124121305.1 

 UNITED STATES BANKRUPTCY COURT 

SOUTHERN DISTRICT OF FLORIDA 

MIAMI DIVISION 

www.flsb.uscourts.gov 

In Re: 

 Case No. 20-14695-LMI 

CINEMEX USA REAL ESTATE HOLDINGS, 

INC., CINEMEX HOLDINGS USA, INC., Chapter 11 

and CB THEATER EXPERIENCE LLC, 

 (Jointly Administered) 

Debtors. 

_______________________________________/ 

OBJECTION OF MN THEATERS 2006 LLC TO THIRD AMENDED JOINT CHAPTER 

11 PLAN OF REORGANIZATION OF CINEMEX USA REAL ESTATE HOLDINGS, 

INC., CINEMEX HOLDINGS USA, INC. AND CB THEATER EXPERIENCE LLC 

 MN Theaters 2006 LLC (“MN Theaters”), by and through its undersigned counsel, files 

this objection (this “Objection”) to the Third Amended Joint Chapter 11 Plan of Reorganization 

of Cinemex USA Real Estate Holdings, Inc., Cinemex Holdings USA, Inc. and CB Theater 

Experience LLC [ECF 772] (the “Plan”).1 

Summary of Objection 

1. Although the statutory goal of a chapter 11 case is to confirm a plan, a proposed 

plan must comply with other parts of the Bankruptcy Code. Indeed, the Bankruptcy Code contains 

strict requirements that a plan of reorganization must satisfy before it is approved, including those 

in section 1129(a)(3) of the Bankruptcy Code, which requires that a plan be “proposed in good 

faith and not by any means forbidden by law.” 11 U.S.C. § 1129(a)(3). The Plan as currently 

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

Holdings, Inc. (“RE Holdings”), and CB Theater Experience LLC (“CB Theater”, and collectively 

 

1

 Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Plan. 

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with Cinemex Holdings and RE Holdings, the “Debtors”) does not satisfy either of these 

requirements. 

2. First, the Plan is not proposed in good faith because it is not designed to effectuate 

a reorganization that maximizes value for creditors. Rather, the Plan is a vehicle to further the 

interests of Grupo Cinemex S.A. de C.V. (“Grupo Cinemex”)—the Debtors’ controlling parent—

and its other non-debtor affiliates, without disclosing significant terms and based on a value that 

is unsupported by competent evidence. Moreover, there is no reason to believe that a bona fide 

sales process occurred that would create confidence in the Debtors’ valuation. Instead, the process 

appears to have been designed to return the Debtors’ value to their affiliates on the cheap. 

3. The improper motives behind the Plan are laid bare by the all-encompassing 

releases and exculpations granted to Grupo Cinemex and its affiliate, Wine and Roses, S.A. de 

C.V. (“Wine & Roses”). Neither Grupo Cinemex nor Wine & Roses are providing sufficient value 

in these chapter 11 cases to warrant such releases and exculpations. It appears that these releases 

and exculpations are designed to prevent creditors, such as MN Theaters, from bringing claims 

against these entities for their ongoing wrongful conduct (as discussed further below). 

4. Second, under the Plan, the Debtors and Wine & Roses are aiding and abetting 

Grupo Cinemex’s ongoing violation of the Confirmation Order (as defined below) issued by the 

United States District Court for the Southern District of New York in an action by MN Theaters 

against Grupo Cinemex (the “District Court”, and such case, the “District Court Case”). Under 

that order, Grupo Cinemex has been required to deliver to the U.S. Marshal in the Southern District 

of New York property sufficient to secure MN Theaters’ more than $56 million claim against 

Grupo Cinemex. Rather than comply, Grupo Cinemex has flouted it, taking the position that 

Mexican law prohibits any person or any entity from transferring property located in Mexico to 

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the United States to comply with a lawful United States court’s order.2 The Plan aids and abets 

Grupo Cinemex’s ongoing violation and contempt of the Confirmation Order by permitting Grupo 

Cinemex to receive a distribution from the Debtors to repay, among other things, the debtor-inpossession (“DIP”) loans, which Grupo Cinemex will then take across the border to Mexico and 

will claim such funds are beyond the reach of United States law. 

5. Third, the Plan would enable fraudulent transfers. The Plan allows Grupo Cinemex 

to compromise its right to repayment of the DIP loans. Given MN Theaters’ levy on all of Grupo 

Cinemex’s property, including its right to repayment of the DIP loans, such a compromise would 

be nothing more than a transfer with the intent to hinder and delay MN Theaters’ recovery and 

defraud MN Theaters, as the ultimate beneficiary of any such compromise would be Grupo 

Cinemex’s affiliate and alter ego Wine & Roses. 

6. This would not be the first fraudulent transfer that the Debtors and its affiliates have 

effectuated using the bankruptcy laws in these proceedings. Under this Court’s orders, Grupo 

Cinemex had the obligation to provide certain DIP loans to the Debtors and a right to provide 

additional DIP loans. But the Debtors’ filings, including their monthly operating reports, show 

that Grupo Cinemex transferred that right to Wine & Roses so that Wine & Roses could provide 

(and has now provided) DIP loans to the Debtors. This was done only after this Court held that 

MN Theaters’ levy on the DIP Loan was not a violation of the automatic stay. Thus, it is clear that 

Debtors, Group Cinemex, and Wine & Roses are engaged in a scheme not just to violate the 

District Court’s lawful order, but this Court’s rulings as well. The fact that this was all done 

 

2

 Grupo Cinemex’s position is frivolous. For example, under Grupo Cinemex’s view, a Florida corporation or a lifelong citizen and resident of Florida who was subject to a Florida’s court’s judgment to pay money could avoid 

complying with that order simply by transferring property to Mexico. That is not the law. MN Theaters expects that 

the District Court will shortly confirm that Grupo Cinemex is in contempt. But regardless of whether it is in contempt, 

there is no question that Grupo Cinemex is currently in violation of that order and the Court should not authorize a 

Plan that assist in further violations of that order. 

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without Court approval—or even notice to the parties in interest—underscores the bad-faith nature 

of these parties’ conduct. 

7. At bottom, the Plan appears to be nothing more than a vehicle for non-debtor Grupo 

Cinemex to use the Bankruptcy Code and this Court to benefit itself at the expense of its and the 

Debtors’ creditors. As such, it does not satisfy section 1129(a)(3)’s requirements and cannot be 

confirmed. 

Background 

A. General Background. 

8. Prior to the Petition Date (as defined below), Debtor CB Theater and MN Theaters 

were parties to two unexpired leases (the “Leases”) pursuant to which CB Theater, as tenant, leased 

nonresidential real property from MN Theaters, as landlord. Grupo Cinemex guaranteed CB 

Theaters’ obligations under the Leases. 

9. On April 25, 2020, Cinemex Holdings and RE Holdings filed petitions for relief 

under chapter 11 of the Bankruptcy Code. On April 26, 2020 (collectively with April 25, 2020, 

the “Petition Date”), CB Theater filed a chapter 11 petition. Debtors continue to operate their 

businesses and manage their properties as debtors-in-possession. 

10. During these cases (the “Chapter 11 Cases”), the Court authorized Debtors to obtain 

debtor-in-possession (“DIP”) financing from Grupo Cinemex in the aggregate amount of up to 

$11,620,000. (See ECF 249, 363.) At no time have the Debtors sought, or the Court authorized, 

permission to receive DIP financing from any other entity. 

B. The District Court Case. 

11. On July 29, 2020, MN Theaters commenced the District Court Case (Case No. 

1:20-cv-05860-PKC) based on Grupo Cinemex’s failure to comply with its obligations under the 

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guaranties. [District Court Case ECF (“DC ECF”) 12.] On July 30, 2020, the District Court 

entered an order providing MN Theaters with prejudgment attachment to secure its ability to 

recover on a favorable judgment [DC ECF 2] (the “Attachment Order”, a copy of which is attached 

hereto as Exhibit A). By the terms of the Attachment Order and New York law, service of the 

Attachment Order on Grupo Cinemex on August 3, 2020, provided MN Theaters with a levy on 

Grupo Cinemex’s property, including on its (i) ownership interests in Cinemex Holdings (the 

“Stock Rights”) and (ii) right to repayment of the DIP Loan (the “DIP Repayment Rights”, and 

together with the Stock Rights, the “Exempted Property”). See N.Y. C.P.L.R. § 6214(e); Ex. A at 

¶ 3. Under New York law, the levy originally was in place from August 3, 2020, through at least 

November 1, 2020 (the “Levy Period”). See N.Y. C.P.L.R. § 6214(e). 

12. On August 17, 2020, the Debtors commenced an adversary proceeding (Adv. Pro. 

No. 20-01310) (the “Adversary Proceeding”) against MN Theaters and filed an emergency motion 

seeking to stay or enjoin the District Court Case. The Debtors argued that such relief was 

warranted because “Grupo Cinemex has provided debtor-in-possession financing in this 

bankruptcy case and has expressed a willingness to fund a plan of reorganization,” but that, “[a]s 

a result of MN Theaters’ attachments, Grupo Cinemex has indicated through counsel that it will 

no longer provide funding to the Debtors.” [Adv. Proc. ECF 2 (the “Stay Order”) at 3.]3

13. In ruling on the Debtors’ motion, the Court found that “the proceedings in the 

District Court Case up to and including entry of the Attachment Order” and, therefore, including 

MN Theaters levy on the DIP Loan, “did not constitute violations of the automatic stay[.]” [Stay 

Order at 3.] As discussed further below, once the Court held that the levy on the DIP Loan was 

 

3

 At that hearing, Debtors did not call any witnesses. And they never put forward any evidence that their lone 

independent director supported the drastic remedy they sought. 

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not void, i.e., that it would stand, the Debtors and Grupo Cinemex decided to side-step both that 

order and the District Court’s order, having Wine & Roses step into Grupo Cinemex’s shoes to 

provide a DIP loan without Court authorization and to replace Grupo Cinemex as the affiliate 

offering to fund the Debtors’ emergence from bankruptcy. 

14. On September 25, 2020, the District Court entered the Confirmation Order [DC 

ECF 48] (a copy of which is attached hereto as Exhibit B) confirming the Attachment Order, 

except with respect to the Exempted Property (as required by the Stay Order), and requiring Grupo 

Cinemex to “forthwith pay, transfer, or deliver any property to the U.S. Marshal . . . any property 

in the possession or custody of [Grupo Cinemex] except for the Exempted Property.” (See

Confirmation Order at ¶¶ 2-3.). 

15. As described in MN Theaters’ first Motion for Relief from the Automatic Stay [ECF 

739] (the “First Motion for Relief”), Grupo Cinemex has refused to comply with the Confirmation 

Order. (See First Motion for Relief at ¶¶ 14-15.) Instead, Grupo Cinemex has taken the frivolous 

position that delivering its property in Mexico to the United States absent an order from a Mexican 

court would violate Mexican law. Accordingly, it became necessary for MN Theaters to seek an 

extension of its levy on the DIP Loan, and—after MN Theaters received permission from this 

Court to do so—it asked the District Court for such an extension. On October 30, 2020, the District 

Court entered an Order [DC ECF 75] extending the Levy Period on the Exempted Property through 

January 12, 2021. 

16. As of the date of this filing, Grupo Cinemex still has not delivered any property to 

the U.S. Marshal to serve as security in the District Court Case. It is thus undisputed (and 

indisputable) that Grupo Cinemex has violated and continues to violate the Confirmation Order. 

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A motion for contempt against Grupo Cinemex for its willful noncompliance with the 

Confirmation Order is pending before the District Court. [DC ECF 57-59.] 

C. Plan and Disclosure Statement. 

17. On October 28, 2020, the Court entered an Order [ECF 777], which, among other 

things, approved the adequacy of the Disclosure Statement for Third Amended Joint Chapter 11 

Plan of Reorganization of Cinemex USA Real Estate Holdings, Inc., Cinemex Holdings USA, Inc. 

and CB Theater Experience LLC [ECF 773] (the “Disclosure Statement”) and scheduled a 

confirmation hearing regarding the Plan for November 24, 2020. 

18. The Plan contemplates the sale of the equity in the Reorganized Debtors (as defined 

in the Plan) (the “Sale”) to Wine & Roses that would result in, among other things, the payment 

in full and in cash of all administrative claims arising in connection with the DIP (such claim held 

by Grupo Cinemex, the “DIP Claim”), except to the extent that Grupo Cinemex “agrees to a less 

favorable treatment, in full and final satisfaction, settlement, release and discharge of and in 

exchange for” the DIP Claim. (See Plan at 5 (Definition of “DIP Loan Claims”), 18.). Because 

Grupo Cinemex is under an obligation to deliver property to the U.S. Marshal, any distribution on 

the DIP Claim should be paid directly to the U.S. Marshal to avoid aiding and abetting a further 

violation and contempt of the Confirmation Order. The Plan, however, provides that any 

distribution on the DIP Claim will be paid to Grupo Cinemex. (See Plan at 18.) 

19. The Plan also contemplates the Debtors repaying a “DIP Loan No. 2”, which 

purports to be a commitment by Wine & Roses to fund some undisclosed amount of financing. 

(See Plan at 5.) The Plan provides that “DIP Loan No. 2” is expressly subject to the Bankruptcy 

Court’s approval (see Plan at 5 (Definition of “DIP Loan No. 2”)), as required by the Bankruptcy 

Code, and to date, the Debtors have not sought this Court’s approval for DIP Loan No. 2. 

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However, as disclosed in the Debtors’ recently-filed monthly operating report, in September, the 

Debtors had already received $6,010,000 in “DIP Financing” from Wine & Roses (see ECF 791 

at 19). But even more shocking is that this payment appears to be in lieu of Grupo Cinemex’s 

obligation to fund up to $11,620,000 in DIP Loans. The Debtors’ monthly operating reports 

through September show that the Debtors have received exactly $11,620,000 in DIP financing (the 

amount authorized by the Court). But only $4,110,000 has actually come from Grupo Cinemex. 

In addition to the $6,010,000 from Wine & Roses, in August, the Debtors received another 

authorized DIP payment of $1.5 million from Operadora de Cinemas, S.A. de C.V. (“Operadora”) 

(see ECF 664 at 3. 19), which is Grupo Cinemex’s direct subsidiary. (See Disclosure Statement 

at 60.) The Plan appears to propose repaying Wine & Roses and Operadora for claims arising 

from these unauthorized financings (although Operadora is not included in the definition of “DIP 

Lenders” (see Plan at 5 (Definition of “DIP Lenders”)). 

20. The Plan also provides for broad releases (the “Releases”) and exculpations (the 

“Exculpations”) of any and all claims and causes of action that could be brought against Wine & 

Roses and Grupo Cinemex, among others, arising from or related to, among other things, the 

Debtors, the Debtors’ prepetition activities and operations, the Plan and any distributions 

thereunder, the Disclosure Statement, any “Restructuring Transaction”, the Sale, and the Chapter 

11 Cases. (See Plan at 46-47; 11 (Definition of “Released Parties”; 6-7 (Definition of “Exculpated 

Parties”).) Although creditors may opt out of the Releases, there is no corresponding option to opt 

out of the Exculpations. Thus, if the Plan is confirmed, even an objecting creditor will be deemed 

to have released Wine & Roses and Grupo Cinemex from any claims and causes of action related 

to their conduct in the Chapter 11 Cases, including the actions they have taken to hinder and delay 

MN Theaters from recovering against Grupo Cinemex. 

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Objection 

A. Legal Standard. 

21. The requirements for confirmation of a chapter 11 plan are set out in section 1129 

of the Bankruptcy Code. “In order for a Chapter 11 plan to be confirmed, the proponent of the 

plan has the burden of establishing the requirements enumerated in 11 U.S.C. § 1129(a)(1)-(a)(16) 

by a preponderance of the evidence.” In re Mableton, LLC, Case No. 15-40124-EJC, 2017 WL 

2480579, *10 (Bankr. S.D. Ga. June 7, 2017). Bankruptcy courts also have an “independent duty” 

to determine whether a plan satisfies each confirmation requirement. Id. at *11. One of these, set 

forth in section 1129(a)(3), requires that a plan be “proposed in good faith and not by any means 

forbidden by law.” 11 U.S.C. § 1129(a)(3). 

22. As the proponent of the Plan, the Debtors bear the burden of proving that the Plan 

satisfies all the requirements of confirmation under section 1129 of the Bankruptcy Code, 

including that the plan was proposed in good faith and not by any means forbidden by law. 

23. Whether a plan is filed in good faith “is determined in light of the totality of the 

circumstances.” In re Proud Mary Marina Corp., 338 B.R. 114, 123 (Bankr. M.D. Fla. 2006). 

Good faith requires a “reasonable likelihood that the plan will achieve a result consistent with the 

objectives and purposes of the Code.” In re Malkus, Inc., No. 03-07711-GLP, 2004 WL 3202212, 

*3 (Bankr. M.D. Fla. Nov. 15, 2004). 

24. In assessing good faith, “courts have looked to whether the debtor intended to abuse 

the judicial process and the process of the reorganization provisions.” In re Proud Mary Marina 

Corp., 338 B.R. at 123. Denial of confirmation for lack of good faith is appropriate where “it is 

evident that the debtor seeks merely to delay or frustrate the legitimate efforts of secured creditors 

to enforce their rights.” In re Bravo Enterprises USA, LLC, 331 B.R. 459, 472 (Bankr. M.D. Fla. 

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2005). Similarly, plans designed to benefit a debtor’s insiders do not satisfy the good faith 

requirement. See, e.g., In re Malkus, Inc., 2004 WL 3202212 at *3-4 (denying confirmation for 

lack of good faith where plan filed to benefit debtor’s principal); In re Davis Heritage GP 

Holdings, LLC, 443 B.R. 448, 461-62 (Bankr. N.D. Fla. 2011) (denying confirmation for lack of 

good faith where plan designed for “sole and exclusive benefit” of debtors’ insiders by reducing 

obligations on their guarantees). 

25. In addition to requiring good faith, section 1129(a)(3) also requires that a plan not 

be proposed “by any means forbidden by law.” Subsection (a)(3) requires that a plan “comply with 

all applicable law, not merely bankruptcy law.” In re Jandous Elec. Const. Corp., 115 B.R 46, 51 

(Bankr. S.D.N.Y. 1990). A plan “must comply with state law unless it has been preempted by the 

Bankruptcy Code.” See In re Alaska Fur Gallery, Inc., No. A09-00196-DMD, 2011 WL 4904425, 

*7-8 (Bankr. D. Alaska Apr. 29, 2011) (denying confirmation where proposed transfer under plan 

was likely a fraudulent transfer under state law). 

B. The Plan Fails to Comply Section 1129(a)(3)’s Requirement that It Be Proposed in 

Good Faith and Not by any Means Forbidden by Law. 

1. The Debtors’ Plan Benefits Their Controlling Parent 

26. Here, the Debtors’ Plan is designed solely to benefit their controlling parent, Grupo 

Cinemex, and to insulate it and the other entities it controls from liability, despite the lack of value 

such entities contributed in these Chapter 11 Cases. At a high level, the Plan proposes a stock sale 

to Wine & Roses, an entity under common control with Grupo Cinemex and, upon information 

and belief, formed for the sole purpose of acquiring the stock of the Reorganized Debtors (as 

defined in the Plan). This mere shuffling of the Debtors from one group of entities controlled by 

Grupo Cinemex to another (which is likely Grupo Cinemex’s alter ego), without any meaningful 

consideration being provided by Wine & Roses, is not a legitimate reorganization. 

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27. The Debtors have failed to disclose many of the material binding terms of the 

transaction documents regarding the Sale. Accordingly, no party has any sense of the terms 

controlling the Sale, what, if any, non-cash consideration is implicated in the Sale, including any 

assumed liabilities, and what tax or other benefits flow from the Sale. For example, the Debtors 

have not advised the Court or any of the creditors whether any of the Debtors’ net operating losses 

(“NOLs”) will be preserved by the Sale, and, if so, what benefit that conveys to Wine & Roses. If 

the NOLs are preserved, Wine & Roses likely will receive far more value from the transaction 

with the Debtors than it is paying. Instead of providing this critical information, the Plan provides 

only that, following the Sale, the Debtors’ equity, assets, and operations will be controlled by the 

exact same equity owners; they will just be held by an entity with a new name. 

28. The only parties that benefit from that transaction are the Debtors’ shareholders.4

 

Meanwhile, general unsecured creditors will likely receive only pennies on the dollar, will obtain 

no benefit from the Sale or any purchase price paid by Wine & Roses, and will not benefit from 

the NOLs that will profit Wine & Roses. 

29. The bad faith purpose of the Plan is glaring in light of the Releases and 

Exculpations, and particularly given that creditors cannot opt out of the Exculpations, which are 

substantively identical in effect to the Releases. There is simply no justification for these 

provisions of the Plan. Neither Wine & Roses nor Grupo Cinemex are providing sufficient value 

to warrant the benefit of the Releases and Exculpations, particularly in light of the fact that most 

of the Debtors’ creditors are receiving pennies on the dollar. These provisions are a transparent 

 

4

 On November 10, 2020, MN Theaters served Debtors, Wine & Roses, and Grupo Cinemex with discovery on topics 

related to this objection. Wine & Roses and Grupo Cinemex have not yet agreed to provide relevant discovery on 

these issues. Remarkably, Debtors’ counsel initially took that position that these discovery requests were 

simultaneously premature because MN Theaters had not yet filed this objection and too late because confirmation 

was scheduled for November 24, 2020. The parties are in ongoing discussions regarding discovery, but MN Theaters 

has reserved all rights with respect thereto, including the right to request an adjournment of the confirmation hearing. 

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effort to shield Grupo Cinemex and Wine & Roses from misconduct in these proceedings. Indeed, 

the releases and exculpations will directly harm MN Theaters by potentially shielding Grupo 

Cinemex and Wine & Roses from consequences for the terms of the Plan that, as discussed further 

below, aid and abet Grupo Cinemex’s ongoing contempt of the Confirmation Order and effectuate 

fraudulent transfers. 

30. The theme of the Plan is to retain all the value available in these Chapter 11 Cases 

through a secret and hurried sale to the Debtors’ shareholders/affiliates, all while having the Plan 

provide for Releases and Exculpations to insulate those entities for no value and without any option 

to opt-out. “This is the opposite of the intended purpose for Chapter 11 relief and is not good faith. 

Chapter 11 was not designed for the purpose of protecting assets and interests of non-debtor parties 

under the guise of a legitimate plan of reorganization.” In re Davis Heritage GP Holdings, LLC, 

443 B.R. at 46. Because the Plan has not been proposed in good faith it cannot be confirmed. See, 

e.g., In re Malkus, Inc., 2004 WL 3202212 at *3-4; In re Davis Heritage GP Holdings, LLC, 443 

B.R. at 461-62. 

2. The Debtors’ Plan Aids and Abets An Ongoing Violation and Contempt of the 

Confirmation Order and Authorizes Fraudulent Transfers. 

31. By providing for distribution on the DIP Claim to Grupo Cinemex, the Plan 

perpetuates Grupo Cinemex’s ongoing violation of and contempt of the District Court’s 

Confirmation Order. It also authorizes the Debtors, Grupo Cinemex, and Wine & Roses to commit 

a fraudulent transfer. 

32. First, as described above, any distribution received by Grupo Cinemex on the DIP 

Claim is subject to the Confirmation Order, and Grupo Cinemex will be required to turn over such 

distribution to the U.S. Marshal. However, Grupo Cinemex will not do so. Rather, consistent with 

its ongoing violation of the Confirmation Order, Grupo Cinemex will simply take that distribution 

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over the border to Mexico, never to be seen again. Allowing the distribution on the DIP Claim to 

be paid to Grupo Cinemex rather than the U.S. Marshal effectively licenses Grupo Cinemex to 

abscond with the funds to Mexico and continue its refusal to comply with the District Court’s 

orders. The Plan as proposed would allow Grupo Cinemex to continue this contempt and further 

frustrate MN Theaters’ claims against it.5

33. The Plan also runs counter to applicable non-bankruptcy law and is in bad faith 

because it authorizes Grupo Cinemex and the Debtors to “agree to less favorable treatment” than 

payment in full of the DIP Claim. (See Plan at 18.) This authorization allows Grupo Cinemex and 

the Debtors to commit a blatant violation of New York law. Specifically, any reduction or 

compromise of the DIP Claim, which is subject to MN Theaters’ levy pursuant to the Attachment 

Order, would be a voidable fraudulent transfer, as it would transfer the value of the DIP Repayment 

Rights from Grupo Cinemex to its affiliate, Wine & Roses, with actual intent to hinder, delay, and 

defraud MN Theaters. See, e.g., N.Y. Debt. & Cred. Law § 273(a)(1) (making a transfer voidable 

of it is made with “actual intent to hinder, delay or defraud any creditor of the debtor”). The Court 

should not allow the Plan to be used as a vehicle for a fraudulent transfer. 

34. The same is true for the value of any NOLs the Plan purports to provide to Wine & 

Roses. Those NOLs exist for the benefit of the Debtors’ shareholders, Grupo Cinemex, and 

constitute value in the Stock Rights that are subject to the Attachment Order. To the extent the 

Plan purports to preserve that value for Wine & Roses for no consideration, that is a further 

 

5

 Seeking to avoid raising this objection, on November 9, 2020, MN Theaters requested that both the Debtors and 

Grupo Cinemex agree to make any distributions under the Plan to Grupo Cinemex directly to the U.S. Marshal, so 

that these funds could be secure. It was not until nearly a week later that Debtors’ counsel suggested that Debtors 

might consent to this. A copy of MN Theaters’ counsel’s November 9, 2020 letter is attached hereto as Exhibit C. 

To the extent that parties are able to agree on a revision to the Plan that requires that the full amount of the DIP Loans 

be transferred to the U.S. Marshal, rather than to Grupo Cinemex and its affiliates, MN Theaters will inform the Court. 

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fraudulent transfer under New York law by Grupo Cinemex. Again, the Plan cannot be proposed 

in good faith when it countenances fraudulent transfers. 

35. Finally, the Plan contemplates transactions that are forbidden by the Bankruptcy 

Code. Specifically, the Plan contemplates the repayment of DIP Loan No. 2 in full and in cash to 

Wine & Roses, even though the Debtors never sought authority for post-petition borrowings from 

any party other than Grupo Cinemex. The financing by Wine & Roses (and Operadora) were in 

clear violation of the Bankruptcy Code. 11 U.S.C. § 364(b), (c), and (d) (providing that a debtor 

may obtain credit outside the ordinary course only if authorized by the bankruptcy court after 

notice and a hearing). Accordingly, using the Plan to repay those loans to Wine & Roses and 

Operadora not only furthers improper transactions in violation of the Bankruptcy Code, but also 

rewards Grupo Cinemex—which owns Operadora and is believed to be the alter ego of Wine & 

Roses—for violating this Court’s DIP orders and scheming to evade the District Court’s orders. 

36. Moreover, repayment of the DIP financing provided by Wine & Roses (and 

Operadora) to those parties would complete yet another fraudulent transfer. It was Grupo Cinemex 

that was authorized to provide that funding. To the extent that Grupo Cinemex transferred that 

right to Wine & Roses and Operadora, that is yet another fraudulent transfer. Any confirmable 

plan must provide that those funds, likewise, when repaid by the Debtors, would be directed to the 

U.S. Marshal. 

Conclusion 

37. For the reasons set forth above, the Plan does not satisfy the requirements for 

confirmation, including those pursuant to section 1129(a)(3) of the Bankruptcy Code, as the Plan 

was not proposed in good faith and would result in violations of non-bankruptcy law. Accordingly, 

confirmation of the Plan should be denied. 

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 WHEREFORE, MN Theaters respectfully requests that the Court enter an order (i) denying 

confirmation of the Plan and (ii) granting such other and further relief as is just and proper. 

Dated: November 16, 2020 

Respectfully submitted, 

/s/ David L. Gay 

David L. Gay 

Florida Bar No. 839221 

Carlton Fields, P.A. 

100 SE 2nd Street, Suite 4200 

Miami, FL 33131 

Telephone: 305-530-0050 

Facsimile: 305-530-0055 

E-mail: dgay@carltonfields.com 

and 

KATTEN MUCHIN ROSENMAN LLP 

/s/ Peter A. Siddiqui 

Peter A. Siddiqui 

525 West Monroe Street 

Chicago, Illinois 60661-3693 

Telephone: 312-902-5455 

Facsimile: 312-902- 1061 

peter.siddiqui@katten.com 

 

Counsel to MN Theaters 2006 LLC 

 

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124121305.1 

CERTIFICATE OF SERVICE 

 I certify that, on November 16th, 2020, a true and correct copy of the foregoing Objection 

of MN Theaters 2006 LLC to Third Amended Joint Chapter 11 Plan of Reorganization of Cinemex 

USA Real Estate Holdings, Inc., Cinemex Holdings USA, Inc. and CB Theater Experience LLC 

was served via ECF on all parties who receive service in these jointly administered Bankruptcy 

case via electronic case filings. 

 /s/ David L. Gay 

 

 

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