Sale Notice, then the Debtors may immediately consummate the transaction, including making any disclosed payments of fees or commissions. If a written objection to any sale is received by the Debtors within the applicable notice period, then Court approval of such sale will be required (unless otherwise resolved by the objecting party and the Debtors with the Agent’s consent and upon consultation with the Committee). d. The Debtors may seek entry of a separate order on the limited issue of the applicability of section 363(m) of the Bankruptcy Code (a “363(m) Order”), after filing a notice on the docket and upon three days’ prior written notice to the Notice Parties. If no party objects to entry of the 363(m) Order, the Debtors may submit a proposed 363(m) Order under certification to the Court and a declaration in support of entry of the 363(m) Order, and the Court may enter the proposed 363(m) without a hearing. If a party objects to the entry of a proposed 363(m) Order, the Debtors may seek a hearing with respect to entry of such 363(m) Order. V. BASIS FOR RELIEF REQUESTED 14. The Debtors’ ultimate goal in these Chapter 11 Case is to conduct a financial and operational restructuring and to reorganize under a Chapter 11 plan of reorganization. In order to efficiently and effectively reach such objective, it is imperative that the Debtors be able to shed excess personal property as locations are removed from its business operations. Towards this goal, the Debtors seek approval under Bankruptcy Code Section 363 for procedures that enable them to carry out sales of such property in a timely fashion. 15. Bankruptcy Code Section 363(b)(1) provides, in relevant part, that “[t]he [debtor], after notice and a hearing, may use, sell, or lease, other than in the ordinary course of business, property of the estate.” 11 U.S.C. § 363(b)(1). Further, § 105(a) provides, in relevant part, that “[t]he court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title.” Id. at § 105(a).

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16. To approve the use, sale, or lease of the property outside the ordinary course of business, the Court need only determine that the Debtors’ decision is supported by “some articulated business justification” as established by the Second Circuit in Committee of Equity Security Holders v. Lionel Corp. (In re Lionel Corp.), 722 F.2d 1063, 1070 (2d. Cir. 1983), which decision has been adopted in this Circuit. Inst. Creditors of Continental Airlines, Inc. v. Continental Airlines, Inc. (In re Continental Airlines, Inc.), 780 F.2d 1223, 1226 (5th Cir. 1986); Cadle Company v. Mims (In re Moore), 608 F.3d 253, 263 (5th Cir. 2010); see also Myers v. Martin (In re Martin), 91 F.3d 389, 395 (3d Cir. 1996); Fulton State Bank v Schipper (In re Schipper), 933 F.2d 513 (7th Cir. 1991); In re Condere Corp., 228 B.R. 615, 628-29 (Bankr. S.D. Miss. 1998); In re San Jacinto Glass Industries, Inc., 93 B.R. 934, 944 (Bankr. S.D. Tex. 1988). Once a debtor articulates a valid business justification, “[t]he business judgment rule ‘is a presumption that in making the business decision the directors of a corporation acted on an informed basis, in good faith and in the honest belief that the action was in the best interests of the company.’” In re S.N.A. Nut Co., 186 B.R. 98 (Bonier. N.D. Ill. 1995); see In re Integrated Res., Inc., 147 B.R. at 656 (Bankr. S.D.N.Y. 1992); Comm. Of Asbestos-Related Litigants v. Johns-Manville Corp. (In re Johns-Manville Corp.), 60 B.R. 612, 615–16 (Bankr. S.D.N.Y. 1986) (“a presumption of reasonableness attaches to a debtor’s management decisions.”). See also In re ASARCO, L.L.C. v. Elliott Mgmt. (In re ASARCO, L.L.C.), 650 F.3d 593, 601 (5th Cir. 2011) (“The business judgment standard in section 363 is flexible and encourages discretion.”). In evaluating such a sale, a court must balance the need for flexibility with the concern of affected creditors. In re ASARCO, L.L.C., 650 F.3d at 601; In re Terrace Gardens ParkP’ship, 96 B.R. at 715. 17. Thus, if a debtor’s actions satisfy the business judgment rule, then the transaction in question should be approved under Bankruptcy Code Section 363(b)(1). When applying the business judgment standard, courts show great deference to a debtor’s business decisions. In the Matter of

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ASARCO, L.L.C. v. Elliott Mgmt. (In re ASARCO, L.L.C.), 650 F.3d at 601; In re Terrace Gardens ParkP’ship, 96 B.R. 707, 715 (Bankr. W.D. Tex. 1989). 18. The relief requested by the Debtors represents a sound exercise of the Debtors’ business judgment and is justified under Bankruptcy Code §§ 105(a) and 363(b). Such sale procedures will preserve value for their estates, and the Agent has consented to the implementation of such procedures prior to the filing of this Amended Motion to Sell Personal Property. The Debtors believe that these sale procedures are the most efficient and appropriate means of maximizing the value of the Debtors’ assets, while balancing the competing concerns of other parties in interest. 19. The Debtors request approval to conduct sales of de minimis personal property assets under the sale procedures on a final “as is” basis, free and clear of any and all liens, claims, and encumbrances in accordance with Bankruptcy Code § 363(f), with all such liens attaching to the remaining net proceeds of such assets with the same force, validity, effect, and priority as such liens have on such assets immediately prior to such sale. A debtor in possession may sell property under Sections 363(b) and 363(f) “free and clear of any interest in such property of an entity other than the estate” if any one of the following conditions is satisfied: (i) applicable non-bankruptcy law permits sale of such property free and clear of such interest; (ii) such entity consents; (iii) such interest is a lien and the price at which such property is to be sold is greater than the aggregate value of all liens on such property; (iv) such interest is in bona fide dispute; or (v) such entity could be compelled, in a legal or equitable proceeding, to accept a money satisfaction of such interest. § 363(f). 20. The Debtors anticipate that, to the extent there are liens on the assets sold pursuant to the sale procedures, all holders of such liens have, or will, consent to the sales contemplated by this Motion because they provide the most effective, efficient, and time-sensitive approach to realizing proceeds for, among other things, the repayment of amounts due to such parties. Any and all liens on the assets sold pursuant to the sale procedures would attach to the remaining net proceeds of such

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sales with the same force, validity, effect, and priority as such liens currently have on these assets, subject to the rights and defenses, if any, of the Debtors and of any parties in interest with respect thereto. Accordingly, the Debtors submit that the statutory requirements of Bankruptcy Code Section 363(f) are satisfied and should, therefore, be sold free and clear of any liens, claims, encumbrances, and other interests. VI. REQUEST FOR WAIVER OF STAY 21. Because time is of the essence in regard to the proposed sale procedures, the Debtors request that the Court waive the 14-day stay (a) provided in Bankruptcy Rule 6004(h) in all orders requested to be entered herein. VII. RESERVATION OF RIGHTS 22. Nothing contained herein is intended to be or shall be deemed as (a) an admission as to the validity of any claim against the Debtors; (b) a waiver of the Debtors’ or any appropriate party in interest’s rights to dispute the amount of, basis for, or validity of any claim; (c) a waiver or limitation of the Debtors’ rights under the Bankruptcy Code or any other applicable nonbankruptcy law; or (d) a waiver of the rights of parties in interest to contest whether any of the interests described herein constitute property of the Debtors’ estate. The Debtors expressly reserve all of their rights with respect to the foregoing matters. Likewise, if the Court grants the relief sought herein, any payment made pursuant to the Court’s order is not intended to be and should not be construed as an admission to the validity of any claim or a waiver of the Debtors’ or any party in interest’s rights to subsequently dispute and/or contest such claim.

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VIII. NOTICE 23. Notice of this Application will be provided to all parties listed on the Debtors’ current complex service list as of the day of this filing (collectively, the “Notice Parties”). WHEREFORE, the Debtors respectfully request that this Court enter an Order, substantially in the form of Exhibit “A” hereto (i) approving and authorizing the sale procedures for de minimis personal property, in each case subject to prior written consent of the Agent; and (iv) awarding the Debtors such other and further relief as this Court may deem just and proper. DATED: February 5, 2021 Respectfully submitted, LAW OFFICES OF FRANK J. WRIGHT, PLLC By: /s / Frank J. Wright 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 COUNSEL TO DEBTORS AND DEBTORS-IN-POSSESSION, STUDIO MOVIE GRILL HOLDINGS, LLC, et al. CERTIFICATE OF SERVICE I certify that a true and correct copy of the forgoing document was served on the 5th day of February, 2021 by electronic transmission through the Court’s automated Case Management and Electronic Docketing System for the U. S. Bankruptcy Court for the Northern District of Texas. /s/ Jeffery M. Veteto Jeffery M. Veteto