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UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF DIVISION www.flsb.uscourts.gov

In re:

CINEMEX USA REAL ESTATE Chapter 11 HOLDINGS, INC., CINEMEX HOLDINGS USA, INC., and CB Case No. 20-14695-LMI THEATER EXPERIENCE LLC,1 (Jointly Administered) Debtors. /

DEBTORS’ RESPONSE IN OPPOSITION TO MOTION FOR RELIEF FROM STAY FILED BY SHERMAN WILLIAMS [ECF NO. 129] Cinemex USA Real Estate Holdings, Inc. (“Cinemex Real Estate”), Cinemex Holdings

USA, Inc. (“Cinemex Holdings”), and CB Theater Experience LLC (“CB Theater” and, with

Cinemex Real Estate and Cinemex Holdings, the “Debtors” or “Cinemex”) by and through their

undersigned counsel, file this Response in Opposition to Motion for Relief from Stay Filed by

Sherman Williams [ECF No. 129] and the Supplement thereto [ECF No. 137] (together, the

“Motion”), and in support thereof, states as follows:

Preliminary Statement

The Motion seeks relief that is both premature and unjustified. Mr. Williams seeks stay

relief to “finish my upcoming mediation meeting with Cinemex” [ECF Nos. 129, 137], but no

mediation has been scheduled. The Florida Commission on Human Relations (“FCHR”) has only “invite[d]” the parties to participate in a mediation and to complete forms if desired to start

1 The Debtors in these cases and the last four digits of each Debtor’s federal tax identification number are as follows: (1) Cinemex USA Real Estate Holdings, Inc. (2194); (2) Cinemex Holdings USA, Inc. (5502); and (3) CB Theater Experience LLC (0563). The address for the Debtors is 175 South West 7th Street, Suite 1108, Miami, Florida 33131.

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the mediation process. [ECF No. 137 at page 3 of 3]. The Debtors have not agreed to mediation, and—in the interest of focusing on the restructuring tasks at hand—do not intend to agree to mediation.

This bankruptcy case is still in its very early stages, and lifting the automatic stay now would frustrate the core purpose of the automatic stay by distracting the Debtors’ very limited remaining managerial staff and diverting critical resources away from this proceeding, all at a time when the Debtors and their few personnel need to be singularly focused on restructuring and reopening their businesses. On about May 11, 2020, Mr. Williams filed a proof of claim against the Debtors, a copy of which is attached hereto as Exhibit A [Claim No. 6-1] (the “Proof of Claim”). The Debtors suggest that the claims allowance process provides the more appropriate vehicle to address the issues raised in the Motion.

Accordingly, in the interest of the Debtors and all of the creditors of their estates, the

Court should deny the Motion.

BACKGROUND

A. Bankruptcy Case Generally

1. On April 25, 2020 (the “Petition Date”), the Debtors commenced the instant cases upon the filing of voluntary petitions under the Bankruptcy Code in the United States

Bankruptcy Court for the Southern District of Florida.2

2. The Debtors are operating their business and managing their assets as debtors in possession pursuant to 11 U.S.C. §§ 1107 and 1108. As of the date hereof, no trustee or examiner has been requested in these chapter 11 cases. For a detailed description of the Debtors and their operations, the Debtors respectfully refer the Court and parties in interest to the

2 CB Theater filed its petition on April 26, 2020.

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Declaration of Jose Leonardo Marti in Support of Chapter 11 Petition and First Day Motions

[ECF No. 47] (the “First Day Declaration”).

3. The Debtors are in the movie theater business. First Day Declaration ¶ 9. They operated 41 movie theaters in dozens of cities in 12 states, including Florida, Alabama,

Colorado, Georgia, Illinois, Maryland, Minnesota, New Jersey, , , Ohio, and Virginia. Id. The theaters operate under the brand name “CMX Cinemas.” Id. The Debtors’ attention is now focused on rejecting unprofitable locations, renegotiated leases on their remaining locations to address the cataclysmic effect of the COVID-19 pandemic on their ability to operate profitably, and negotiating with their creditors to achieve a consensual reorganization.

B. Williams’ Claims Generally

4. The Motion itself does not provide much information about Mr. Williams’ claims,

but it attaches a Public Accommodation Complaint of Discrimination filed with the FCHR (the

“Complaint”). [ECF No. 37 at page 2 of 3].

5. According to the Complaint, Mr. Williams alleged that he was discriminated

against on account of his race and gender. He alleged that he was in a theater at the Brickell City

Center location in Miami, Florida when an employee asked to see his ticket and he could not

locate it. He alleged that he left the theater and showed security staff a video of his ticket. He

alleged that he was not allowed back into the theater to finish watching the movie, and that he

called the theater later to get information and the manager “referred to [him] as that ‘Black Guy’

that was here earlier when he was speaking to the other staff about me.” Id.

6. The Motion also attaches a Notice of Receipt of Complaint from the FCHR dated

April 21, 2020 (the “Notice”). [ECF No. 37 at page 3 of 3]. According to the Notice, the FCHR

received the Complaint and “will make every attempt to investigate your claim within 180 days.”

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The Notice “invites [Mr. Williams] to participate in a Mediation Conference in an effort to expeditiously and amicably resolve this dispute.” The Notice further states “If you wish to participate in FCHR’s mediation process, please complete, sign, date and return all of the enclosed forms to [FCHR] within twenty-five (25) days of the date of this letter.” The Motion

does not say whether Mr. Williams submitted the enclosed forms before the Petition Date to seek

mediation. The Debtors have not sought mediation with the FCHR.

9. The Proof of Claim asserts damages of $1,000,000.00 and alleges a set of facts

similar to those found in the Complaint.

Memorandum of Law

A. Purpose of the Automatic Stay

The primary purpose of bankruptcy law is to provide an honest debtor with a fresh start

by relieving the burden of indebtedness. In re Vega, 503 B.R. 144 (Bankr. M.D. Fla. 2013)

judgment entered, 6:10-BK-06873-KSJ, 2013 WL 6180988 (Bankr. M.D. Fla. 2013). As such,

Congress enacted § 362(a) and its subsections “to give debtors ‘breathing room’ after filing their petition.” See In re Feingold, 730 F.3d 1268, 1276 (11th Cir. 2013) cert. denied, 134 S. Ct. 1880

(U.S. 2014) (citing In re Patterson, 967 F.2d 505, 512 n. 9 (11th Cir.1992)). The automatic stay

is “one of the fundamental debtor protections provided by the bankruptcy laws,” that “permits

the debtor to attempt a repayment or reorganization plan, or simply to be relieved of the financial

pressures that drove him into bankruptcy.” Id.

B. Standard for Relief from Stay

Relief from the automatic stay may be granted under appropriate circumstances, for

cause. See 11 U.S.C. § 362(d)(1). “Courts conduct a case-by-case inquiry and apply a totality of the circumstances test to determine whether cause for relief from the stay exists.” In re Laminate

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Kingdom, LLC, 2008 WL 1766637 at *3 (Bankr. S.D. Fla. 2008). The decision to lift the stay is within the discretion of the Court. In re Dixie Broad., Inc., 871 F.2d 1023, 1026 (11th Cir. 1989).

Regardless, initially, the moving party must first establish a prima facie showing that “cause” exists to lift the stay. See In re Paxson Elec. Co, 242 B.R. 67 (Bankr. M.D. Fla. 1999) (citing In re Cummings, 221 B.R. 814, 819 (Bankr. N.D. Ala. 1998)); In re Jim's Maint. & Sons Inc., 418

Fed. Appx. 726, 728 (10th Cir. 2011).

There is no set list of circumstances that a bankruptcy court is required to consider in evaluating whether § 362(d)(1) “cause” exists to lift the automatic stay. In re Feingold, 730 F.3d

1268, 1277 (11th Cir. 2013) cert. denied, 134 S. Ct. 1880 (U.S. 2014). Rather, courts evaluating whether to grant stay relief have looked to a variety of case-specific factors, including (1) whether the debtor has acted in bad faith; (2) the “hardships imposed on the parties with an eye towards the overall goals of the Bankruptcy Code”; and (3) pending state court proceedings. Id.

(internal citations omitted). See also In re Brown, 311 B.R. 409, 412–13 (E.D. Pa. 2004) (“A court may consider the policies reflected in the bankruptcy code, and the interests of the debtor, other creditors and any other interested parties. Unsecured creditors are generally entitled to relief from an automatic stay only in extraordinary circumstances.”).

C. Mr. Williams Cannot Meet His Burden

In the instant case, Mr. Williams has failed to establish that “cause” exists to lift the stay. In making such a determination, the Court should consider factors such as:

(1) trial readiness of proceeding in non-bankruptcy forum; (2) judicial economy; (3) necessity of resolving preliminary bankruptcy issues; (4) costs of defense or other potential burden to debtor or estate; (5) creditor's chances of success on the merits; (6) specialized expertise of non-bankruptcy forum; (7) whether damages or claim that could result from non-bankruptcy proceeding might be subject to equitable subordination;

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(8) extent to which trial of case in non-bankruptcy forum would interfere with progress of bankruptcy case; (9) anticipated impact on movant, or other non-debtors, if stay was not lifted; and, (10) presence of third parties over which bankruptcy court lacked jurisdiction.

Cummings, 221 B.R. at 818.

The facts here weigh heavily against granting the relief from the stay requested by Mr.

Williams. Mr. Williams filed his Proof of Claim and would suffer no prejudice if required to proceed before this Court. The FCHR mediation has not been and will not be scheduled.

Assuming Mr. Williams wishes to proceed against the Debtors in another forum, no alternative proceeding has been initiated, and Mr. Williams has provided no evidence that some other court would be in a better posture to try his claims more expeditiously or expediently than this Court.

In fact, by Florida statute, Mr. Williams cannot pursue his claims in any alternative forum because the FCHR has not issued any findings and the required 180-day FCHR investigatory period starting from the date of filing the Complaint has not yet expired. See Fla. Stat. § 760.11.

Further, while Mr. Williams has not addressed the issue of whether judicial economy weighs in

favor of lifting the stay, the fact is that the liquidation of his Proof of Claim is already before this

Court. Accordingly, his claim can be handled in the regular claims adjudication process and, if

allowed, paid via a Chapter 11 plan or from insurance proceeds.

Additionally, this Court should place particular emphasis on the cost of defense of Mr.

Williams’ claims in another forum or other potential burden to the Debtors. In this case, lifting the stay and allowing Mr. Williams to proceed elsewhere would force the Debtors to obtain additional counsel and expend scarce personnel resources on defending that litigation at a critical time in the Debtors’ bankruptcy cases. Mr. Williams’ Proof of Claim underscores that he is attempting to obtain a substantial payout of $1 million, rather than only a mediation to redress his concerns. The Debtors are currently deeply focused on determining how to reopen their

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theaters across dozens of locales during the COVID-19 pandemic, negotiating with their landlords with the aim of restructuring the lease obligations, and crafting a feasible plan to ensure that they can emerge from bankruptcy. Forcing the Debtors to defend claims in another forum would distract them from these pressing needs to the detriment of all of the creditors.

WHEREFORE, the Debtors respectfully request that this Court: (i) deny the Motion for

Relief from Stay in all respects; and (ii) grant all other relief as necessary and equitable.

Dated: June 22, 2020

BAST AMRON LLP One Southeast Third Avenue, Suite 1400 Sun Trust International Center Miami, Florida 33131 Telephone: 305-379-7904 Facsimile: 305-379-7905 Email: [email protected] Email: [email protected] Email: [email protected]

By: /s/ Jaime B. Leggett Jeffrey P. Bast (FBN 996343) Brett M. Amron (FBN 148342) Jaime B. Leggett (FBN 1016485)

-and-

QUINN EMANUEL URQUHART & SULLIVAN, LLP Eric Winston (admitted pro hac vice) 865 S. Figueroa Street, 10th Floor Los Angeles, 90017 Telephone: 213-443-3000 Facsimile: 213-443-3100 Email: [email protected]

-and-

Juan P. Morillo (FBN 135933) 1300 I Street, NW, Suite 900 , D.C. 20005

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Telephone: 202-538-8000 Facsimile: 202-538-8100 Email: [email protected]

-and-

Patricia B. Tomasco (admitted pro hac vice) 711 Louisiana Street, Suite 500 Houston, Texas 77002 Telephone: 713-221-7000 Facsimile: 713-221-7100 Email: [email protected]

COUNSEL FOR CINEMEX USA REAL ESTATE HOLDINGS, INC., CINEMEX HOLDINGS USA, INC., and CB THEATER EXPERIENCE LLC

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EXHIBIT A

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CaseCase 20-14695-LMI 20-14695-LMI Doc Claim 307 6-1 Filed Filed 06/22/20 05/11/20 Page Page 10 1 of of 22 3

Fill in this information to identify the case: FILED Debtor 1 Cinemex USA Real Estate Holdings Inc U.S. Bankruptcy Court Debtor 2 Southern District of Florida (Spouse, if filing) 5/11/2020

United States Bankruptcy Court Southern District of Florida Joseph Falzone, Clerk Case number: 20−14695

Official Form 410 Proof of Claim 04/19

Read the instructions before filling out this form. This form is for making a claim for payment in a bankruptcy case. Do not use this form to make a request for payment of an administrative expense. Make such a request according to 11 U.S.C. § 503.

Filers must leave out or redact information that is entitled to privacy on this form or on any attached documents. Attach redacted copies of any documents that support the claim, such as promissory notes, purchase orders, invoices, itemized statements of running accounts, contracts, judgments, mortgages, and security agreements. Do not send original documents; they may be destroyed after scanning. If the documents are not available, explain in an attachment.

A person who files a fraudulent claim could be fined up to $500,000, imprisoned for up to 5 years, or both. 18 U.S.C. §§ 152, 157, and 3571.

Fill in all the information about the claim as of the date the case was filed. That date is on the notice of bankruptcy (Form 309) that you received.

Part 1: Identify the Claim

1.Who is the current Sherman Teddy Williams creditor? Name of the current creditor (the person or entity to be paid for this claim)

Other names the creditor used with the debtor

2.Has this claim been No acquired from Yes. From whom? someone else? 3.Where should notices Where should notices to the creditor be sent? Where should payments to the creditor be sent? (if and payments to the different) creditor be sent? Sherman Teddy Williams Federal Rule of Name Name Bankruptcy Procedure (FRBP) 2002(g) 500 NW 2nd Ave Miami, FL 33101

Contact phone 3059240899 Contact phone

Contact email [email protected] Contact email

Uniform claim identifier for electronic payments in chapter 13 (if you use one):

4.Does this claim amend No one already filed? Yes. Claim number on court claims registry (if known) Filed on

MM / DD / YYYY 5.Do you know if anyone No else has filed a proof Yes. Who made the earlier filing? of claim for this claim? Official Form 410 Proof of Claim page 1 CaseCase 20-14695-LMI 20-14695-LMI Doc Claim 307 6-1 Filed Filed 06/22/20 05/11/20 Page Page 11 2 of of 22 3 Part 2: Give Information About the Claim as of the Date the Case Was Filed 6.Do you have any No number you use to Yes. Last 4 digits of the debtor's account or any number you use to identify the debtor: identify the debtor?

7.How much is the $ 1000000.00 Does this amount include interest or other charges? claim? No Yes. Attach statement itemizing interest, fees, expenses, or other charges required by Bankruptcy Rule 3001(c)(2)(A).

8.What is the basis of Examples: Goods sold, money loaned, lease, services performed, personal injury or wrongful the claim? death, or credit card. Attach redacted copies of any documents supporting the claim required by Bankruptcy Rule 3001(c). Limit disclosing information that is entitled to privacy, such as healthcare information. Violation of The Florida Civil Rights Act of 1992 as amended (Chapter 760 Florida Statutes) − FCHR No. 202024010

9. Is all or part of the No claim secured? Yes. The claim is secured by a lien on property. Nature of property: Real estate. If the claim is secured by the debtor's principal residence, file a Mortgage Proof of Claim Attachment (Official Form 410−A) with this Proof of Claim. Motor vehicle Other. Describe:

Basis for perfection:

Attach redacted copies of documents, if any, that show evidence of perfection of a security interest (for example, a mortgage, lien, certificate of title, financing statement, or other document that shows the lien has been filed or recorded.)

Value of property: $

Amount of the claim that is $ secured: Amount of the claim that is $ (The sum of the secured and unsecured: unsecured amounts should match the amount in line 7.)

Amount necessary to cure any default as of the $ date of the petition:

Annual Interest Rate (when case was filed) %

Fixed Variable 10.Is this claim based on No a lease? Yes. Amount necessary to cure any default as of the date of the petition.$

11.Is this claim subject to No a right of setoff? Yes. Identify the property:

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12.Is all or part of the claim No entitled to priority under Amount entitled to priority 11 U.S.C. § 507(a)? Yes. Check all that apply: A claim may be partly Domestic support obligations (including alimony and child support) $ priority and partly under 11 U.S.C. § 507(a)(1)(A) or (a)(1)(B). nonpriority. For example, in some categories, the Up to $3,025* of deposits toward purchase, lease, or rental of $ law limits the amount property or services for personal, family, or household use. 11 entitled to priority. U.S.C. § 507(a)(7). Wages, salaries, or commissions (up to $13,650*) earned within $ 180 days before the bankruptcy petition is filed or the debtor's business ends, whichever is earlier. 11 U.S.C. § 507(a)(4). Taxes or penalties owed to governmental units. 11 U.S.C. § $ 507(a)(8). Contributions to an employee benefit plan. 11 U.S.C. § 507(a)(5). $

Other. Specify subsection of 11 U.S.C. § 507(a)( ) that applies $

* Amounts are subject to adjustment on 4/1/22 and every 3 years after that for cases begun on or after the date of adjustment.

Part 3: Sign Below

The person completing Check the appropriate box: this proof of claim must sign and date it. FRBP I am the creditor. 9011(b). I am the creditor's attorney or authorized agent. If you file this claim electronically, FRBP I am the trustee, or the debtor, or their authorized agent. Bankruptcy Rule 3004. 5005(a)(2) authorizes courts to establish local rules I am a guarantor, surety, endorser, or other codebtor. Bankruptcy Rule 3005. specifying what a signature I understand that an authorized signature on this Proof of Claim serves as an acknowledgment that when calculating is. the amount of the claim, the creditor gave the debtor credit for any payments received toward the debt. A person who files a I have examined the information in this Proof of Claim and have a reasonable belief that the information is true fraudulent claim could be and correct. fined up to $500,000, imprisoned for up to 5 I declare under penalty of perjury that the foregoing is true and correct. years, or both. 18 U.S.C. §§ 152, 157 and 3571. Executed on date 5/11/2020

MM / DD / YYYY

/s/ Sherman Teddy Williams

Signature Print the name of the person who is completing and signing this claim: Name Sherman Teddy Williams

First name Middle name Last name Title

Company

Identify the corporate servicer as the company if the authorized agent is a servicer Address 500 NW 2nd Ave

Number Street Miami, FL 33101

City State ZIP Code Contact phone 3059240899 Email [email protected]

Official Form 410 Proof of Claim page 3

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