Studio Movie Grill files bankruptcy with over $100 million in debt

By Sarah Lizee

Olympia, Wash., Oct. 26 – Studio Movie Grill Holdings, LLC and its affiliates filed Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Northern District of Texas on Friday.

William Snyder, the proposed chief restructuring officer of the debtors, said in a declaration that since mid-March, Covid-19 has resulted in significant adverse business effects on the company’s theater business.

The group shuttered its entire operation for three months and later began reopening theaters at a limited capacity. Currently, 21 theaters remain open at limited capacity and 13 theaters are still closed.

Through the Chapter 11 process, Studio Movie Grill seeks to further deduce the profitability of each theater and renegotiate the lease with its landlord and the master licensing agreements with film studios.

Financing

The company filed an emergency motion Friday seeking the court’s approval to access debtor-in-possession financing and cash collateral.

Specifically, Studio Movie is seeking to obtain a priming secured super-priority delayed-draw term loan facility consisting of up to $22.8 million of new money commitments, with up to $7 million available on an interim basis.

The transaction also includes a refinancing under the company’s $122.1 million prepetition credit agreement, in an amount equal to two times the new money interim DIP loans plus $2.2 million on account of obligations under the prepetition credit agreement relating to advances made in connection with a third amendment on an interim basis, and two times the DIP loan commitments minus the interim DIP loans on a final basis.

The administrative agent is Goldman Sachs Bank USA. The lenders are Goldman Sachs and affiliates of Crestline Management, LP.

Interest will be Libor plus 800 basis points, payable monthly in cash as to new money DIP loans, and payable in-kind as to the refinancing.

There is an unused commitment fee of 1%, and a 2% exit fee on new money commitments.

The facility will terminate on the earliest of 120 days after the petition date, the date on which a sale of substantially all the debtors’ assets is approved, the effective date of any plan of reorganization, entry of an order for conversion of any of the debtors’ bankruptcy cases to Chapter 7, entry of an order for the dismissal of any of the debtors’ bankruptcy cases, 30 days after the petition date if a final order has not been entered by then, appointment of a Chapter 11 trustee, or the occurrence of a post-petition default.

Proceeds will be used for working capital and other general corporate purposes.

Debt details

The company listed $50 million to $100 million in assets and $100 million to $500 million in liabilities.

The largest unsecured creditors are Construct & Maintain Corp. based in Laguna Hills, Calif., with a $3.8 million development service provider or construction contractor claim, EMJ Corp. based in Chattanooga, Tenn., with a $2.67 million development service provider or construction contractor claim, Spirit Master Funding X, LLC based in Dallas, with a $2.24 million leased property landlord claim, Segars Group LLC based in Alpharetta, Ga., with a $1.91 million development service provider or construction contractor claim, and Vista Entertainment Solutions Ltd. based in Beverly Hills, Calif., with a $1.35 million service provider or contractor claim.

Studio Movie Grill is a Dallas-based dine-in movie theater chain. The Chapter 11 case number is 20-32633.

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