Studio Movie Grill Holdings, LLC – Court Approves Bid Procedures for Asset Sale with Debtors Exploring Alternatives, Schedules January 15th Sale Hearing

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December 11, 2020 – The Court hearing the Studio Movie Grill Holdings cases issued an order approving bid procedures for the sale of the Debtors’ assets (the “Sale”) [Docket No. 335].

The motion [Docket No. 133] indicates that there is no guarantee that the Debtors will choose the sale path to bring its chapter 11 cases to a conclusion. The motion states, "the Debtors have been evaluating, and continue to evaluate, all of their strategic options with the input of their key constituents, including the Prepetition Lenders and DIP Lenders. These options include, without limitation, (a) a sale of all or a portion of the Assets; or (b) a reorganization and/or recapitalization of the Debtors. By this Motion, the Debtors are taking a crucial step in developing and evaluating those alternatives — specifically, they are asking for approval of a marketing process that would enable them to solicit bids on the Assets, while also maintaining the flexibility to solicit proposals to reorganize and/or recapitalize the Debtors. The Debtors are willing to entertain all viable proposals, in consultation with the Agent and, at present, have not committed to any particular path. 

The motion further notes, “The Debtors, in consultation with their advisors, are pursuing a variety of options to successfully navigate these Chapter 11 Cases and no final decision to seek a sale of substantially all of the Assets has been made. To the extent that the Debtors receive one or more Qualified Bids and determine that a sale of the Assets is necessary, such a decision will be based upon the Debtors’ sound business judgment, analyzing factors such as whether their forecasted revenues will be sufficient to adequately fund the Debtors’ business operations and debt service obligations, their leveraged financial position, any Qualified Bids received and the valuation of the Debtors’ business and Assets.

In the event that a sale of the Assets is pursued, the Debtors submit that the proposed timeline will adequately address the Debtors’ liquidity issues by transferring ownership of the Assets to a financially stable buyer with the ability to satisfy the capital requirements of the business so that the business can continue on a going concern basis while maximizing the value of the Debtors’ estates for the benefit of all constituencies. In the absence of a sale or other transaction conducted in accordance with the Timeline, the Debtors will likely face deterioration in the value of the business and a diminished runway to continue their operations.

The Debtors submit that the Successful Bid(s) resulting from the Bid Procedures will constitute the highest and best offer for the Assets. Therefore, to the extent the Debtors pursue the Transaction and the Agent has not exercised the Plan Toggle Right, it will be because such sale will provide a greater recovery for the Debtors’ estates than would be provided by any other available alternative. As such, any sale of the Assets as provided for in the Bid Procedures is a valid and sound exercise of the Debtors’ business judgment.”

Key Dates:

  • Deadline to Designate Stalking Horse Bid: December 27, 2020
  • Bid Deadline: January 6, 2021
  • Auction: January 11, 2021
  • Objection Deadline: January 13, 2021
  • Sale Hearing: January 15, 2021


In a letter to the Studio Movie Grill employees, guests and vendor partners posted on the Debtors' website in conjunction with the chapter 11 filing, the Debtors' Chairman, Brian Schultz, advised that: “Prior to its filing, SMG reached an agreement with its secured lenders to support its restructuring through financing and an agreement regarding the terms of a plan that will provide a sustainable path forward for our dine-in theater chain.

We plan to use this filing to strengthen our business by reducing liabilities and reposition SMG to emerge a stronger organization built for the future as we recover from the unparalleled impact of COVID-19. We intend to move through the process as quickly as possible."

About the Debtors

According to the Debtors: “Conceived in 1993, Studio Movie Grill (‘SMG’) modernized the traditional movie-going experience by combining first-run movies with full-service, in-theater dining. SMG has swiftly grown to 353 screens in 10 states. SMG was named to Inc. Magazine’s List of “Fastest Growing Private Companies” three years in a row, placed 11th in Box Office Magazine’s Giants of the Industry and, in 2019, 50 films put SMG in the top 10 at the Box Office with key titles grossing as high as #5 in box office receipts. Honoring its commitment to Opening Hearts and Minds, One Story at a Time™, SMG’s legacy programs include Special Needs Screenings, Chefs for Children program and annual Opening Hearts & Minds Award, which strive to help families and acknowledge local heroes. In June 2018, SMG created a unique loyalty program, SMG AccessTM which, as loyal guests earn rewards, allows them to join SMG in offering movies and meals to underserved community members. To date, this program has earned over 40,000 movies and meals. For additional information, visit”

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