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Full title: Objection to confirmation of planand Second Supplement to Second Amended Plan (RE: related document(s)700 Chapter 11 plan) filed by Creditor Rosedale Bakersfield Retail VI, LLC. (Ballard, Glenn)

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

Bankrupt11 Summary (Automatically Generated)

(“Rosedale”), a lessor, creditor and party in interest, objects to the confirmation of Debtors’ Second Amended Plan of Reorganization and Debtors’ Second Supplement to the Second Amended Joint Plan of Reorganization, filed as Documents Nos. 700 and 705, and respectfully represents: OBJECTION OF ROSEDALE I. FACTUAL BACKGROUND AND LIMITED OBJECTION 1.On Monday, March 8, 2021, Debtors filed their Second Supplement to the Second Amended Joint Plan of Reorganization for Studio Movie Grill Holdings, LLC and Jointly Administered Debtors as Document 705 (“Second Supplement”).), the court struck non-debtor releases, stating that § 524(e) does not release co-liable third parties and citing several Fifth Circuit cases as to “seem broadly to foreclose non-consensual non-debtor releases and injunctions.”Wherefore, Rosedale Bakersfield Retail VI, LLC objects to confirmation of Debtors’ Second Amended Plan of Reorganization unless the contents of the Second Supplement to the Second Amended Joint Plan of Reorganization, Exhibit L-2, schedule of Real Property Leases to be Assumed, is corrected to reflect the deferred cure amount of $ 736,370.19 due to Rosedale and Debtors prove that their Second Amended Plan is feasible.Email: Jess.Bressi@Dentons.com Counsel for Rosedale Bakersfield Retail VI, LLC OBJECTION OF ROSEDALE March 10, 2021.

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Glenn A. Ballard, Jr. Texas Bar No. 01650200 2000 McKinney Ave., Suite 1900 Houston, Texas 77201 Tel: (214) 259-0999 Email: Glenn.Ballard@Dentons.com -and- Jess R. Bressi (admitted pro hac vice) California State Bar No. 110264 4675 MacArthur Court, Suite 1250 Newport Beach, California 92660 Tel: (949) 241-8967 Email: Jess.Bressi@Dentons.com Counsel for Rosedale Bakersfield Retail VI, LLC 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 Jointly Administered LIMITED OBJECTION OF ROSEDALE BAKERSFIELD RETAIL VI, LLC TO CONFIRMATION OF SECOND AMENDED PLAN OF REORGANIZATION AND TO SECOND AMENDED PLAN SUPPLEMENT (Ref. Doc. 700 and 705) TO THE HONORABLE STACY G. C. JERNIGAN, UNITED STATES BANKRUPTCY JUDGE: Rosedale Bakersfield Retail VI, LLC (“Rosedale”), a lessor, creditor and party in interest, objects to the confirmation of Debtors’ Second Amended Plan of Reorganization and Debtors’ Second Supplement to the Second Amended Joint Plan of Reorganization, filed as Documents Nos. 700 and 705, and respectfully represents: OBJECTION OF ROSEDALE

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I. FACTUAL BACKGROUND AND LIMITED OBJECTION 1. Rosedale is the landlord of an unexpired lease with one of the Debtors’ entities, Movie Grill Concepts XXXV, LLC, as assignee of Movie Grill Concepts XX, LLC. Movie Grill Concepts XXXV, LLC is the tenant of 46,311 square feet of space in the Rosedale Village Shopping Center, 2733 Calloway Dr., Bakersfield, CA 93312 (the “Premises”) in which Movie Grill Concepts XXXV operates a dine in movie theater business, pursuant to the terms of a written shopping center Lease dated December 30,2016 (the “Lease”). 2. Debtor Movie Grill Concepts XX, LLC assigned the Lease to Debtor Movie Grill Concepts XXXV, LLC by a letter dated “August __, 2020.”1 3. On Friday, March 5, 2021, Debtors filed their Second Amended Joint Plan of Reorganization for Studio Movie Grill Holdings, LLC and Jointly Administered Debtors as Document 700. On Monday, March 8, 2021, Debtors filed their Second Supplement to the Second Amended Joint Plan of Reorganization for Studio Movie Grill Holdings, LLC and Jointly Administered Debtors as Document 705 (“Second Supplement”). 4. One of the exhibits to the Second Supplement is Exhibit L-2, “Real Property Leases to be Assumed,” Document 705-4, filed March 8, 2021. On page 3 of Exhibit L-2, the column entitled “Cure Deferred per Agreement**,” fifth row from top, there are Debtors’ entries relating to Rosedale. Debtors indicate that the “Cure Deferred” to Rosedale is $0. In fact, the Cure Deferred and owed Rosedale is $736,370.19. See attached Aged Deficiencies Report for Debtors, Exhibit 1 hereto. As part of the confirmation process, Debtors must demonstrate that 1 Neither of these Debtors requested Landlord’s consent to the assignment because they claimed that the assignment was a “Permitted Transfer” pursuant to Section 12.4(ii) of the Lease which permits a Transfer to “(ii) to any subsidiary corporation or “affiliate” (as herein defined) of Tenant, or Tenant’s parent corporation.” Rosedale does not know if this is true or not but assumes that it is for the limited purposes of this objection. OBJECTION OF ROSEDALE

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their Plan is feasible (11 U.S.C. §1129(a)(11))2 and that they can pay Rosedale over the remaining 33-months of payments the deferred cure equally $736,370.19 plus contractual interest. Feasibility refers to the Bankruptcy Code’s requirement that plan confirmation must not be “likely to be followed by the liquidation, or the need for further financial reorganization, of the debtor . . . , unless such liquidation or reorganization is proposed in the plan.” To satisfy this standard, the Fifth Circuit has held that a plan needs to have a “reasonable probability of success.”3 In particular, according to Fifth Circuit law, “[w]here the projections are credible, based upon the balancing of all testimony, evidence, and documentation, even if the projections are aggressive, the court may find the plan feasible.”4 Not only must Debtors demonstrate feasibility as to the unscheduled deferred payments owed Rosedale, but Debtors must show it as to all other landlords with deferred cure agreements, whether they were scheduled on Exhibit L-2 or not. II. ROSEDALE INCORPORATES BY REFERENCE ITS OBJECTION TO THE INCORRECT CURE AMOUNT. 6. Previously, on January 13, 2021, as Doc. 454, Rosedale filed its “Objection of Rosedale Bakersfield Retail VI, LLC to Assumption Including Cure Amount in Amended Notice of Unexpired Leases Which May Be Assumed, Etc. (Ref. Doc. 364).” Rosedale incorporates by reference this previous objection it filed as Debtors scheduled no pre-petition arrearage due Rosedale in their Schedules to the Disclosure Statement. 2 In re T-H New Orleans Ltd. P’ship, 116 F.3d 790, 801 (5th Cir. 1997) (quoting In re Landing Assocs., Ltd., 157 B.R. 791, 820 (Bankr. W.D. Tex. 1993)) and In re Star Ambulance Service, LLC, 540 B.R. 251, 266 (Bankr. S.D. Tex. Aug. 24, 2015). 3 Id. 4 Id. OBJECTION OF ROSEDALE

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III. NON-DEBTOR RELEASES AND INJUNCTIONS 7. Rosedale opts out of and objects to the releases in Article VIII. D. of the Plan and to any other provision in the Plan which attempts to release non-debtor third parties or enjoin creditors from pursuing such non-debtor third parties. 8. The non-Debtor third party release language is in conflict with § 524(e) of the Bankruptcy Code and Fifth Circuit precedent. In Bank of New York Trust Co. v. Official Unsecured Creditor Comm. (In re Pacific Lumber), 584 F.3d 229 (5th Cir. 2009), the court struck non-debtor releases, stating that § 524(e) does not release co-liable third parties and citing several Fifth Circuit cases as to “seem broadly to foreclose non-consensual non-debtor releases and injunctions.” IV. RESERVATION OF RIGHT TO RESPOND TO CONFIRMATION MEMORANDUM 9. As of the date this Objection was prepared for filing, the Debtors have not filed their memorandum in support of confirmation of the Plan. To the extent any such memorandum is filed before the confirmation hearing on the Plan, Rosedale reserves the right to respond to any such memorandum at or prior to the confirmation hearing. V. JOINDER IN OBJECTIONS 10. Rosedale joins in the objections to confirmation and the proposed assumption and assignment of Debtors’ unexpired leases filed by Debtors’ other landlords and adopts the arguments and authorities advanced in such objections to the extent not inconsistent with Rosedale’s position. OBJECTION OF ROSEDALE

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VI. RESERVATION OF RIGHTS 11. Rosedale reserves all of its rights, including without limitation its rights under Sections 365 and 503 of the Bankruptcy Code. VII. CONSULTATION WITH COUNSEL 12. On March 8 and 9, 2021, co-counsel Jess Bressi emailed Debtors’ counsel Rosedale’s confirmation concerns and seeking a correction or consultation prior to filing an objection. To date, there has been no response VIII. CONCLUSION Wherefore, Rosedale Bakersfield Retail VI, LLC objects to confirmation of Debtors’ Second Amended Plan of Reorganization unless the contents of the Second Supplement to the Second Amended Joint Plan of Reorganization, Exhibit L-2, schedule of Real Property Leases to be Assumed, is corrected to reflect the deferred cure amount of $ 736,370.19 due to Rosedale and Debtors prove that their Second Amended Plan is feasible. Respectfully submitted, March 10, 2021 DENTONS US LLP By: /s/ Glenn A. Ballard, Jr. Glenn A. Ballard, Jr. Texas Bar No. 01650200 2000 McKinney Street, Suite 1900 Dallas, Texas 77201 Tel: (214) 259-0999 Email: Glenn.Ballard@Dentons.com -and- OBJECTION OF ROSEDALE

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By: /s/ Jess R. Bressi Jess R. Bressi (Admitted pro hac vice) California State Bar No. 110264 4675 MacArthur Court, Suite 1250 Newport Beach, CA 92660 Tel: (949) 241-8967 Email: Jess.Bressi@Dentons.com Counsel for Rosedale Bakersfield Retail VI, LLC OBJECTION OF ROSEDALE

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March 10, 2021. /s/ Jess R. Bressi Jess R. Bressi CASE NO. 20-32633-11

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Period: 03/21 ce Date Category Source Amount Current 1 Month 2 Months 3 Months 4 008072 STUDIO MOVIE GRILL Master Occupant Id: STUDIOGR-1 Day Due: 1 Delq Day: 2733 Current Last Payment: 3/5/2021 118, 020 LAT LATE CHARGES CH 250.00 0.00 0.00 0.00 0.00 2 20 BAS BASE RENT CH 77,185.00 0.00 0.00 0.00 0.00 77,1 20 CAM COMMON AREA MAINT CH 13,023.39 0.00 0.00 0.00 0.00 13,020 INS INSURANCE-CAM CH 1,349.33 0.00 0.00 0.00 0.00 1,3 20 RET REAL ESTATE TAX CH 7,494.67 0.00 0.00 0.00 0.00 7,4 020 LAT LATE CHARGES CH 250.00 0.00 0.00 0.00 0.00 2 20 BAS BASE RENT CH 77,185.00 0.00 0.00 0.00 0.00 77,1 20 CAM COMMON AREA MAINT CH 13,023.39 0.00 0.00 0.00 0.00 13,020 INS INSURANCE-CAM CH 1,349.33 0.00 0.00 0.00 0.00 1,3 20 RET REAL ESTATE TAX CH 7,494.67 0.00 0.00 0.00 0.00 7,4 20 BAS BASE RENT CH 77,185.00 0.00 0.00 0.00 0.00 77,1 20 CAM COMMON AREA MAINT CH 13,023.39 0.00 0.00 0.00 0.00 13,020 INS INSURANCE-CAM CH 1,349.33 0.00 0.00 0.00 0.00 1,3 20 RET REAL ESTATE TAX CH 7,494.67 0.00 0.00 0.00 0.00 7,4 20 BAS BASE RENT CH 77,185.00 0.00 0.00 0.00 0.00 77,1 20 CAM COMMON AREA MAINT CH 13,023.39 0.00 0.00 0.00 0.00 13,020 INS INSURANCE-CAM CH 1,349.33 0.00 0.00 0.00 0.00 1,3 20 RET REAL ESTATE TAX CH 7,494.67 0.00 0.00 0.00 0.00 7,4 020 PYC PRIOR YEAR CAM NC -327.79 0.00 0.00 0.00 0.00 -3 20 BAS BASE RENT CH 76,832.51 0.00 0.00 0.00 0.00 76,8 20 CAM COMMON AREA MAINT CH 13,023.39 0.00 0.00 0.00 0.00 13,020 INS INSURANCE-CAM CH 1,349.33 0.00 0.00 0.00 0.00 1,3 20 RET REAL ESTATE TAX CH 7,494.67 0.00 0.00 0.00 0.00 7,4 20 BAS BASE RENT CH 77,185.00 0.00 0.00 0.00 0.00 77,1 20 CAM COMMON AREA MAINT CH 13,023.39 0.00 0.00 0.00 0.00 13,020 INS INSURANCE-CAM CH 1,349.33 0.00 0.00 0.00 0.00 1,3 20 RET REAL ESTATE TAX CH 7,494.67 0.00 0.00 0.00 0.00 7,4 20 BAS BASE RENT CH 77,185.00 0.00 0.00 0.00 0.00 77,1 20 CAM COMMON AREA MAINT CH 13,023.39 0.00 0.00 0.00 0.00 13,020 INS INSURANCE-CAM CH 1,349.33 0.00 0.00 0.00 0.00 1,3 20 RET REAL ESTATE TAX CH 7,494.67 0.00 0.00 0.00 0.00 7,4 020 BAS BASE RENT CH 77,185.00 0.00 0.00 0.00 0.00 77,1 020 CAM COMMON AREA MAINT CH 13,023.39 0.00 0.00 0.00 0.00 13,0020 INS INSURANCE-CAM CH 1,349.33 0.00 0.00 0.00 0.00 1,3 020 RET REAL ESTATE TAX CH 7,494.67 0.00 0.00 0.00 0.00 7,4 /2020 PPR PREPAID RENT CR -1,034.68 0.00 0.00 0.00 -1,034.68021 PPR PREPAID RENT CR -9,245.33 0.00 0.00 -9,245.33 0.00 21 PPR PREPAID RENT CR -27,381.78 0.00 -27,381.78 0.00 0.00 21 PPR PREPAID RENT CR -20,206.86 -20,206.86 0.00 0.00 0.00 BAS BASE RENT 617,127.51 0.00 0.00 0.00 0.00 617,CAM COMMON AREA MAINT 104,187.12 0.00 0.00 0.00 0.00 104,INS INSURANCE-CAM 10,794.64 0.00 0.00 0.00 0.00 10,LAT LATE CHARGES 500.00 0.00 0.00 0.00 0.00 PPR PREPAID RENT -57,868.65 -20,206.86 -27,381.78 -9,245.33 -1,034.68PYC PRIOR YEAR CAM -327.79 0.00 0.00 0.00 0.00 - RET REAL ESTATE TAX 59,957.36 0.00 0.00 0.00 0.00 59,STUDIO MOVIE GRILL Total: 734,370.19 -20,206.86 -27,381.78 -9,245.33 -1,034.68 792,BAS BASE RENT 617,127.51 0.00 0.00 0.00 0.00 617,CAM COMMON AREA MAINT 104,187.12 0.00 0.00 0.00 0.00 104,

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Period: 03/21 ce Date Category Source Amount Current 1 Month 2 Months 3 Months 4 PYC PRIOR YEAR CAM -327.79 0.00 0.00 0.00 0.00 - RET REAL ESTATE TAX 59,957.36 0.00 0.00 0.00 0.00 59,BLDG 155 Total: 734,370.19 -20,206.86 -27,381.78 -9,245.33 -1,034.68 792,BAS BASE RENT 617,127.51 0.00 0.00 0.00 0.00 617,CAM COMMON AREA MAINT 104,187.12 0.00 0.00 0.00 0.00 104,INS INSURANCE-CAM 10,794.64 0.00 0.00 0.00 0.00 10,LAT LATE CHARGES 500.00 0.00 0.00 0.00 0.00 PPR PREPAID RENT -57,868.65 -20,206.86 -27,381.78 -9,245.33 -1,034.68PYC PRIOR YEAR CAM -327.79 0.00 0.00 0.00 0.00 - RET REAL ESTATE TAX 59,957.36 0.00 0.00 0.00 0.00 59,Grand Total: 734,370.19 -20,206.86 -27,381.78 -9,245.33 -1,034.68 792,