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Full title: Motion to Allow (Motion of Partridge Equity Group to Deem Late-Filed Claim as Timely Filed) Filed by Partridge Equity Group. Objections due by 6/8/2021. (Attachments: # 1 Notice # 2 Exhibit 1 # 3 Exhibit 2 # 4 Exhibit 3) (Terranova, Marisa) (Entered: 05/25/2021)

Document posted on May 24, 2021 in the bankruptcy, 9 pages and 0 tables.

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TO DEEM LATE-FILED CLAIM AS TIMELY FILED Partridge Equity Group (the “Claimant”), by and through its undersigned counsel, pursuant to section 105(a) of the Bankruptcy Code and Bankruptcy Rules 3003(c) and 9006(b)(1), moves this Court to deem the proof of claim attached as Exhibit 1 hereto (the “Claim”) as timely-filed, and in support of its motion (the “Motion”), states the following: JURISDICTION 1. The Supreme Court and the Third Circuit Court have both held that Rule 9006 and Rule 3003(c)(3) of the Federal Rules of Bankruptcy Procedure should be read in conjunction; in other words, a court’s ability to extend time because of “excusable neglect” applies to the late filing of proofs of claim.This Court considers several factors in determining whether a debtor will be prejudiced by permitting the filing of an untimely claim: (i) whether the debtor was surprised or caught unaware by the assertion of a claim that it had not anticipated; (ii) whether the payment of the claim would force the return of amounts already paid out under the confirmed plan or effect the distribution to creditors; (iii) whether payment of the claim would jeopardize the success of the debtor’s reorganization; (iv) whether the allowance of the claim would impact the debtor actually or legally; and (v) whether allowance of the claim would open the floodgates to future claim. Oct. 4, 2004) (holding that delay of nine months after plan confirmation was not significant when debtor was still litigating disputed claims, and distributions to creditors would be based upon debtor’s progress in resolving claims);Feb. 21, 2013) (disallowing proofs of claim when movant filed its motion for late filed claims more than eighteen (18) months after debtors’ plan was confirmed and three weeks before most of debtors’ cases were closed).

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IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: Chapter 11 YOUFIT HEALTH CLUBS, LLC, et al.,1 Case No. 20-12841 (MFW) Debtors. (Jointly Administered) Hearing Date: TBD Objection Deadline: June 8, 2021 @ 4:00 p.m. (EDT) MOTION OF PARTRIDGE EQUITY GROUP TO DEEM LATE-FILED CLAIM AS TIMELY FILED Partridge Equity Group (the “Claimant”), by and through its undersigned counsel, pursuant to section 105(a) of the Bankruptcy Code and Bankruptcy Rules 3003(c) and 9006(b)(1), moves this Court to deem the proof of claim attached as Exhibit 1 hereto (the “Claim”) as timely-filed, and in support of its motion (the “Motion”), states the following: JURISDICTION 1. This Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334. This motion is a core proceeding pursuant to 28 U.S.C. §157(b)(2)(B). 2. Venue is proper in this district pursuant to 28 U.S.C. §§ 1408 and 1409. 3. The statutory basis for the relief sought in this motion is 11 U.S.C. § 502 and Federal Rules of Bankruptcy Procedure 3002, 3003 and 9006. 1 The last four digits of YouFit Health Clubs, LLC’s tax identification number are 6607. Due to the large number of debtor entities in these chapter 11 cases, for which joint administration has been requested, a complete list of the debtor entities and the last four digits of their federal tax identification numbers is not provided herein. A complete list of such information may be obtained on the website of the proposed claims and noticing agent at www.donlinrecano.com/yfhc. The mailing address for the debtor entities for purposes of these chapter 11 cases is: 1350 E. Newport Center Dr., Suite 110, Deerfield Beach, FL 33442.

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BACKGROUND 4. On November 16, 2010, the Claimant, as landlord, entered into a lease (the “Lease”) with debtor YF Pompano, Inc., as tenant. 5. On November 9, 2020 (the “Petition Date”), the Debtors filed voluntary petitions for relief under chapter 11 of the United States Bankruptcy Code, 11 U.S.C. § 101 et seq. (the “Bankruptcy Code”). 6. On December 28, 2020, this Court entered an order (the “Sale Order”) [D.I. 564] approving the sale of certain of the Debtors’ assets (the “Sale”) to YF FC Acquisition LLC (the “Purchaser”). In connection with the Sale, the Debtors assumed the Lease and assigned it to the Purchaser. 7. Prior to entry of the Sale Order, the Claimant and the Debtors negotiated the amount required to cure any defaults as of the Petition Date under the Lease (the “Cure Amount”) and reached an agreement as to such Cure Amount. The Claimant negotiated the Cure Amount in good faith and the documentation provided to the Debtors clearly stated that the Claimant was calculating the Cure Amount based on amounts due through the Petition Date. On January 21, 2021, the Debtors filed the Notice of Intent to Assume and Assign Executory Contracts and Unexpired Leases (the “Assumption Notice”) [D.I. 677], which listed the agreed Cure Amount. 8. On February 1, 2021, the Debtors filed a solicitation procedures motion [D.I. 745], which included a request to establish a deadline for initial administrative expense claims. By order entered March 4, 2021 [D.I. 801], the Court established April 12, 2021at 4:00 p.m. (ET) (the “Administrative Claims Bar Date”) as the deadline for all persons or entities to file administrative expense claims that arose or accrued between the Petition Date and March 4, 2021. The notice of the Administrative Claims Bar Date (the “Bar Date Notice”) was served by First Class Mail to the

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offices of counsel for the Claimant on March 12, 2021 [D.I. 829]. Due to the global pandemic, counsel for the Claimant were not in their physical offices to receive the Bar Date Notice. While other pleadings specifically relating to the Claimant were served on counsel for the Claimant by electronic mail ([D.I. 695], serving the Assumption Notice, for example), the Bar Date Notice was only served by First Claim Mail. 9. On March 18, 2021, the Claimant received a check for the agreed Cure Amount, but not all post-petition amounts due under the Lease had been received at that time. Therefore, on March 24, 2021, counsel for the Claimant contacted counsel for the Debtors regarding Claimant’s administrative expense claim. That email is attached hereto as Exhibit 2 (the “Email Request”). The Debtors did not respond to the Email Request until May 19, 2021. Upon learning of the Administrative Claims Bar Date on May 19, 2021, counsel for the Claimant requested an extension thereof, but the Debtors denied this request on May 21, 2021. The Debtors asserted a substantive objection to the Claim as their basis for denying the request to extend the Administrative Claims Bar Date. The Claimant disputes this substantive objection. RELIEF SOUGHT AND BASIS THEREFORE 10. The Claimant requests the Court to enter an order deeming the Claim as timely filed. 11. Rule 3003(c) of the Federal Rules of Bankruptcy Procedure sets out the requirements for filing proofs of claim in Chapter 11 Reorganization cases. Rule 3003(c)(3) provides that the “court shall fix and for cause shown may extend the time within which proofs of claim or interest may be filed.” Rule 9006 of the Federal Rules of Bankruptcy Procedures is the general rule governing computation, enlargement, and reduction of periods of time prescribed under other bankruptcy rules. Fed. R. Bankr. P. 9006. Specifically Rule 9006(b)(1) empowers a

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bankruptcy court to permit a late filing if the movant’s failure to meet a deadline “was the result of excusable neglect.” The Supreme Court and the Third Circuit Court have both held that Rule 9006 and Rule 3003(c)(3) of the Federal Rules of Bankruptcy Procedure should be read in conjunction; in other words, a court’s ability to extend time because of “excusable neglect” applies to the late filing of proofs of claim. See Pioneer Inv. Serv. v. Brunswick Assoc., 507 U.S. 380 (1993); In re Vertientes, Ltd., 845 F.2d 57 (3d Cir.1988). 12. The Supreme Court in Pioneer Invest. Servs. v. Brunswick Assoc. explained that “by empowering the courts to accept late filings ‘where the failure to act was the result of excusable neglect,’ Rule 9006(b)(1), Congress plainly contemplated that the courts would be permitted, where appropriate, to accept late filings caused by inadvertence, mistake, or carelessness, as well as by intervening circumstances beyond the party’s control.” 507 U.S. at 388 (emphasis added). 13. The Pioneer Court held that “the determination is at bottom an equitable one, taking account of all relevant circumstances surrounding the party’s omission.” Id. at 395. The Pioneer test asks courts to consider the following factors to determine whether to exempt a party’s late-filed claims: (1) the danger of prejudice to the debtor, (2) the length of the delay, (3) the delay’s potential impact on judicial proceedings, (4) the reason for the delay, including whether it was in reasonable control of the movant, and (5) whether the movant acted in good faith. Id. All of these factors, discussed in turn, weigh in favor of deeming the Claim as timely filed. A. Deeming the Claim as Timely Filed Will Not Prejudice the Debtors 14. A late-filed claim is prejudicial to the debtors where “it will ‘injure or damage the debtor.’” In re O’Brien Envtl. Energy, Inc., 188 F.3d 116, 126 (3d Cir. 1999) (quoting In re Papp Int’l, Inc., 189 B.R. 939, 945 (Bankr. D. Neb. 1995)). This Court considers several factors in determining whether a debtor will be prejudiced by permitting the filing of an untimely claim:

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(i) whether the debtor was surprised or caught unaware by the assertion of a claim that it had not anticipated; (ii) whether the payment of the claim would force the return of amounts already paid out under the confirmed plan or effect the distribution to creditors; (iii) whether payment of the claim would jeopardize the success of the debtor’s reorganization; (iv) whether the allowance of the claim would impact the debtor actually or legally; and (v) whether allowance of the claim would open the floodgates to future claim. In re New Century TRS Holdings. Inc., 465 B.R. 38, 51 (Bankr. D. Del. 2012) (citing In re Inacom Corp., No. 00-2426, 2004 WL 2283599 at *4 (D. Del. Oct. 4, 2004)). 15. First, the Debtors cannot assert that they will be surprised by the Claim. As discussed above, pursuant to the Email Request, the Claimant sought additional information from the Debtors relating to the Claim prior to the Administrative Claims Bar Date. See Exhibit 2. The Claimant did not receive a response to the Email Request until May 19, 2021. 16. Second, the claims reconciliation process has not yet commenced and no distributions have been made to any claimants. Accordingly, deeming the Claim as timely filed could not possibly force the disgorgement of claims already paid out to claimants. 17. Further, deeming the Claim timely filed does not affect the Debtors’ ability to file an objection to the Claim on substantive grounds during the claims reconciliation process. The Claimant believes that the Claim is a valid claim and that it should have the ability to assert any arguments in favor of the Claim in response to any substantive objection of the Debtors. 18. Third, deeming the Claim timely filed will not jeopardize the success of the Debtors’ reorganization. The amount of the Claim, $39,726.95, is small in relation to the aggregate amount of the Debtors’ obligations. Moreover, the Debtors are not seeking to reorganize. On March 2, 2021, the Debtors filed the Combined Disclosure Statement and Amended Chapter 11

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Plan of Liquidation of YouFit Health Clubs, LLC and its Debtor Affiliates [D.I. 788] (the “Plan”). A hearing on confirmation of the Plan is scheduled to proceed on the date hereof. 19. Next, there is no evidence that deeming the Claim as timely filed would have any legal or actual impact on the Debtors at all. The Debtors have not confirmed a plan or began any distributions to creditors. 20. Finally, there is no actual evidence that deeming the Claim as timely filed would open the floodgates. 21. Accordingly, when examining the above factors, no prejudice to the Debtors can be found to exist. B. The Minimal Delay Does Not Impact Judicial Proceedings 22. There is no discernable impact on judicial proceedings as a result of the Claimant’s delay in filing its claim. In examining the length of delay and impact on judicial proceedings, courts consider the length of the delay in absolute terms. In re Garden Ridge Corp., 348 B.R. 642, 646 (Bankr. D. Del. 2006). This Court in In re Garden Ridge Corp. held that a proof of claim filed seven days after the bar date had “minimal impact on judicial proceedings in real terms: the Committee is in the midst of bringing their claims objections (e.g., late filed, amended, and duplicate) and a distribution is not expected for some time.” Id.; see also Pioneer, 507 U.S. at 384 (allowing claim filed twenty days after bar date); Chemetron Corp. v. Jones, 72 F.3d 341, 350 (3d Cir. 1995) (finding excusable neglect two years after debtors’ plan was confirmed); In re O’Brien Envtl. Energy, Inc., 188 F.3d at 129-130 (finding two month delay was not unreasonable despite fact that filing occurred after effective date of plan); In re Inacom Corp., No. 00-2426 (PJW), 2004 WL 2283599, at *6 (D. Del. Oct. 4, 2004) (holding that delay of nine months after plan confirmation was not significant when debtor was still litigating disputed claims, and distributions

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to creditors would be based upon debtor’s progress in resolving claims); In re Crane Rental Co., 334 B.R. 73 (Bankr. D. Ma. 2005) (allowing claim filed thirty days after bar date); compare In re Smidth & Co., 413 B.R. 161, 167 (Bankr. D. Del. 2009) (disallowing proof of claim that was filed after plan was confirmed); In re Majestic Holdco, LLC, No. 09-14142 KG, 2013 WL 653091 (Bankr. D. Del. Feb. 21, 2013) (disallowing proofs of claim when movant filed its motion for late filed claims more than eighteen (18) months after debtors’ plan was confirmed and three weeks before most of debtors’ cases were closed). 23. Likewise here, the Debtors have not confirmed a plan, have not commenced the claims review or objection process and have not begun to make distributions to creditors. The duration between the Administrative Claims Bar Date and the filing of this Motion was approximately six weeks and only one business day after the Debtors denied the Claimant’s request for an extension of the deadline. Therefore, deeming the Claim as timely filed will not have an impact on the judicial proceedings. C. The Reason for the Delay Was Outside of the Claimant’s Control 24. The coronavirus pandemic has forced millions of people to work from home. Unlike other pleadings in these proceedings, the Bar Date Notice was served by First Class Mail to the offices of counsel of the Claimant. Counsel for the Claimant have been working from home since March 2020 and did not receive the Bar Date Notice. Further, not knowing of the Administrative Claims Bar Date, the Claimant contacted the Debtors prior to the Administrative Claims Bar Date with respect to the Claim and did not receive a response. The Email Request was consistent with prior communications between the Claimant and the Debtors. Specifically, it was the manner in which the parties negotiated the Cure Amount. Therefore, the Claimant had a good faith basis to believe that the Debtors would respond to the E-mail Request. Had the Debtors

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notified the Claimant of the Administrative Claims Bar Date at that time, the Claimant would have timely filed the Claim. D. The Movant Has Acted In Good Faith 25. As to the fifth and final factor, there is no basis whatsoever to suggest, yet alone conclude, that the Claimant did not file a timely claim for some improper purpose. Due to the method of service of the Bar Date Notice, the Claimant was not aware of the Administrative Claims Bar Date. Despite not being aware of the deadline, the Claimant contacted the Debtors less than a week after receiving a check for the Cure Amount to reconcile its post-petition claim. The Claimant was unable to determine the correct amount for the Claim without a response from the Debtors. The Claimant did not receive a response to the Email Request until after the Administrative Claims Bar Date. This Court has found that a claimant has acted in good faith when “[t]he record is void of anything that suggests [the claimant] did not act in good faith.” In re Garden Ridge Corp., 348 B.R. at 647; see also In re Smidth & Co., 413 B.R. 161, 168 (Bankr. D. Del. 2009) (finding that claimant who waited to “assert its rights in the final moments of this bankruptcy case does not constitute good faith”). The Claimant made a good faith effort to resolve the Claim. NOTICE 26. Notice of this Motion has been provided to: (i) the Office of the United States Trustee for the District of Delaware; (ii) the Debtors’ prepetition and postpetition lenders and administrative and collateral agents; (iii) counsel to the official committee of unsecured creditors appointed in these cases; and (iv) any party who has requested notice in these chapter 11 cases pursuant to Rule 2002 of the Federal Rules of Bankruptcy Procedure. The Claimant submits that, in light of the nature of the relief requested, no other or further notice need be given.

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CONCLUSION WHEREFORE, the Claimant respectfully requests entry of an order, substantially in the form attached hereto as Exhibit 3, deeming the Claim as timely filed and granting any and all other such relief as the Court deems appropriate. Dated: May 25, 2021 Respectfully submitted, Wilmington, Delaware RICHARDS, LAYTON & FINGER, P.A. /s/ Marisa A. Terranova Fissel John H. Knight (No. 3848) Marisa A. Terranova Fissel (No. 5396) One Rodney Square 920 North King Street Wilmington, Delaware 19801 Telephone: (302) 651-7700 Facsimile: (302) 651-7701 Email: knight@rlf.com terranovafissel@rlf.com Counsel to the Claimant

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