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Full title: Objection to (related document(s): 653 Motion to compel Allowance and Immediate Payment of PACA Claims and Other Relief. filed by Creditor Family Tree Produce, Inc., Creditor Piazza Produce, LLC, Creditor Hardie's Fruit & Vegetable Company, LP, Creditor Royal Food Service, Inc.) filed by Debtor Studio Movie Grill Holdings, LLC. (Wright, Frank)

Document posted on Mar 18, 2021 in the bankruptcy, 6 pages and 0 tables.

Bankrupt11 Summary (Automatically Generated)

HOLDINGS, LLC, et al., § § (Jointly Administered) Debtors.1 § 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 DEBTORS’ OBJECTION TO MOTION OF CERTAIN PACA CREDITORS TO COMPEL ALLOWANCE AND IMMEDIATE PAYMENT OF PACA CLAIMS AND OTHER RELIEF Studio Holdings, LLC and its debtor affiliates, as debtors and debtors in possession in the above-captioned chapter 11 cases (collectively, the “Debtors” or “SMG”), file this Objection (the “Objection”) to the Motion of Certain PACA C

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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 COUNSEL TO DEBTORS AND DEBTORS-IN-POSSESSION IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION § In re: § Chapter 11 § STUDIO MOVIE GRILL § Case No. 20-32633-SGJ HOLDINGS, LLC, et al., § § (Jointly Administered) Debtors.1 § 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 MOTION OF CERTAIN PACA CREDITORS TO COMPEL ALLOWANCE AND IMMEDIATE PAYMENT OF PACA CLAIMS AND OTHER RELIEF 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 “SMG”), file this Objection (the “Objection”) to the Motion of Certain PACA Creditors to Compel Allowance and Immediate Payment of PACA Claims and Other Relief (the “Motion”) filed by Family Tree Produce, Inc., Hardie’s Fruit & Vegetable Company, LP, Piazza Produce, LLC, and Royal Food Service, Inc. (collectively, the “Movants”), and respectfully state as follows: I. BACKGROUND 1. 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 Sections 1107 and 1108 of the Bankruptcy Code. 2. An official committee of unsecured creditors has been appointed in these Chapter 11 Cases. No trustee or examiner has been requested or appointed in these Chapter 11 Cases. 3. 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, North Carolina, Pennsylvania, Texas, Indiana, and Virginia. All theaters operate under the brand name “Studio Movie Grill.” 4. 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

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First Day Motion (the “Snyder Declaration”), which was filed on the Petition Date and is incorporated by reference in this Motion. 5. On February 18, 2021, Movants filed their Motion, seeking allowance and immediate payment of certain claims under the Perishable Agricultural Commodities Act, 7 U.S.C. § 499e(c) (“PACA”) and an increase to the escrow established by the existing debtor-in-possession financing order of this Court. Specifically, Movants seek to allowance and payment of PACA claims totaling $52,273.12 (the “PACA Claims”), plus attorneys’ fees estimated in the amount of $17,300.00. II. OBJECTION 6. By their Application, Movants seek payment of the PACA claims related to goods supplied to the Debtors. Debtors contend that some or all of these claims have been or will be paid in the ordinary course and do not require treatment as requested. Likewise, Debtors contend that an escrow as contemplated by the Motion is unnecessary. 7. Debtors further contend that the amounts stated by Movants are yet to be confirmed as accurate by the Debtors, to which the Debtors object on a protective basis. 8. Debtors further contend that Movants are not entitled to attorneys’ fees under PACA and the same should not be awarded by this Court. 9. “PACA does not provide for interest or attorneys’ fees. Where a federal statute neither provides for nor precludes prejudgment interest, the court may look to whether awarding such interest would further the congressional policies embodied in the act. In contrast, an award of attorneys’ fees to a prevailing party under a statute which is silent on the issue, unlike the inquiry into prejudgment interest, is not a matter of evaluating whether the award is consistent with the statute’s purposes. The general “American Rule” is that a prevailing party may not recover attorneys’ fees absent statutory authorization. DI Mare Homestead, Inc. v. Dixie Produce & Packaging, L.L.C. (In re Dixie Produce & Packaging, L.L.C.), 368 B.R. 533, 538 (Bankr. E.D. La. 2007). It is “significant that PACA does not

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provide such statutory authorization for attorneys’ fees” because “Congress certainly knew how to provide for attorneys’ fees in PACA when it intended to do so.” Id. 10. Debtors submit that Movants are not entitled to attorneys’ fee under the statutory construct of PACA and have neither pled, nor proved an entitlement to the same on any other grounds. Moreover, Movants have not followed the proper procedure for recovery of postpetition attorneys fees. 11. “Generally speaking, any claimant in a bankruptcy case seeking recovery of postpetition attorneys fees must file a traditional bankruptcy fee application.” In re Nucentrix Broadband Networks, Inc., 314 B.R. 581, 590 (Bank. N.D. Tex. 2004). This is true for debtors’ counsel, trustee’s counsel, committee counsel, and oversecured creditors’ counsel. Id. (internal citations omitted). 12. Further, even if Movants can demonstrate they are entitled to such attorneys’ fees, the same are subject to analysis of the Johnson factors for determination. See Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717–19 (5th Cir. 1974); See also In re First Colonial Corp. of America, 544 F.2d 1291, 1298–99 (5th Cir. 1977), cert. denied, 431 U.S. 904, 97 S.Ct. 1696, 52 L.Ed.2d 388 (1977) (applying the Johnson factors to the analysis of fee awards in bankruptcy cases); Nucentrix, 314 B.R. at 590. In particular, to recover attorneys’ fees from the Debtors’ bankruptcy estate, Movants must plead and establish the following factors: (1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the skill requisite to perform the legal service properly; (4) the preclusion of other employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the undesirability of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases. Johnson, 488 F.2d at 717–19. 13. Movants have offered no evidence in support of their claim for attorneys’ fees and

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therefore, this Court cannot find that these factors have been satisfied through a proper showing. Debtors assert that the amount sought is not justified and should be denied. 14. For such reasons, taken together, Debtors submit that the Motion should be denied as to the attorneys’ fees sought. III. RESERVATION OF RIGHTS 15. Debtors hereby expressly reserve the right to amend or supplement this Objection prior to any hearing pertaining to its determination for the purposes of asserting additional objections to the Application, amending this Objection, offering additional support, and as Debtors otherwise deem necessary and appropriate. WHEREFORE, the Debtors respectfully request that this Court deny the relief requested by the Application and award the Debtors such other and further relief as this Court may deem just and proper. DATED: March 19, 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

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CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing document was served on the parties listed below, on all parties consenting to electronic service of this case via the Court’s ECF system for the Northern District of Texas or via United States Mail, first class postage prepaid, on March 19, 2021 on all of the Debtors’ Complex Service List. U.S. Trustee 1100 Commerce St. Room 976 Dallas, Texas 75242 /s/ Frank J. Wright Frank J. Wright