HTML Document View

Full title: Motion to convert case from chapter 11 to 7 for Certain Debtors. Fee Amount $15 Filed by Debtor Studio Movie Grill Holdings, LLC (Attachments: # 1 Exhibit Exhibit A - Proposed Order) (Wright, Frank)

Document posted on Mar 24, 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 ManagementCERTAIN CHAPTER 11 CASES TO CHAPTER 7 CASES OHAM Holdings, LLC (“OHAM”), Movie Grill Concepts XXI, LLC (“MCG XXI”), and Movie Grill Concepts XXXVII, LLC (“MCG XXXVII”), as debtors and debtors in possession in the above-captioned chapter 11 cases (collectively, the “Debtors”), file this Emergency Motion to Implement Plan and Convert Certain Chapter 11 Cases to Chapter 7 C

Page 1

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).

Page 2

DEBTORS’ EMERGENCY MOTION TO IMPLEMENT PLAN AND CONVERT CERTAIN CHAPTER 11 CASES TO CHAPTER 7 CASES OHAM Holdings, LLC (“OHAM”), Movie Grill Concepts XXI, LLC (“MCG XXI”), and Movie Grill Concepts XXXVII, LLC (“MCG XXXVII”), as debtors and debtors in possession in the above-captioned chapter 11 cases (collectively, the “Debtors”), file this Emergency Motion to Implement Plan and Convert Certain Chapter 11 Cases to Chapter 7 Cases (the “Motion to Convert”) seeking to convert bankruptcy cases (i) Case No. 20-32634; (ii) Case No. 20-32648; and (iii) Case No. 20-32644 (the “Conversion Cases”) and would respectfully show the Court as follows: 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 for this Motion to Convert is proper in this District pursuant to 28 U.S.C. §§ 1408 and 1409. The statutory predicates for the relief requested herein is Section 1112 of Title 11 of the United States Code (the “Bankruptcy Code”) and Rules 1017, 2002, and 9013 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”). II. BACKGROUND 2. 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., (thereby initiating the jointly administered above-captioned bankruptcy case (the “Lead Case”). The Debtors continue to manage and operate their businesses as debtors-in-possession pursuant to Bankruptcy Code §§ 1107 and 1108.

Page 3

3. An official committee of unsecured creditors (the “Committee”) has been appointed in the Lead Case. Further, no trustee or examiner has been requested or appointed in the Lead Case or the Conversion Cases. 4. 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.” 5. 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. 6. On October 27, 2020, the Court entered its Order Granting Debtors’ Emergency Motion for Entry of Order Authorizing Joint Administration of Chapter 11 Cases Pursuant to Rule 1015(b) of the Federal rules of Bankruptcy Procedure [Docket No. 48]. Such order provided that the Debtors’ cases were consolidated for procedural purposes and would be jointly administered by the Court under Case No. 20-32633, the case number for Studio Movie Grill Holdings, LLC. III. RELIEF REQUESTED AND BASIS FOR RELIEF 7. The jointly administered debtors are pursuing a plan of reorganization that, by its terms, seeks to convert the Conversion Cases to Chapter 7. 8. Pursuant to the Debtors’ Third Amended Joint Plan of Reorganization for Studio Movie Grill Holdings, LLC and Jointly Administered Debtors [Dkt. No. 834] (the “Plan”):

Page 4

On the Effective Date, the Chapter 11 Cases of the Debtors identified on the Schedule of Converted Cases shall be converted to cases under chapter 7 of the Bankruptcy Code pursuant to section 1112(a) of the Bankruptcy Code without any further notice to or action, order, or approval of the Bankruptcy Court or any other Entity. The Confirmation Order shall provide that such Chapter 11 Cases shall be converted to cases under chapter 7 pursuant to section 1112(a) of the Bankruptcy Code. Plan, Article IV.C(11). 9. The Plan further provides that the Plan Supplement (as defined in the Plan) may be altered, amended, modified, or supplemented from time to time through the Effective Date (as defined in the Plan) in form and substance acceptable to the Agent, and that the Plan Supplement may be amended with the consent of the Agent (as defined in the Plan) through the Effective Date. Plan, Article I A.146. The Plan Supplement includes the Schedule of Converted Cases (as defined in the Plan). 10. The proposed Confirmation Order contains the following language with respect to the conversion of the cases identified on the Schedule of Converted Cases: Immediately following the occurrence of the Effective Date, the Chapter 11 Cases of the Debtors identified on the Schedule of Converted Cases shall be converted to cases under chapter 7 of the Bankruptcy Code pursuant to section 1112(a) of the Bankruptcy Code without any further notice to or action, order, or approval of the Bankruptcy Court or any other Entity. 11. Each of the Conversion Cases is listed on the Schedule of Converted Cases. 12. By this Motion, Debtors seek to implement the terms of the Plan by (a) converting the Converted Cases to Chapter 7 effective as of the time set forth in the Confirmation Order (as defined in the Plan), and (b) modifying the Schedule of Converted Cases with the consent of the Agent at any time prior to the Effective Date in accordance with the terms of the Plan to convert any other case to Chapter 7. 13. A debtor may convert its case from Chapter 11 to Chapter 7 as provided by 11 U.S.C. § 1112(a). “On request of a party in interest, and after notice and a hearing, the court shall convert a case under this chapter to a case under chapter 7 or dismiss a case under this chapter, whichever is in

Page 5

the best interests of creditors and the estate, for cause.” 11 U.S.C. § 1112(b)(1). Under this section, determination of “cause” for conversion “is subject to judicial discretion under the particular circumstances of each case.” Matter of Potts, 188 B.R. 575, 581 (Bankr. N.D. Ind. 1995) (internal citations omitted). 14. This is an absolute right of the debtor-in-possession to convert a Chapter 11 case to a Chapter 7 case. See Bankruptcy Code § 1112(a); Tex. Extrusion Corp. v. Lockheed (In re Tex. Extrusion Corp.), 844 F.2d 1142, 1161 (5th Cir. 1988); see also In re Schuler, 119 B.R. 191, 192 (Bankr. W.D. Mo. 1990); In re Marill Alarm Sys., Inc., 100 B.R. 606, 607 (Bankr. S.D. Fla. 1989); In re Dieckhaus Stationers of King of Prussia, Inc., 73 B.R. 969, 971 (H.R. Rep. No. 595, 95th Cong., 1st Sess. 405 (1977); S. Rep. No. 989, 95th Cong., 2d Sess. 117 (1978); 7 Collier on Bankruptcy ¶1112.02, at 1112-8 (16th ed. 2011). 15. Debtors submit that conversion and continuation of the Conversion Cases under Chapter 7 and any other cases identified on the Schedule of Converted Cases prior to the Effective Date pursuant to the Plan is in their best interest and the best interests of their creditors. There is no plan to reorganize these Debtors under the Plan and Chapter 7 provides a better alternative for the orderly liquidation of their assets. Debtors seek conversion to minimize further expenses. No value will be added to the other jointly administered debtors’ estates by retaining the Conversion Case in Chapter 11. 16. For such reasons set forth above, the Debtors request an emergency hearing on this Motion to Convert. WHEREFORE, the Debtors respectfully request that this Court enter an Order, substantially in the form of Exhibit “A” hereto (i) authorizing the Debtors to implement the terms of the Plan; (ii) approving the conversion of certain of the Debtors’ cases to Chapter 7 pursuant to

Page 6

the Confirmation Order and the Plan, and (iii) awarding the Debtors such other and further relief as this Court may deem just and proper. DATED: March 25 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 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 25, 2021 on the Notice Parties. U.S. Trustee 1100 Commerce St. Room 976 Dallas, Texas 75242 /s/ Frank J. Wright Frank J. Wright