00620302 DOCX 5

UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF FLORIDA

MIAMI DIVISION

www.flsb.uscourts.gov

In re:

CINEMEX USA REAL ESTATE Chapter 11

HOLDINGS, INC., CINEMEX

HOLDINGS USA, INC., and CB 

THEATER EXPERIENCE LLC,1

Case No. 20-14695-LMI

Debtors. (Jointly Administered)

 /

CINEMEX USA REAL ESTATE

HOLDINGS, INC., CINEMEX 

HOLDINGS USA, INC., and CB

THEATER EXPERIENCE LLC,

Plaintiffs,

vs. Adv. No:

MN THEATERS 2006 LLC,

Defendant.

 /

COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF

Cinemex USA Real Estate Holdings, Inc. (“Cinemex USA”), Cinemex Holdings USA, Inc.

(“Cinemex Holdings”), and CB Theater Experience LLC (“CB Theater,” and collectively, the 

Debtors” or “Cinemex”), all of which are Debtors in the above-captioned jointly administered 

chapter 11 cases (the “Chapter 11 Cases”), file this Complaint for Declaratory and Injunctive 

 

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 33130.

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Relief (the “Complaint”) and allege upon knowledge with respect to their own acts and upon 

information and belief as to all other matters, as follows:

I. NATURE OF THE ACTION

1. The Debtors filed petitions for protection under Chapter 11 of the Bankruptcy Code 

on April 25, 2020, and April 26, 2020 (the “Petition Dates”). Under section 362 of the Bankruptcy 

Code, the Debtors’ filing triggered the automatic stay against all litigation pending against the 

Debtors and any and all actions seeking to obtain possession of, or exercise control over, property 

of their estates.

2. On or about July 28, 2020, MN Theaters 2006 LLC (MN Theaters”) filed a lawsuit 

against Grupo Cinemex, S.A. de C.V. (“Grupo Cinemex”) in the United States District Court for 

the Southern District of New York, Civil Action No. 20-cv-5860 (the “District Court Case”). 

3. Grupo Cinemex is the parent company of the Debtors and provides the Debtors 

with post-petition financing in the Chapter 11 Cases. Grupo Cinemex is not a debtor in any 

bankruptcy case. 

4. This adversary proceeding is filed as a direct result of the District Court Case, in 

which MN Theaters alleges breach of contract and seeks over $58 million in damages and a 

declaratory judgment against Grupo Cinemex as guarantor of Debtor CB Theater under two leases 

entered into with MN Theaters (the “Leases”). Notably, this Court previously entered a final order 

authorizing the Debtors’ rejection of the Leases. See ECF Nos. 72 and 270. 

5. Concurrently with its complaint, MN Theaters also filed under seal an ex parte 

motion for pre-judgment attachment of Grupo Cinemex’s property. On July 30, 2020, the District 

Court entered an Order of Attachment that provides for the levy of Grupo Cinemex’s property, 

including its ownership in the Debtor Cinemex Holdings and its interest in the post-petition 

financing to the Debtors. By obtaining control over the ownership of one of the Debtors and the 

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post-petition financing for all of the Debtors, MN Theaters would effectively obtain control over 

the Debtors and this reorganization. 

6. The District Court Case is an obvious effort to end-run around the automatic stay 

as well as the orders of this Court. Moreover, the continued prosecution of the District Court Case 

would thwart the Debtors’ efforts to reorganize as it will stifle Grupo Cinemex’s ability to continue 

to provide essential financing that the Debtors need to successfully emerge from bankruptcy. 

7. The Debtors therefore respectfully request that the Court (a) declare that the 

automatic stay applies to the entire District Court Case, including the claims against the non-debtor 

defendant, Grupo Cinemex, or, in the alternative, (b) extend the automatic stay or enjoin MN 

Theaters from continuing the District Court Case for a limited time period pursuant to section 

105(a) of the Bankruptcy Code. 

II. JURISDICTION AND VENUE

8. This Court has jurisdiction over this proceeding pursuant to 28 U.S.C. § 1334. This 

is a core proceeding under 28 U.S.C. § 157(b). 

9. The Debtors confirm their consent, pursuant to rule 7008 of the Federal Rules of 

Bankruptcy Procedure (the “Bankruptcy Rules”), to the entry of a final order by the Court in 

connection with this proceeding to the extent that it is later determined that the Court, absent 

consent of the parties, cannot enter final orders or judgments in connection herewith consistent 

with Article III of the United States Constitution.

10. Venue for this proceeding is proper pursuant to 28 U.S.C. §§ 1408 and 1409. 

11. The bases for the relief requested herein are sections 105 and 362 of the Bankruptcy 

Code; 28 U.S.C. § 2201; Bankruptcy Rules 7001(7), 7001(9), and 7065; and Local Rule 9013-1. 

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III. NATURE OF RELIEF REQUESTED

12. The Debtors seek entry of a declaratory judgment pursuant to section 362 of the 

Bankruptcy Code and Bankruptcy Rules 7001(7) and 7001(9) that the automatic stay applies to 

the claims against the Debtors and non-debtor defendant Grupo Cinemex in the District Court 

Case. Alternatively, they seek entry of an order pursuant to section 105 of the Bankruptcy Code 

and Bankruptcy Rules 7001(7) and 7001(9) extending the automatic stay to Grupo Cinemex until 

60 days after the effective date of the Debtors’ chapter 11 plan, or a preliminary injunction pausing 

the prosecution of the entirety of the District Court Case until the earlier of (a) 60 days after the 

effective date of the Debtors’ chapter 11 plan, or (b) 6 months after the entry of the proposed order, 

without prejudice to extending such time period. 

IV. THE PARTIES

13. Cinemex USA is a Delaware corporation incorporated in 2014. It is based in 

Miami, Florida and is a privately held corporation. 

14. Cinemex Holdings is a Delaware corporation incorporated in 2014. It is based in 

Miami, Florida and is a privately held corporation. 

15. CB Theater is a Delaware corporation incorporated in 2017. It is based in Miami, 

Florida and is a privately held corporation. 

16. MN Theaters is a limited liability company organized and existing under the laws 

of Minnesota. It is wholly owned by iStar Inc., a corporation organized and existing under the 

laws of Maryland with its principal place of business in New York. MN Theaters may be served 

through its attorneys, Scott A. Edelman, Jed M. Schwartz, and Joseph J. Kammerman, Milbank 

LLP, 55 Hudson Yards, New York, New York 10001. 

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V. FACTUAL BACKGROUND

The Chapter 11 Filing

17. On April 25, 2020, Cinemex USA and Cinemex Holdings filed for bankruptcy 

under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in this Court. On

April 26, 2020, CB Theater also filed for bankruptcy under chapter 11 in this Court. The Debtors 

are authorized to continue to operate their businesses and manage their properties as debtors-inpossession. No examiner or trustee has been appointed in the Chapter 11 Cases. 

18. Cinemex is in the movie theater business and is based in Miami, Florida. At the 

time of the bankruptcy filing, Cinemex operated 41 movie theaters in dozens of cities in 12 states, 

including Florida.2

 The theaters operate under the brand name “CMX Cinemas.”

19. Since mid-March 2020, the unprecedented worldwide pandemic resulting from the 

spread of the 2019 coronavirus has substantially and adversely affected Cinemex and its operations 

along with the rest of the movie theater industry, as well as traditional “brick and mortar” retail 

operations. 

20. Cinemex’s entire operations have grounded to a halt. At present, and for the 

immediate foreseeable future, all of the theaters are shut down, employees have been laid off, and 

Cinemex has not received any revenues from movie sales since on or around March 20, 2020. 

Because the duration of the coronavirus pandemic is presently unknown, Cinemex, as all other 

movie theater operators, expects demand to remain weak to non-existent for the near future, to the 

extent that Cinemex’s theaters are permitted to operate. Even if Cinemex is able to reopen some 

 

2 Since the beginning of the bankruptcy cases, Cinemex has filed six motions to reject leases and numerous leases 

have been rejected by order of this Court.

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of its theaters in the late summer/early fall, it is uncertain as to whether customers will start going 

out to see movies in the theater given the continued risk of becoming infected with COVID-19. 

21. Cinemex has been, and is making, immediate and significant changes to its 

operations to adjust to the precipitous decline in revenue. Cinemex has reduced its operating 

expenses and improved its cash flow. As part of these measures, Cinemex filed these Chapter 11 

Cases to preserve its assets for its creditors. 

22. Additionally, Cinemex has filed a number of motions seeking authorization to 

reject certain leases associated with theaters in locations that were not performing up to 

expectations even prior to the coronavirus pandemic. Such leases, including the two Leases at 

issue in the District Court Case, were an economic burden that would impede a successful 

reorganization. On May 8, 2020, this Court granted Cinemex’s motion to reject the Leases on an 

interim basis. See ECF No. 72. On June 8, 2020, this Court granted the motion on a final basis. 

See ECF No. 270. 

23. On July 2, 2020, MN Theaters filed a proof of claim (Claim No. 28-1) in the Case 

No. 20-14699-LMI, claiming rejection damages against CB Theater claiming (i) $4,611,523.65 

for the Burnsville Lease and (ii) $2,680,075.99 for the Chateau Lease for a total claim of 

$7,291,599.65. As such MN Theaters has submitted to the jurisdiction of this Court. 

The DIP Loan 

24. On May 5, 2020, the Debtors filed an Emergency Motion (I) for Authorization to 

Obtain Post-Petition Unsecured Financing Pursuant to 11 U.S.C. §§ 105, 361, 362 and 364; and 

(II) Scheduling a Final Hearing Under Bankruptcy Rule 4001 (the “DIP Motion”), in which they 

sought entry of an interim and final order authorizing post-petition financing from Grupo Cinemex 

of one or more interim initial advances of $1,920,000 to cover (a) payment of insurance, utilities 

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and taxes to local and state taxing authorities; (b) payment of post-petition corporate payroll and 

expenses; (c) expenses related to rejection of leases; and (d) payment of certain of the costs of 

administration of the Debtors’ chapter 11 cases, as set forth in the Debtors’ budget. See ECF No. 

58. 

25. This Court entered an Interim Order granting the DIP Motion on May 18, 2020,and 

a Final Order on June 5, 2020. See ECF Nos. 114, 249. 

26. On June 1, 2020, the Debtors filed a Second Emergency Motion (I) for 

Authorization to Obtain Post-Petition Unsecured Financing Pursuant to 11 U.S.C. §§ 105, 361, 

362 and 364; and (II) Scheduling a Final Hearing Under Bankruptcy Rule 4001 (the “Second DIP 

Motion”), in which they sought entry of an interim and final order authorizing additional postpetition financing from Grupo Cinemex of up to $9.7 million to cover (a) payment of insurance, 

utilities and taxes to local and state taxing authorities; (b) payment of post-petition corporate 

payroll and expenses; (c) expenses related to rejection of leases; and (d) payment of certain of the 

costs of administration of the Debtors’ chapter 11 cases, as set forth in the Debtors’ budget. See 

ECF No. 221. In the Second DIP Motion, the Debtors additionally stated that Grupo Cinemex has 

advised them that it will provide financing in the amount of $20 to $30 million if the Debtors 

propose a viable business plan incorporating binding term sheets to modify their lease obligations 

that are acceptable to Grupo Cinemex. Id. ¶ 13. 

27. On July 7, 2020, the Court granted the Second DIP Motion. See ECF No. 363. The 

Order included a requirement that the Debtors draw down $6,900,154 from the DIP loan, which 

amount is allocated in the Budget to pay the Debtors’ deferred May and June rent, and hold those 

funds in escrow until either the Court enters a final order authorizing the Debtors to assume or 

reject an applicable lease, or a landlord under an applicable lease consents to the Debtors’ 

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expenditure of the applicable portion of the earmarked money. Id. ¶ 12. Based on the amended 

lease terms negotiated so far, the Debtors were well on their way to reopening around Labor Day 

Weekend and were in the midst of drafting their plan of reorganization as of July 18, 2020, as 

stated on the record at the July 30, 2020 hearing on various motions. See, 7/30/2020 Hr’g Tr. pp. 

15-17. 

The District Court Case

28. On or about July 28, 2020, MN Theaters filed a complaint against Grupo Cinemex 

in the United States District Court for the Southern District of New York (the “District Court”), 

Case No. 20 CV 5860, for breach of contract and declaratory judgment (the “Complaint”). 

29. The District Court Case concerns two Leases between MN Theaters, as landlord, 

and Cinemex Stratford, LLC (“Cinemex Stratford”), a wholly-owned subsidiary of Debtor 

Cinemex Holdings, as tenant.

30. Grupo Cinemex provided MN Theaters with guaranties of Cinemex Stratford’s 

obligations under the Leases (the “Guarantees”). The Leases were subsequently assigned to 

Debtor CB Theater, while the Guarantees remained intact. 

31. The Complaint alleges that in April 2020, CB Theater defaulted on the Leases for 

failure to pay, and that as a result of such failure to pay, together with the Debtors’ rejection of the 

Leases, which it also alleges is a default, MN Theaters has been damaged in the amount of 

$58,318,225.94. 

32. Concurrently with the filing of the Complaint, MN Theaters also filed under seal 

an ex parte motion for attachment and for discovery, which the District Court granted on July 30, 

2020 (the “Attachment Order”).3

 The Attachment Order provides for the levy upon Grupo 

 

3

 Because the Motion was filed under seal, the Debtors have not been able to review it. 

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Cinemex’s property, including its ownership interest in Debtor Cinemex Holdings, its property 

rights in the DIP Loan totaling $11.6 million, and its property rights in any additional debtor-in 

possession loans that have been made or any loan made in the future. 

33. The District Court Case violates the automatic stay because it limits the Debtors’ 

access to post-petition financing, which is property of the Debtors’ estate. In addition, it is an 

attempt by MN Theaters to circumvent this Court’s order authorizing rejection of the Leases, the 

damages from which, instead of being recovered through litigation, should be paid through a 

creditor-approved plan of reorganization. Moreover, MN Theaters’ attempt to take control of the 

Debtors’ post-petition financing is a knowing and willful effort to restrict the Debtors’ access to 

necessary funding and place this entire reorganization effort in jeopardy. As such, the District 

Court Case is actually a lawsuit targeting the Debtors and this estate; the lawsuit violates the 

automatic stay.

34. Even if the lawsuit does not violate the automatic stay, it will severely restrict the 

Debtors’ ability to reorganize through the Chapter 11 proceeding, because the restraints on Grupo 

Cinemex will limit or eliminate the Debtors’ access to the financing necessary to resume 

operations and emerge from Chapter 11. Without this financing, the Debtors will be left without 

the funding necessary to pay insurance, utilities, and taxes, corporate payroll and expenses, 

expenses associated with the assumption of leases and resumption of operations, and 

administration costs; furthermore, they will be left without a potential investor that may ultimately 

finance their emergence out of bankruptcy. As a result, all creditors of the Debtors’ estates will 

be harmed.

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VI. FIRST CLAIM FOR RELIEF

(Section 362 – Declaratory Judgment)

35. The Debtors repeat and re-allege Paragraphs 1 – 34 of this Complaint as if fully set 

forth herein. 

36. This is an action for declaratory relief brought pursuant to pursuant to the Federal 

Declaratory Judgment Act, 28 U.S.C. § 2201, section 362 of the Bankruptcy Code, rules 7001(7) 

and 7001(9) of the Federal Rules of Bankruptcy Procedure, and rule 57 of the Federal Rules of 

Civil Procedure. The Debtors seek an order that declares that the automatic stay applies to all 

claims against Grupo Cinemex in the District Court Case pending in the United States District 

Court for the Southern District of New York. Because the DIP Loan and the proceeds therefore

that has been attached pursuant to the Attachment Order, as well as any future post-petition 

financing provided by Grupo Cinemex to the Debtors, is property of the Debtors and their estates, 

the automatic stay must apply to prevent the interference with the Debtors’ restructuring efforts. 

Permitting MN Theaters to continue exercising control over current and future DIP Loan rights 

places the Debtors’ reorganization efforts in serious jeopardy. MN Theaters seeks a judgment of

over $56,318,226.94 (representing all of the rent due under the lease without mitigation, offset or 

defenses) against Grupo Cinemex. As allowing the District Court Case to continue will negatively 

impact and diminish property of the estates, and possibly derail the Chapter 11 Cases, the 

automatic stay should apply to the District Court Case in its entirety.

37. Accordingly, the Debtors seek entry of a declaratory judgment finding that the 

District Court Case violates the automatic stay, and, as a result, is void ab initio. 

VII. SECOND CLAIM FOR RELIEF

(Section 105 – Injunctive Relief)

38. The Debtors repeat and re-allege paragraphs 1 – 37 of this Complaint as if fully set 

forth herein. 

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39. Section 105(a) of the Bankruptcy Code authorizes the Court to issue “any order, 

process or judgment that is necessary or appropriate to carry out the provisions of this title.” 11 

U.S.C. § 105(a). 

40. The Debtors will suffer irreparable harm absent the relief sought herein. If the 

claims of MN Theaters are not stayed, the District Court Case will interfere with the commitment 

and obligation of Grupo Cinemex to fund the DIP Loan, which will preclude the Debtors from 

making payments necessary to maintain operations while in chapter 11. Moreover, as Grupo 

Cinemex has expressed a willingness to fund a plan of reorganization, the District Court Case will 

impede the Debtors’ ability to successfully emerge from Chapter 11 by eliminating one significant 

source of funds and future restructuring outcomes. 

41. The irreparable harm to the Debtors from permitting the litigation to continue 

against Grupo Cinemex far outweighs any risk of harm to MN Theaters should the Court 

temporarily enjoin the District Court Case. A trial and final judgment in the District Court is at 

least many months away. In comparison to this lengthy process, the Debtors’ requested stay is 

temporary. Moreover, a delay in levy in the DIP financing presents no risk to MN Theaters, 

because no repayment of the DIP financing will occur prior to confirmation of the Debtor’s plan. 

Furthermore, MN Theaters is likely to recover at least some portion of its alleged damages through 

this Chapter 11 case. As such, the Chapter 11 process will necessarily impact MN Theaters’ 

ultimate judgment against Grupo Cinemex. Accordingly, the balance of the equities supports an 

injunction. 

42. This Court has the authority to grant a preliminary injunction. In addition, for the 

reasons stated above, there is a substantial likelihood that the Debtors will prevail on the merits of 

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their request for declaratory relief. There also is a substantial likelihood that the Debtors will 

prevail in their ultimate reorganization. 

43. Finally, the injunctive relief will serve the public interest by promoting the Debtors’ 

speedy and successful conclusion of these bankruptcy proceedings, which benefits all creditors

and other stakeholders, including MN Theaters. In addition, enjoining the District Court Case 

would avoid duplicative and inefficient litigation of MN Theaters’ intertwined claims.

VIII. PRAYER FOR RELIEF

WHEREFORE, PREMISES CONSIDERED, the Debtors respectfully request the 

following relief:

(a) entry of a declaratory judgment pursuant to section 362 of the Bankruptcy Code 

and Bankruptcy Rules 7001(7) and 7001(9) that the automatic stay applies to the District 

Court Case and the efforts of MN Theaters to exercise control over Grupo Cinemex and the 

DIP Loan, rendering those efforts, the entire District Court Case, void ab initio; or 

(b) in the alternative, entry of an order pursuant to section 105 of the Bankruptcy Code 

and Bankruptcy Rules 7001(7), 7001(9), and 7065 extending the automatic stay to Grupo 

Cinemex until the effective date of the plan, or a preliminary injunction pausing the 

prosecution of the entirety of the District Court Case until the earlier of (a) 60 days after the 

effective date of the Debtors’ chapter 11 plan, or (b) 6 months after the entry of the proposed 

order, without prejudice to extending such time period; and 

(c) all such other relief as the Court may find just and proper.

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Respectfully submitted this 17th day of August, 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: jbast@bastamron.com

Email: bamron@bastamron.com

Email: jleggett@bastamron.com

By: /s/ Jeffrey P. Bast

 Jeffrey P. Bast (FBN 996343)

 Brett M. Amron (FBN 148342)

 Jaime B. Leggett (FBN 1016485)

-andQUINN EMANUEL URQUHART & 

SULLIVAN, LLP

Eric Winston (admitted pro hac vice)

865 S. Figueroa Street, 10th Floor

Los Angeles, California 90017

Telephone: 213-443-3000

Facsimile: 213-443-3100

Email: ericwinston@quinnemanuel.com

-andJuan P. Morillo (FBN 135933)

1300 I Street, NW, Suite 900

Washington, D.C. 20005

Telephone: 202-538-8000

Facsimile: 202-538-8100

Email: juanmorillo@quinnemanuel.com

-andPatricia B. Tomasco (admitted pro hac vice)

711 Louisiana Street, Suite 500

Houston, Texas 77002

Telephone: 713-221-7000

Facsimile: 713-221-7100

Email: pattytomasco@quinnemanuel.com

COUNSEL FOR CINEMEX USA REAL 

ESTATE HOLDINGS, INC., CINEMEX 

HOLDINGS USA, INC., and CB THEATER 

EXPERIENCE LLC

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