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Full title: Application for administrative expenses / Workday's Application for Allowance and Payment of Administrative Claim and Reservation of Rights Filed by Creditor Workday, Inc. Objections due by 3/8/2021. (Penn, John)

Document posted on Feb 14, 2021 in the bankruptcy, 17 pages and 0 tables.

Bankrupt11 Summary (Automatically Generated)

(“Workday”) submits this Application for Allowance and Payment of Administrative Claim and Reservation of Rights (“Application”) under 11 USC §§ 503(b)(1) and 507(a)(2) for fees corresponding to postpetition services provided to the Debtor Movie Grill Concepts Trademark Holdings, LLC (“Movie Grill”).And where a debtor “indicates a desire to retain the technical services that [creditor] 5 Workday reserves the right to submit additional applications for allowance and payment of administrative claim related to Movie Grill’s continued access and use of services under the Agreement after January 31, 2021, for which there is currently no bar date.Here, Movie Grill has proactively accessed and used Workday’s services postpetition.Because Movie Grill has not paid Workday for the services that were provided postpetition, Workday is entitled to allowance and immediate payment of its administrative priority claim under §§ 503(b)(1) and 507(a)(2).Ship To: Movie Grill Concepts Trademark Holdings, LLC Movie Grill Concepts Trademark Holdings, LLC12404 Park Central Drive 12404 Park Central Drive Dallas, TX 75251 Dallas, TX 75251

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John D. Penn PERKINS COIE LLP 500 N. Akard Street, Suite 3300 Dallas, Texas 75201-3347 Telephone: 214.965.7734 Facsimile: 214.965.7784 JPenn@perkinscoie.com Attorneys for Workday, Inc. UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION In re Chapter 11 STUDIO MOVIE GRILL HOLDINGS, LLC, Case No. 20-32633-SGJ-11 et al., Jointly Administered Debtors. WORKDAY’S APPLICATION FOR ALLOWANCE AND PAYMENT OF ADMINISTRATIVE CLAIM AND RESERVATION OF RIGHTS THIS APPLICATION SEEKS AN ORDER FOR ALLOWANCE AND IMMEDIATE PAYMENT OF WORKDAY, INC.’S ADMINISTRATIVE PRIORITY CLAIM IN THE AMOUNT OF $227,011.97. NO HEARING WILL BE CONDUCTED HEREON UNLESS A WRITTEN RESPONSE IS FILED WITH THE CLERK OF THE UNITED STATES BANKRUPTCY COURT AT EARLE CABELL FEDERAL BUILDING, 1100 COMMERCE ST., RM. 1254, DALLAS, TEXAS 75242-1496 BEFORE CLOSE OF BUSINESS ON MARCH 8, 2021, WHICH IS AT LEAST 21 DAYS FROM THE DATE OF SERVICE HEREOF. ANY RESPONSE SHALL BE IN WRITING AND FILED WITH THE CLERK, AND A COPY SHALL BE SERVED UPON COUNSEL FOR THE MOVING PARTY PRIOR TO THE DATE AND TIME SET FORTH HEREIN. IF A RESPONSE IS FILED A HEARING MAY BE HELD WITH NOTICE ONLY TO THE OBJECTING PARTY. IF NO HEARING ON SUCH NOTICE OR MOTION IS TIMELY REQUESTED, THE RELIEF REQUESTED SHALL BE DEEMED TO BE UNOPPOSED, AND THE COURT MAY ENTER AN ORDER GRANTING THE RELIEF SOUGHT OR THE NOTICED ACTION MAY BE TAKEN. Workday, Inc. (“Workday”) submits this Application for Allowance and Payment of Administrative Claim and Reservation of Rights (“Application”) under 11 USC §§ 503(b)(1) and

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507(a)(2) for fees corresponding to postpetition services provided to the Debtor Movie Grill Concepts Trademark Holdings, LLC (“Movie Grill”). In support of this Application, Workday respectfully states as follows: I. JURISDICTION 1. The Court has jurisdiction over this Application under 28 U.S.C. §§ 157 and 1334. This matter is a core proceeding pursuant to 28 U.S.C. § 157(b). Venue is proper under 28 U.S.C. §§ 1408 and 1409. 2. The statutory basis for the relief sought in this Application arises under Bankruptcy Code §§ 105, 503(b)(1), and 507(a)(2). II. BACKGROUND 3. The Debtors filed a chapter 11 petition on October 23, 2020 (“Petition Date”). 4. Movie Grill and Workday are parties to a Master Subscription Agreement dated September 29, 2017 (“Agreement”). Under the Agreement, Movie Grill uses payroll, human resource, and other cloud-based enterprise management services provided by Workday. Also on September 29, 2017, Movie Grill and Workday entered into Order Form #00101104.0 to Master Subscription Agreement (“MSA”) (“Order”), which set the Agreement’s and Order’s term as October 31, 2017 through October 30, 2020. Movie Grill and Workday subsequently executed Amendment #1 to Order Form #101104 dated April 15, 2019 (“Order Amendment”), which extended the Agreement’s and Order’s term through June 1, 2021. 5. After the Petition Date, Movie Grill continues to use Workday’s services under the Agreement. Movie Grill needs and uses Workday’s services postpetition to manage payroll, manage employee benefits, and administer HR.

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6. Movie Grill’s postpetition access and use of Workday’s services remains active. Postpetition, Movie Grill has continually and consistently accessed services through Workday’s cloud-based platform. 7. The services provided by Workday—particularly managing payroll, managing employee benefits, and HR services—are actual and necessary to maintain Movie Grill’s business continuity and maximize the value of the estate. 8. Under the Agreement, as amended by the Order Amendment, Workday’s services were billed to Movie Grill through a monthly Subscription Fee. A monthly Subscription Fee of $69,676.95 was billed on October 1, 2020,1 which covered Movie Grill’s access and services through October 31, 2020. Monthly Subscription Fees of $69,676.95 were subsequently billed on November 1, 2020,2 December 1, 2020,3 and January 1, 2021,4 which covered Movie Grill’s access and services through November 30, 2020, December 31, 2020, and January 31, 2021, respectively. 9. Movie Grill has continued to use and benefit from services under the Agreement for at least three months postpetition—from the October 23, 2020 Petition Date through at least January 31, 2021. The monthly Subscription Fee of $69,676.95 is equal to $2,247.64 per day for the month of October on a prorated basis ($69,676.95 ÷ 31 days). Thus, the value of postpetition services utilized by Movie Grill under the Agreement equals at least $227,011.97 (3 months of 1 The Subscription Fee was invoiced to Movie Grill on September 1, 2020 under Invoice WD-181043, attached to this application as Exhibit 2. 2 The Subscription Fee was invoiced to Movie Grill on October 2, 2020 under Invoice WD-183507, attached to this application as Exhibit 3. 3 The Subscription Fee was invoiced to Movie Grill on November 1, 2020 under Invoice WD-186507, attached to this application as Exhibit 4. 4 The Subscription Fee was invoiced to Movie Grill on December 2, 2020 under Invoice WD-189568, attached to this application as Exhibit 5.

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Subscription Fees for November 2020, December 2020, and January 2021, plus $17,981.12 for 8 days of postpetition services in October 2020). III. RELIEF REQUESTED 10. Workday respectfully requests the Court enter an order for allowance and immediate payment of its administrative priority claim in the amount of $227,011.97, representing postpetition Subscription Fees through January 31, 2021.5 IV. ARGUMENT 11. Section 507(a)(2) of the Bankruptcy Code gives priority to “Administrative Expenses” allowed under §503(b)(1). Section 503(b)(1) defines Administrative Expenses as “the actual, necessary costs and expenses of preserving the estate.” To qualify as an administrative expense, a claim must (1) arise out of a post-petition transaction and (2) be beneficial to the bankruptcy estate.6 12. “‘If the debtor-in-possession elects to continue to receive benefits from the other party to an executory contract pending a decision to reject or assume the contract, the debtor-in-possession is obligated to pay for the reasonable value of those services.’”7 A seminal First Circuit decision regarding administrative expense claims noted that, “When third parties are induced to supply goods or services to the debtor-in-possession pursuant to a contract that has not been rejected, the purposes of [administrative claims] plainly require that their claims be afforded priority.”8 And where a debtor “indicates a desire to retain the technical services that [creditor] 5 Workday reserves the right to submit additional applications for allowance and payment of administrative claim related to Movie Grill’s continued access and use of services under the Agreement after January 31, 2021, for which there is currently no bar date. [See Notice of Interim Administrative Claim Bar Date at 2] 6 In re Jack/Wade Drilling, Inc., 258 F.3d 385, 387 (5th Cir. 2001). 7 Matter of Continental Airlines, Inc., 146 B.R. 520, 526 (Bankr. D. Del. 1992) (quoting N.L.R.B. v. Bildisco & Bildisco, 465 U.S. 513, 531 (1984)). 8 In re Mammoth Mart, Inc., 536 F.2d 950, 954 (1st Cir. 1976).

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provided, rather than mere passive possession of property” and the debtor continues to use the technical services, the creditor’s postpetition provision of those services was owed administrative priority.9 13. Here, Movie Grill has proactively accessed and used Workday’s services postpetition. Movie Grill has consistently logged into Workday’s cloud-based platform to process payroll, administer benefits, and complete other tasks necessary to manage Movie Grill’s workforce. The bankruptcy estate has materially benefitted from those services, as those services are actual and necessary for Movie Grill to maintain operations. The value of those postpetition services is $227,011.97. 14. Because Movie Grill has not paid Workday for the services that were provided postpetition, Workday is entitled to allowance and immediate payment of its administrative priority claim under §§ 503(b)(1) and 507(a)(2). V. RESERVATION OF RIGHTS 15. Workday reserves the right to amend this Application should additional information become available or additional obligations due under the Agreement be discovered or come due. Workday reserves all of its rights, claims, defenses, and remedies under terms of the Agreement, the bankruptcy code, and other applicable law. For the reasons above, Workday respectfully requests that the Court enter an order, in the form attached to this Application as Exhibit 1, allowing and directing immediate payment of its administrative priority claim in the amount of $227,011.97, and for such other and further relief as the Court deems just and appropriate. 9 In re Native Am. Sys., Inc., 351 B.R. 135, 142 (B.A.P. 10th Cir. 2006); see also Broadcast Corp. of Georgia v. Broadfoot, 54 B.R. 606, 608 (N.D. Ga. 1985) (allowing administrative claim for 17-day postpetition period that debtor continued to use the creditor broadcasting company’s broadcasting services).

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Dated: February 15, 2021 Respectfully submitted, /s/ John D. Penn John D. Penn Texas Bar No. 15752300 Perkins Coie LLP 500 N. Akard Street, Suite 3300 Dallas, Texas 75201-3347 Telephone: 214.965.7734 Facsimile: 214.965.7784 JPenn@perkinscoie.com Attorneys for Workday, Inc.

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CERTIFICATE OF SERVICE The undersigned certifies that, on February 15, 2021, a true and correct copy of the foregoing document was served via the Court’s Electronic Case Filing (ECF) system upon all parties registered to receive electronic notices in this case, including the Debtors, the Office of the United States Trustee, and counsel for the Official Committee of Unsecured Creditors. /s/ John D. Penn John D. Penn

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EXHIBIT 1

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UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION In re Chapter 11 STUDIO MOVIE GRILL HOLDINGS, LLC, Case No. 20-32633-SGJ-11 et al., Jointly Administered Debtors. ORDER GRANTING WORKDAY’S APPLICATION FOR ALLOWANCE AND PAYMENT OF ADMINISTRATIVE CLAIM AND RESERVATION OF RIGHTS On Workday’s Application for Allowance and Payment of Administrative Claim and Reservation of Rights (“Application”) [Doc. ___]; and it appearing that due and proper notice of the Application has been given; and after due deliberation and sufficient cause appearing, it is ORDERED: 1. The Application is GRANTED. 2. Workday, Inc. has an allowed administrative expense claim in the amount of $227,011.97. 3. The Debtors are directed to pay Workday, Inc. within 10 days of entry of this order. 4. This Court retains exclusive jurisdiction with respect to all matters arising from or related to the implementation, interpretation, and enforcement of this order. # # # END OF ORDER # # #

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EXHIBIT 2

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Invoice Number: WD-181043 kday, Inc. Invoice Date: September 1, 2020 0 Stoneridge Mall Road Due Date: October 1, 2020 santon, CA 94588 Terms: Net 30 ed States of America eral Tax ID: 20-2480422 PO Number: +1 (925) 951-9522 Amount Due: USD 69,676.95 Bill To: Ship To: Movie Grill Concepts Trademark Holdings, LLC Movie Grill Concepts Trademark Holdings, LLC12404 Park Central Drive 12404 Park Central Drive Dallas, TX 75251 Dallas, TX 75251 United States of America United States of America o: Amend 1 to OF 101104payment 16.0 of 24 Description Invoice Line Memo Amo rkday Enterprise Cloud Application Subscription Fee 65,363 Net Amount 65,363 Tax: 4,313 Total USD 69,676 se Remit Payments To: Electronic Funds Transfer (preferred): Via Mail: k: Wells Fargo Bank, Palo Alto, CA WORKDAY, INC. # (Wire): 121 000 248 P.O. Box 396106 # (ACH): 321 270 742 San Francisco, CA 94139-6106 ount #: 765-5094592

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EXHIBIT 3

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Invoice Number: WD-183507 kday, Inc. Invoice Date: October 2, 2020 0 Stoneridge Mall Road Due Date: November 1, 2020 santon, CA 94588 Terms: Net 30 ed States of America eral Tax ID: 20-2480422 PO Number: +1 (925) 951-9522 Amount Due: USD 69,676.95 Bill To: Ship To: Movie Grill Concepts Trademark Holdings, LLC Movie Grill Concepts Trademark Holdings, LLC12404 Park Central Drive 12404 Park Central Drive Dallas, TX 75251 Dallas, TX 75251 United States of America United States of America o: Amend 1 to OF 101104payment 17.0 of 24 Description Invoice Line Memo Amo rkday Enterprise Cloud Application Subscription Fee 65,363 Net Amount 65,363 Tax: 4,313 Total USD 69,676 se Remit Payments To: Electronic Funds Transfer (preferred): Via Mail: k: Wells Fargo Bank, Palo Alto, CA WORKDAY, INC. # (Wire): 121 000 248 P.O. Box 396106 # (ACH): 321 270 742 San Francisco, CA 94139-6106 ount #: 765-5094592

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EXHIBIT 4

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Invoice Number: WD-186507 kday, Inc. Invoice Date: November 1, 2020 0 Stoneridge Mall Road Due Date: December 1, 2020 santon, CA 94588 Terms: Net 30 ed States of America eral Tax ID: 20-2480422 PO Number: +1 (925) 951-9522 Amount Due: USD 69,676.95 Bill To: Ship To: Movie Grill Concepts Trademark Holdings, LLC Movie Grill Concepts Trademark Holdings, LLC12404 Park Central Drive 12404 Park Central Drive Dallas, TX 75251 Dallas, TX 75251 United States of America United States of America o: Amend 1 to OF 101104payment 18.0 of 24 Description Invoice Line Memo Amo rkday Enterprise Cloud Application Subscription Fee 65,363 Net Amount 65,363 Tax: 4,313 Total USD 69,676 se Remit Payments To: Electronic Funds Transfer (preferred): Via Mail: k: Wells Fargo Bank, Palo Alto, CA WORKDAY, INC. # (Wire): 121 000 248 P.O. Box 396106 # (ACH): 321 270 742 San Francisco, CA 94139-6106 ount #: 765-5094592

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EXHIBIT 5

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Invoice Number: WD-189568 kday, Inc. Invoice Date: December 2, 2020 0 Stoneridge Mall Road Due Date: January 1, 2021 santon, CA 94588 Terms: Net 30 ed States of America eral Tax ID: 20-2480422 PO Number: +1 (925) 951-9522 Amount Due: USD 69,676.95 Bill To: Ship To: Movie Grill Concepts Trademark Holdings, LLC Movie Grill Concepts Trademark Holdings, LLC12404 Park Central Drive 12404 Park Central Drive Dallas, TX 75251 Dallas, TX 75251 United States of America United States of America o: Amend 1 to OF 101104payment 19.0 of 24 Description Invoice Line Memo Amo rkday Enterprise Cloud Application Subscription Fee 65,363 Net Amount 65,363 Tax: 4,313 Total USD 69,676 se Remit Payments To: Electronic Funds Transfer (preferred): Via Mail: k: Wells Fargo Bank, Palo Alto, CA WORKDAY, INC. # (Wire): 121 000 248 P.O. Box 396106 # (ACH): 321 270 742 San Francisco, CA 94139-6106 ount #: 765-5094592