IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
In re: § Chapter 11
§ CEC ENTERTAINMENT, INC., et al., § Case No. 20-33163 (MI)
§ Debtors.1 § (Jointly Administered)
§ SUPPLEMENT TO MOTION OF DEBTORS FOR ENTRY OF
AN ORDER (I) APPROVING DISCLOSURE STATEMENT AND FORM AND MANNER OF NOTICE OF DISCLOSURE STATEMENT HEARING, (II) ESTABLISHING SOLICITATION AND VOTING PROCEDURES, (III) SCHEDULING CONFIRMATION HEARING, (IV) ESTABLISHING NOTICE AND OBJECTION PROCEDURES FOR CONFIRMATION OF THE PROPOSED PLAN, (V) APPROVING NOTICE PROCEDURES FOR THE ASSUMPTION AND ASSIGNMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES, AND (VI) GRANTING RELATED RELIEF
A hearing will be conducted on this matter on November 4, 2020 at 12:00 p.m. (Prevailing Central Time) in Courtroom 404, floor, 515 Rusk St, Houston, TX 77002. You may participate in the hearing either in person or by audio/video connection.
Audio communication will be by use of the Court’s dial-in facility. You may access the facility at (832) 917-1510. You will be responsible for your own long-distance charges.
Once connected, you will be asked to enter the conference room number. Judge Isgur’s conference room number is 954554.
You may view video via GoToMeeting. To use GoToMeeting, the Court recommends that you download the free GoToMeeting application. To connect, you should enter the meeting code “JudgeIsgur” in the GoToMeeting app or click the link on Judge Isgur’s home page on the Southern District of Texas website. Once connected, click the settings icon in the upper right corner and enter your name under the personal information setting.
1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, as applicable, are BHC Acquisition Corporation (0947); CEC Entertainment Concepts, L.P. (3011);
CEC Entertainment Holdings, LLC (9147); CEC Entertainment, Inc. (5805); CEC Entertainment International, LLC (8177); CEC Entertainment Leasing Company (4517); CEC Leaseholder, LLC (N/A); CEC Leaseholder #2, LLC (N/A); Hospitality Distribution Incorporated (5502); Peter Piper Holdings, Inc. (6453); Peter Piper, Inc. (3407);
Peter Piper Texas, LLC (6904); Peter Piper Mexico, LLC (1883); Queso Holdings Inc. (1569); SB Hospitality Corporation (4736); SPT Distribution Company, Inc. (8656); and Texas PP Beverage, Inc. (6895). The Debtors’
corporate headquarters and service address is 1707 Market Place Boulevard #200, Irving, TX 75063.
2 Hearing appearances must be made electronically in advance of the hearing. To make your electronic appearance, go to the Southern District of Texas website and select
“Bankruptcy Court” from the top menu. Select “Judges’ Procedures,” then “View Home Page” for Judge Isgur. Under “Electronic Appearance” select “Click here to submit Electronic Appearance”. Select the case name, complete the required fields and click
“Submit” to complete your appearance.
CEC Entertainment, Inc. and its debtor affiliates in the above-captioned chapter 11 cases, as debtors and debtors in possession (collectively, the “Debtors” or the “Company”), submit this supplement (this “Supplement”) to the Motion of Debtors for Entry of an Order (I) Approving Disclosure Statement and Form and Manner of Notice of Disclosure Statement Hearing, (II) Establishing Solicitation and Voting Procedures, (III) Scheduling Confirmation Hearing, (IV) Establishing Notice and Objection Procedures for Confirmation of Proposed Plan, (V) Approving Notice Procedures for the Assumption and Assignment of Executory Contracts Unexpired Leases, and (VI) Granting Related Relief (ECF No. 944) (the “Motion”). The Debtors respectfully represent as follows:
SUPPLEMENTAL BACKGROUND
1. From the outset of these cases, the Debtors have been diligently working to formulate a strategy for a successful restructuring of their businesses in the face of unprecedented uncertainty resulting from the novel coronavirus global pandemic. The Debtors, with the assistance of their professional advisors, have devoted significant time and energy to refining and adapting their business plan and strategy to address current and future market conditions. The Debtors have also engaged in extensive negotiations with various stakeholders in an effort to formulate a value-maximizing path forward in resolution of these chapter 11 cases.
2. As a result of these efforts, the Debtors negotiated at arm’s length a Plan Support Agreement, dated as of September 4, 2020 (the “Original PSA”), as amended and restated
3 on September 25, 2020 (as amended and restated, the “Amended and Restated PSA”) and a restructuring term sheet, as amended, attached as Exhibit A to the Amended and Restated PSA (the “Restructuring Term Sheet”) with the Consenting Creditors (as defined in the Amended and Restated PSA) comprising certain unaffiliated holders of First Lien Debt Claims and Senior Unsecured Note Claims. The Amended and Restated PSA and Restructuring Term Sheet provide for a value-maximizing restructuring (the “Restructuring”) these chapter 11 cases.
3. The Debtors, led by their investment banker, PJT Partners LP, launched a comprehensive and robust marketing process to solicit bids for a potential sale transaction for the Reorganized Equity or, alternatively or in combination therewith, Assets as part of the formalized Sale Process described in the Bidding Procedures (each as defined in the Bidding Procedures Motion) that the Debtors had proposed pursuant to the Original PSA and Amended and Restated PSA.2 The Sale Process included a deadline by which the Requisite Consenting Creditors were required to disclose the Reserve Price (each as defined in the Amended and Restated PSA). The proposed Bidding Procedures also proposed Cure Procedures (as defined in the Bidding Procedures Motion). Moreover, the Bidding Procedures stated that the Debtors had the unconditional right to terminate the Sale Process at any time and, instead, pursue confirmation of a chapter 11 plan premised on a debt-for-equity exchange or similar transaction (the “Plan Without Third-Party Sale Toggle”). The terms of such a plan, including classification of claims and equity interests, the voting rights and treatment of each such class, and the manner in which
2 See generally Emergency Motion of Debtors for Order (I) Approving Bidding Procedures Establishing a Sale Process for the Debtors’ Reorganized Equity, (II) Scheduling Auction, (III) Approving Cure Notice Procedures for Executory Contracts and Unexpired Leases, and (IV) Granting Related Relief (ECF No. 834) (the “Bidding Procedures Motion”).
4 such a plan would be implemented, were set forth in the Restructuring Term Sheet and Original Plan,3 which was attached to the Original Disclosure Statement4 filed on September 25, 2020.
4. Following the filing of the Motion, the Requisite Consenting Creditors disclosed to the Debtors that the Reserve Price was $875,000,000 in cash. The Debtors subsequently disclosed the Reserve Price to bidders. Based on bidders’ feedback on the Reserve Price, the Debtors exercised the Plan Without Third-Party Sale Toggle.
5. After disclosing the Reserve Price and exercising the Plan Without Third- Party Sale Toggle, the Debtors continued negotiations with their major creditors. As a result, on October 21, 2020, the Debtors, the Initial Consenting Creditors, the Initial Additional Consenting Creditors, and the Ad Hoc Noteholders (as defined in the Amended Revised Verified Statement of the Ad Hoc Noteholders Pursuant to Bankruptcy Rule 2019 (ECF No. 975)) entered into that certain Second Amended and Restated Plan Support Agreement (the “Second Amended and Restated PSA”).5
6. On October 21, 2020, the Debtors, the Initial Consenting Creditors, and the Official Committee of Unsecured Creditors (the “Creditors’ Committee”) reached an agreement with respect to the treatment under the Amended Plan of Class 5 General Unsecured Claims and certain other related terms. Such agreement is reflected in the Amended Plan and related Disclosure Statement (each as defined below) and provides, among other things, that: (i) on the
3 Joint Chapter 11 Plan of CEC Entertainment, Inc. and Its Debtor Affiliates (ECF No. 942) (the “Original Plan”).
4 Disclosure Statement for Joint Chapter 11 Plan of CEC Entertainment, Inc. and Its Debtor Affiliates (ECF No. 943) (the “Original Disclosure Statement”).
5 See Notice of Filing of Second Amended and Restated Plan Support Agreement (ECF No. 1190, Ex. A)
5 Effective Date, the Debtors will establish a trust to administer, process, settle, resolve, liquidate, satisfy, and pay General Unsecured Claims (the “GUC Trust”), which shall be funded with $5.5 million in Cash for distribution to General Unsecured Creditors after claims reconciliation and payment of trust expenses; (ii) each holder of an Allowed General Unsecured Claim will receive its Pro Rata Share of the GUC Cash Pool6 less amounts necessary to administer the GUC Trust;
(iii) the Debtors and Reorganized Debtors, as applicable, will waive all chapter 5 causes of action against trade creditors; (iv) the Creditors’ Committee will support and not object to the Plan; and (vi) the Creditors’ Committee will submit a letter, attached as Exhibit C to the Disclosure Statement, in support of the Plan.
7. Accordingly, the Debtors have filed contemporaneously herewith the Amended Plan and related Disclosure Statement. The Amended Plan and Disclosure Statement reflect the Debtors’ decision to pursue a debt-for-equity exchange on the same terms set forth in the Original Plan and described in the Original Disclosure Statement, as amended to account for the agreements reached with the Ad Hoc Noteholders and the Creditors’ Committee.
8. This Supplement, the Amended Plan, and its related Disclosure Statement also streamline and clarify the terms of the Original Plan by eliminating references to the Sale Process, establishing dates governing Plan solicitation and related procedures, and providing that, to the extent a third party proposes a Potential Alternative Transaction (as defined in the Second
6 As defined in the Plan, “GUC Cash Pool” means Cash in an amount of $5.5 million to be transferred to the GUC Trust and administered by the GUC Trustee on the Effective Date for purposes of (i) satisfying the obligations of the GUC Trust, including the GUC Trust Expenses and (ii) making distributions to holders of Allowed General Unsecured Claims in accordance with Sections 4.5 and 5.12 of the Plan.
6 Amended and Restated PSA) to the Debtors that results in total enterprise value greater than
$875,000,000, the Debtors and the Initial Consenting Creditors will consider such proposal.
9. For the reasons set forth below, the Debtors believe that the relief requested in the Motion, as modified herein, is appropriate and will lead to the efficient resolution of these chapter 11 cases.
RELIEF REQUESTED
10. Pursuant to sections 365, 1125, 1126, 1128, and 105 of title 11 of the United States Code (the “Bankruptcy Code”), Rules 2002, 3001, 3003, 3016, 3017, 3018, 3020, and 9006 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), Rules 2002-1 and 3016-1 of the Local Bankruptcy Rules of the United States Bankruptcy Court for the Southern District of Texas (the “Local Rules”), and the Procedures for Complex Chapter 11 Cases in the Southern District of Texas (effective as of August 7, 2020, the “Complex Chapter 11 Procedures”), the Debtors request approval of an order substantially in the form attached hereto as Exhibit A (the “Revised Proposed Order”):
i. approving the Amended Disclosure Statement for Amended Joint Chapter 11 Plan of CEC Entertainment, Inc. and Its Debtor Affiliates (the “Disclosure Statement”) as containing adequate information pursuant to section 1125 of the Bankruptcy Code; 7 ii. scheduling a hearing (the “Confirmation Hearing”) to consider
confirmation of the Amended Joint Chapter 11 Plan of CEC Entertainment, Inc. and Its Debtor Affiliates (the “Amended Plan”);
iii. approving the below described solicitation procedures for the Amended Plan;
7 Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Disclosure Statement.
7 iv. approving the below described confirmation procedures for the
Amended Plan;
v. approving the notice and objection procedures for the assumption of executory contracts and unexpired leases; and
vi. granting related relief.
11. For the convenience of the Bankruptcy Court and parties in interest, the below chart provides a summary of the key dates sought in connection with the Proposed Order:
Event Deadline
Disclosure Statement Objection Deadline (extended from the original objection
deadline of October 23, 2020) Monday, November 2, 2020
Disclosure Statement Hearing Wednesday, November 4, 2020 at 12:00 p.m.
(prevailing Central Time) Voting Record Date Wednesday, November 4, 2020 Mailing Deadline for Confirmation
Hearing Notice Three (3) Business Days after entry of Disclosure Statement Order
Mailing Deadline for Cure Amounts and
Filing of Cure Notice Three (3) Business Days after entry of Disclosure Statement Order
Solicitation Date Three (3) Business Days after entry of Disclosure Statement Order
Purchase Transaction Election Date Three (3) Business Days prior to Plan Supplement Filing Deadline
Request for Estimation Deadline Monday, November 30, 2020 Plan Supplement Filing Deadline Tuesday, December 1, 2020
Rule 3018(a) Motion Deadline Wednesday, December 2, 2020 at 4:00 p.m.
(prevailing Central Time)
Voting Deadline Tuesday, December 8, 2020 at 4:00 p.m.
(prevailing Central Time)
Plan Objection Deadline Tuesday, December 8, 2020 at 4:00 p.m.
(prevailing Central Time)
Assumption and Cure Objection Deadline Tuesday, December 8, 2020 at 4:00 p.m.
(prevailing Central Time) Ballot Certification Deadline Friday, December 11, 2020 Deadline to File Confirmation Brief and
Reply to Plan Objections Sunday, December 13, 2020
Confirmation Hearing [Tuesday, December 15, 2020 at [●] [a.m./p.m.]
(prevailing Central Time)]
8 12. For the further reference of the Bankruptcy Court and parties in interest, the Debtors provide below a list of the various exhibits and documents cited throughout the Motion and this Supplement, as applicable:
Document Exhibit
Proposed Order Exhibit A
Notice of Disclosure Statement Hearing Exhibit B Redlines of Proposed Order, Confirmation
Hearing Notice, and Ballots Exhibit C
Disclosure Statement for Amended Plan Filed contemporaneously herewith
Amended Plan Exhibit A to the Disclosure Statement
Confirmation Hearing Notice Exhibit 1 to the Proposed Order Form of First Lien Debt Claims Ballot Exhibit 2 to the Proposed Order Form of Class 4 Master Ballot Exhibit 3 to the Proposed Order Form of Ballot for Beneficial Holders of Senior
Unsecured Notes Claims (Class 4) Exhibit 4 to the Proposed Order Form of General Unsecured Claims Ballot Exhibit 5 to the Proposed Order Notice of Non-Voting Status Exhibit 6 to the Proposed Order
13. Additionally, for the convenience of the Bankruptcy Court and parties in interest, redlines comparing the Proposed Order, Confirmation Hearing Notice, and Ballots filed with the Motion to those filed with this Supplement are attached hereto as Exhibit C.
SUMMARY OF AMENDED PLAN
14. As described in more detail in the Disclosure Statement, the Amended Plan provides for a comprehensive restructuring of the Company’s balance sheet and a significant investment of capital in the Debtors’ business. The Amended Plan is the result of extensive good faith negotiations, overseen by the Debtors’ Restructuring Committee, among the Debtors and a number of their key economic stakeholders, that have agreed to support the Amended Plan pursuant to that certain Original PSA, the Amended and Restated PSA, and the Second Amended and Restated PSA. With the addition of the Initial Additional Consenting Creditors and the
9 Noteholder Additional Consenting Creditors, the Second Amended and Restated PSA includes holders of the overwhelming majority of the obligations outstanding under each of the First Lien Credit Agreement and Senior Unsecured Notes Indenture.
15. Specifically, the Amended Plan, provides for, among other things:
A debt-for-equity exchange transaction (or similar transaction);
The following treatment of Claims and Equity Interests:8
o Each holder of an Allowed First Lien Debt Claim shall receive, in full and final satisfaction of such Allowed First Lien Debt Claim, pursuant to the Restructuring Transactions, its Pro Rata Share of (a) 100% of the New Equity Interests, subject to dilution by the (w) New Warrant Equity (if any), (x) Exit Facility Equity, (y) Exit Facility Put Option Premium, and (z) MIP Equity, and (b) the New Second- Out Term Loan.
o Each holder of an Allowed Senior Unsecured Notes Claim shall receive, in full and final satisfaction of such Senior Unsecured Notes Claim, pursuant to the Restructuring Transactions, its Pro Rata Share of the New Warrants, subject to dilution by the MIP Equity.
o Each holder of an Allowed General Unsecured Claim will receive a GUC Trust Interest, which shall entitle each holder of an Allowed General Unsecured Claim to receive, in full and final satisfaction of such Allowed General Unsecured Claim, its Pro Rata Share of the GUC Trust Assets after the GUC Trustee expenses have been paid in full or otherwise reserved for.
o Each holder of Existing Queso Interest will receive no recovery.
A $200 million first lien first out term loan facility (the “Exit Facility”), which will be backstopped by the Initial Consenting Creditors, and which is subject to increase as necessary to repay claims under the DIP Facility and fund the liquidity requirements of the Reorganized Debtors.
8 The following bullets are intended for summary purposes only. A more detailed discussion of treatment under the Amended Plan is contained in Section II of the Disclosure Statement.
10 16. The Debtors will satisfy applicable Claims under the Amended Plan through distributions of Cash, the Exit Facility, the New Second-Out Term Loan Facility, New Equity Interests, and New Warrants.
THE DISCLOSURE STATEMENT
17. Pursuant to section 1125 of the Bankruptcy Code and Bankruptcy Rule 3016(b), the Debtors prepared and filed the Disclosure Statement to provide parties with adequate information and disclosure regarding the terms of the Amended Plan. The Debtors intend to provide parties with copies of the Disclosure Statement, once approved, in connection with the Debtors’ solicitation of votes to accept or reject the Amended Plan.
A. Approval of the Disclosure Statement
18. The Disclosure Statement provides many of the types of information identified in the Motion, including, but not limited to:
(a) a Summary of Treatment Under the Amended Plan (Section II);
(b) the operation of the Debtors’ businesses (Section III);
(c) a description of the Debtors’ capital structure (Section III.D);
(d) the indebtedness of the Debtors and information regarding pending claims (Sections III.D)
(e) key events leading to the commencement of the Debtors’ chapter 11 cases (Section IV);
(f) events during the chapter 11 cases (Section V);
(g) tax consequences of the Amended Plan (Section VII).
(h) risk factors affecting the Debtors (Section VIII);
(i) a disclaimer, which indicates that no statements or information concerning the debtors or their assets or securities are authorized, other than those set forth in the Disclosure Statement (Section VIII.E.xii);
11 (j) requirements for confirmation of the Plan (Section X.C); and
(k) an overview of a liquidation analysis under chapter 7 (Section XI.C;
Exhibit F).
19. In addition to the type of information that courts typically look for in a disclosure statement, the Disclosure Statement provides an analysis of the alternatives to confirmation and consummation of the Amended Plan (Section XI), and concludes with the Debtors’ recommendation that holders of Claims eligible to vote should vote to accept the Amended Plan because it is in the best interests of all holders of Claims against the Debtors. See Section XII.
20. Based on the foregoing and the Motion, the Debtors submit that the Disclosure Statement contains adequate information for a voting creditor to make an informed judgment regarding whether to vote to accept or reject the Amended Plan, and therefore satisfies the requirements of section 1125 of the Bankruptcy Code. Thus, the Debtors respectfully request that the Bankruptcy Court approve the Disclosure Statement as containing adequate information in satisfaction of the requirements of section 1125 of the Bankruptcy Code.
B. The Disclosure Statement Provides Adequate Notice of Release, Exculpation, and Injunction Provisions in the Plan
21. Like the Original Plan, the Amended Plan includes injunctions, releases, and exculpations in Sections 10.5, 10.6, 10.7, 10.8, and 10.9. Exhibit H to the Disclosure Statement describes in detail the releases provided under the Amended Plan, the entities to be providing such releases, the entities to be released, and the Claims and causes of action to be released. Additionally, Exhibit H of the Disclosure Statement sets forth the terms of the proposed exculpation provision under the Amended Plan and the proposed injunction related to the release and exculpation provisions in the Amended Plan. The Amended Plan’s injunction, release, and
12 exculpation provisions is set forth in the Disclosure Statement in conspicuous, bold print.
Accordingly, the Debtors respectfully submit that the Disclosure Statement complies with Bankruptcy Rule 3016(c).
C. Approval of the Notice of Disclosure Statement Hearing
22. In accordance with Bankruptcy Rules 2002(a) and 3017 and Local Rule 2002-1, contemporaneously with the filing of this Supplement, the Debtors will serve a notice of hearing on the Disclosure Statement (the “Disclosure Statement Notice”), substantially in the form annexed hereto as Exhibit B. The Bankruptcy Court has scheduled a hearing on the Disclosure Statement for November 4, 2020 at 12:00 p.m. (prevailing Central Time) (the
“Disclosure Statement Hearing”) and the Debtors properly served notice of the Disclosure Statement Hearing. See Notice of Hearing to Consider Approval of Disclosure Statement for Debtors’ Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code (ECF No. 1153).
The Debtors have served the Disclosure Statement Notice by electronic transmission, by overnight mail or by first class mail to (i) the Debtors c/o CEC Entertainment, Inc., 1707 Market Place Boulevard, Suite 200, Irving, Texas 75063 (Attn: Rodolfo Rodríguez Jr., Esq.
([email protected])); (ii) the Office of the United States Trustee for the Southern District of Texas, 515 Rusk Street, Suite 3516, Houston, Texas 77002 (Attn: Hector Duran and Stephen Statham ([email protected], [email protected]); (iii) counsel for the Creditors’ Committee, Kelley Drye & Warren LLP, 101 Park Avenue, New York, New York 10178 (Attn: Jason Adams, Esq. ([email protected]), and Lauren Schlussel, Esq.
([email protected])), and Womble Bond Dickinson (US) LLP, 811 Main Street, Suite 3130, Houston, Texas 77002 (Attn: Matthew Ward, Esq. ([email protected]), and
13
Todd Atkinson, Esq. ([email protected])); (iv) counsel to the Consenting Creditors (as defined in the Plan), Akin Gump Strauss Hauer & Feld LLP, Bank of America Tower, One
Bryant Park, New York, New York 10036 (Attn: Jason P. Rubin, Esq. ([email protected]), Daniel I. Fisher, Esq. ([email protected]), and Phillip C. Dublin, Esq.
([email protected])); (v) the Office of the United States Attorney, 1000 Louisiana Street, Suite 2300, Houston, Texas 77002; (vi) the Securities and Exchange Commission, 100 F Street, NE, Washington, D.C. 20549; (vii) the Internal Revenue Service, P.O. Box 7346, Philadelphia, Pennsylvania 19101-7346; (viii) the registered and beneficial holders of Interests (as defined in the Amended Plan) in the Debtors; (ix) any other known holders of Claims against and equity interests in the Debtors; (x) any known counterparties to the Debtors’ executory contracts or unexpired leases; (xi) any known parties to pending litigation with the Debtors; and (xii) and all parties who have requested notice in these chapter 11 cases pursuant to Bankruptcy Rule 2002 (collectively, the “Notice Parties”). The Disclosure Statement Notice provides appropriate notice of the Disclosure Statement Hearing and of the deadline by which objections must be filed to approval of the Disclosure Statement, November 2, 2020 (the “Disclosure Statement Objection Deadline”) (extended from the original objection deadline of October 23, 2020). The Debtors respectfully submit that such notice is sufficient under the circumstances. The Debtors request that the Bankruptcy Court find that such notice is due and proper and that no further notice is necessary.
23. Also contemporaneously herewith, and in addition to the parties who will receive Solicitation Packages (defined and described below), the Debtors have or will provide, in accordance with Bankruptcy Rule 3017(d), at their expense, by electronic and/or first class mail,
14 copies of the Disclosure Statement and the Amended Plan with the Disclosure Statement Notice to: (i) the U.S. Trustee; (ii) all parties that request or that are required to receive notice pursuant to Bankruptcy Rule 2002; and (iii) all parties who have specifically requested such documents in the manner specified in the Disclosure Statement Notice. Copies of the Disclosure Statement and the Amended Plan are also on file with the Office of the Clerk of the Bankruptcy Court for review during normal business hours (a fee may be charged) and are also available free of charge on the Debtors’ claims agent’s website at https://cases.primeclerk.com/cecentertainment/Home-Index.
24. The Debtors submit that the foregoing procedures provide adequate notice of the Disclosure Statement Hearing and the Disclosure Statement Objection Deadline for all purposes and, accordingly, request that the Bankruptcy Court approve such procedures.
ASSUMPTION AND ASSIGNMENT PROCEDURES
25. The Amended Plan, like the Original Plan, and the Revised Proposed Order set forth procedures with respect to the assumption, rejection, and assumption and assignment of executory contracts and unexpired leases. However, the Amended Plan and the Revised Proposed Order clarify those procedures by disassociating them from the Cure Procedures set forth in the Bidding Procedures Motion.
26. Section 8.1 of the Amended Plan provides that each of the Debtors’
executory contracts and unexpired leases will be deemed assumed and, if applicable, assigned by the applicable Debtor as of the Effective Date, unless such contract or lease: (i) was previously assumed, assumed and assigned, or rejected by the Debtors, pursuant to a Final Order of the Bankruptcy Court, (ii) previously expired or terminated pursuant to its own terms or by agreement of the parties thereto, (iii) is the subject of a motion to reject filed by the Debtors on or before the
15 Confirmation Date, or (iv) is specifically designated as a contract or lease to be rejected on the Schedule of Rejected Contracts. Section 8.1 of the Amended Plan further provides that the Debtors, with the consent of the Requisite Consenting Creditors, reserve the right, prior to the Confirmation Hearing, to amend the Schedule of Rejected Contracts to add or remove any executory contract or unexpired lease. Section 8.1 of the Amended Plan also provides that entry of the Confirmation Order (as defined in the Amended Plan) by the Bankruptcy Court shall constitute approval of the assumptions, assignments (if applicable) or rejections provided for in the Amended Plan pursuant to sections 365(a) and 1123 of the Bankruptcy Code, subject to (i) resolution of any disputes in accordance with Section 8.2 of the Amended Plan with respect to the contracts or leases subject to such dispute and (ii) the occurrence of the Effective Date (as defined in the Amended Plan). Moreover, Section 8.1 of the Amended Plan provides that each executory contract and unexpired lease assumed and, if applicable, assigned pursuant to the Amended Plan shall vest in and be fully enforceable by the applicable Reorganized Debtor in accordance with its terms, except as modified by the provisions of the Amended Plan, any Final Order of the Bankruptcy court authorizing and providing for its assumption or assumption and assignment, as applicable, or applicable law.
27. Pursuant to Section 8.2 of the Amended Plan, the Debtors shall serve a Cure Notice on parties to executory contracts and unexpired leases no later than three (3) Business Days after entry of the Disclosure Statement Order (each as defined in the Amended Plan). In accordance with Section 8.2 of the Amended Plan, this Cure Notice shall set forth Cure Amounts (as defined in the Amended Plan) to be paid in connection with an executory contract or unexpired lease of the Debtors that may be assumed or assumed and assigned under the Amended Plan
16 pursuant to section 365 of the Bankruptcy Code. This Cure Notice shall include: (i) procedures for objecting to proposed assumptions or assumptions and assignments of executory contracts and unexpired leases, (ii) any Cure Amount to be paid in connection therewith, and (iii) procedures for resolution by the Bankruptcy Court of any related disputes. Section 8.2 of the Amended Plan further provides that if a counterparty to any executory contract or unexpired lease that the Debtors intend to assume or assume and assign is not listed on the applicable Cure Notice, the proposed Cure Amount for such executory contract or unexpired lease shall be deemed to be zero dollars ($0). Additionally, Section 8.2 of the Amended Plan provides that any counterparty to an executory contract or unexpired lease shall have the time prescribed by the Disclosure Statement Order to object to the proposed Cure Amount listed on the Cure Notice or to the proposed assumption and assignment (if applicable) of an executory contract or unexpired lease. The Debtors request that the Court set December 8, 2020 at 4:00 p.m. (prevailing Central Time) as the deadline for any counterparty to an executory contract or unexpired lease to file an objection to the proposed assumption, assignment (if applicable), or Cure Amount (the “Assumption and Cure Objection Deadline”).
28. Section 8.2 of the Amended Plan further provides that any counterparty to an executory contract or unexpired lease that fails to object timely to the proposed assumption, assignment (if applicable) or Cure Amount (i) shall be deemed to have assented to such assumption, assignment (if applicable) or Cure Amount, notwithstanding any provision thereof that purports to (1) prohibit, restrict, or condition the transfer or assignment of such contract or lease or (2) terminate or permit the termination of a contract or lease as a result of any direct or indirect transfer or assignment of the rights of the Debtors under such contract or lease or a change,
17 if any, in the ownership or control to the extent contemplated by the Plan, and shall forever be barred and enjoined from asserting such objection against the Debtors, the Reorganized Debtors, or CEC Holdings, as applicable, or terminating or modifying such contract or lease on account of transactions contemplated by the Plan, and (ii) shall be forever barred, estopped, and enjoined from challenging the validity of such assumption thereafter. Further, Section 8.2 of the Amended Plan provides that any Claim, other than Administrative Expense Claims (subject to the Administrative Expense Claims Bar Date), filed with respect to an executory contract or unexpired lease that has been assumed or assumed and assigned shall be deemed Disallowed and expunged, without further notice to or action, order, or approval of the Bankruptcy Court or any other Entity, upon the assumption of such executory contract or unexpired lease.
29. Section 8.2 of the Amended Plan also provides that the Bankruptcy Court will determine any Assumption Dispute (as defined in the Amended Plan) by entry of an order;
provided, however, that the Debtors and the Reorganized Debtors (as defined in the Amended Plan) may settle any Assumption Dispute without any further notice to any other party or any action, order, or approval of the Bankruptcy Court; provided, further, however, that where an Assumption Dispute relates solely to the applicable Cure Amount, the Debtors may assume the applicable executory contract or unexpired lease prior to the resolution of such Assumption Dispute. Moreover, Section 8.2 of the Amended Plan provides that if there is an Assumption Dispute, the Debtors and the Reorganized Debtors reserve the right to reject or nullify the assumption or assignment of the applicable executory contract or unexpired lease no later than thirty (30) days after an order of the Bankruptcy Court resolving such Assumption Dispute becomes a Final Order.
18 30. Section 8.3 of the Amended Plan provides that a counterparty to a contract or lease that is identified on the Schedule of Rejected Contracts must file a proof of Claim with the Claims Agent no later than thirty (30) days after the later of (i) the Effective Date or (ii) the effective date of rejection of such rejection of such executory contract or unexpired lease if occurring after the Effective Date.
31. For the sake of clarity, counterparties to executory contracts and unexpired leases who have filed an objection to Cure Amounts prior entry of the Disclosure Statement Order may, but are not required to, file another one. Additionally, pursuant to Sections 8.1 and 8.2 of the Amended Plan, the Cure Notice will contain proposed Cure Amounts for all executory contracts and unexpired leases with non-zero Cure Amounts, but the Debtors will only assume executory contracts and unexpired leases that are not listed on the Schedule of Rejected Contracts.
Moreover, the Debtors intend to include all executory contracts and unexpired leases on the Cure Notice, including those with a zero dollar ($0) proposed Cure Amount. However, any executory contract or unexpired lease not included in the Cure Notice shall be deemed to have a proposed Cure Amount of zero dollars ($0) in accordance with Section 8.2 of the Amended Plan.
32. The Debtors respectfully submit that procedures for the assumption, rejection, or assumption and assignment of executory contracts and unexpired leases is appropriate under the circumstances.
NOTICE
33. Notice of this Supplement will be provided to (i) the Debtors c/o CEC Entertainment, Inc., 1707 Market Place Boulevard, Suite 200, Irving, Texas 75063 (Attn: Rodolfo Rodríguez Jr., Esq. ([email protected])); (ii) the Office of the United States
19 Trustee for the Southern District of Texas, 515 Rusk Street, Suite 3516, Houston, Texas 77002 (Attn: Hector Duran and Stephen Statham ([email protected], [email protected]); (iii) counsel for the Creditors’ Committee, Kelley Drye & Warren LLP, 101 Park Avenue, New York, New York 10178 (Attn: Jason Adams, Esq.
([email protected]), and Lauren Schlussel, Esq. ([email protected])), and Womble Bond Dickinson (US) LLP, 811 Main Street, Suite 3130, Houston, Texas 77002 (Attn:
Matthew Ward, Esq. ([email protected]), and Todd Atkinson, Esq.
([email protected])); (iv) counsel to the Consenting Creditors (as defined in the Plan), Akin Gump Strauss Hauer & Feld LLP, Bank of America Tower, One
Bryant Park, New York, New York 10036 (Attn: Jason P. Rubin, Esq. ([email protected]), Daniel I. Fisher, Esq. ([email protected]), and Phillip C. Dublin, Esq.
([email protected])); (v) the Office of the United States Attorney, 1000 Louisiana Street, Suite 2300, Houston, Texas 77002; (vi) the Securities and Exchange Commission, 100 F Street, NE, Washington, D.C. 20549; (vii) the Internal Revenue Service, P.O. Box 7346, Philadelphia, Pennsylvania 19101-7346; (viii) the registered and beneficial holders of Interests (as defined in the Amended Plan) in the Debtors; (ix) any other known holders of Claims against and equity interests in the Debtors; (x) any known counterparties to the Debtors’ executory contracts or unexpired leases; (xi) any known parties to pending litigation with the Debtors; and (xii) and all parties who have requested notice in these chapter 11 cases pursuant to Bankruptcy Rule 2002.
[Remainder of Page Intentionally Left Blank]
20 WHEREFORE, the Debtors respectfully request that the Court grant the relief requested herein and such other and further relief as it deems just and proper.
Dated: October 29, 2020
Houston, Texas /s/ Alfredo R. Pérez
WEIL, GOTSHAL & MANGES LLP Alfredo R. Pérez (15776275)
Clifford W. Carlson (24090024) 700 Louisiana Street, Suite 1700 Houston, Texas 77002
Telephone: (713) 546-5000 Facsimile: (713) 224-9511 Email: [email protected]
[email protected] – and –
WEIL, GOTSHAL & MANGES LLP Matthew S. Barr (admitted pro hac vice) Ryan Preston Dahl (admitted pro hac vice) Scott R. Bowling (admitted pro hac vice) 767 Fifth Avenue
New York, New York 10153 Telephone: (212) 310-8000 Facsimile: (212) 310-8007 Email: [email protected]
[email protected] [email protected]
Attorneys for Debtors and Debtors in Possession
Certificate of Service
I hereby certify that on October 29, 2020, a true and correct copy of the foregoing document was served by the Electronic Case Filing System for the United States Bankruptcy Court for the Southern District of Texas, and will be served as set forth in the Affidavit of Service to be filed by the Debtors’ proposed claims, noticing, and solicitation agent.
/s/ Alfredo R. Pérez Alfredo R. Pérez
1 IN THE UNITED STATES BANKRUPTCY COURT
FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION
In re: § Chapter 11
§ CEC ENTERTAINMENT, INC., et al., § Case No. 20-33163 (MI)
§ Debtors.1 § (Jointly Administered)
§ ORDER (I) APPROVING DISCLOSURE STATEMENT AND FORM AND
MANNER OF NOTICE OF DISCLOSURE STATEMENT HEARING, (II) ESTABLISHING SOLICITATION AND VOTING PROCEDURES, (III) SCHEDULING CONFIRMATION HEARING, (IV) ESTABLISHING
NOTICE AND OBJECTION PROCEDURES FOR CONFIRMATION OF THE PROPOSED PLAN, (V) APPROVING NOTICE AND OBJECTION PROCEDURES FOR THE ASSUMPTION, REJECTION AND ASSUMPTION AND ASSIGNMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES, AND
(VI) GRANTING RELATED RELIEF
Upon the Motion, dated September 25, 2020 (the “Motion”), and the Supplement to the Motion, dated October 29, 2020 (the “Supplement”),2 of CEC Entertainment, Inc. and its above-captioned debtor affiliates, as debtors and debtors in possession (collectively, the “Debtors”
or the “Company”), for an order pursuant to sections 365, 1125, 1126, 1128, and 105 of title 11 of the United States Code (the “Bankruptcy Code”), Rules 2002, 3001, 3003, 3016, 3017, 3018, 3020, and 9006 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), Rules
1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, as applicable, are BHC Acquisition Corporation (0947); CEC Entertainment Concepts, L.P. (3011);
CEC Entertainment Holdings, LLC (9147); CEC Entertainment, Inc. (5805); CEC Entertainment International, LLC (8177); CEC Entertainment Leasing Company (4517); CEC Leaseholder, LLC (N/A); CEC Leaseholder #2, LLC (N/A); Hospitality Distribution Incorporated (5502); Peter Piper Holdings, Inc. (6453); Peter Piper, Inc. (3407);
Peter Piper Texas, LLC (6904); Peter Piper Mexico, LLC (1883); Queso Holdings Inc. (1569); SB Hospitality Corporation (4736); SPT Distribution Company, Inc. (8656); and Texas PP Beverage, Inc. (6895). The Debtors’
corporate headquarters and service address is 1707 Market Place Boulevard #200, Irving, TX 75063.
2 Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Motion and Supplement, as applicable.
2 2002-1 and 3016-1 of the Local Bankruptcy Rules of the United States Bankruptcy Court for the Southern District of Texas (the “Local Rules”), and the Procedures for Complex Chapter 11 Cases in the Southern District of Texas (effective as of August 7, 2020, the “Complex Chapter 11 Procedures”):
i. approving the proposed Amended Disclosure Statement for Amended Joint Chapter 11 Plan of CEC Entertainment, Inc. and Its Debtor Affiliates (the “Disclosure Statement”) as containing adequate information pursuant to section 1125 of the Bankruptcy Code; 3
ii. scheduling a hearing (the “Confirmation Hearing”) to consider confirmation of the proposed Amended Joint Chapter 11 Plan of CEC Entertainment, Inc. and Its Debtor Affiliates (the “Amended Plan”);
iii. approving the below described solicitation procedures for the Amended Plan;
iv. approving the below described confirmation procedures for the Amended Plan;
v. approving the notice and objection procedures for the assumption of executory contracts and unexpired leases; and
vi. granting related relief.
all as more fully described in the Motion and Supplement; and the Bankruptcy Court having jurisdiction to consider the Motion and the relief requested therein in accordance with 28 U.S.C.
§§ 157 and 1334; and consideration of the Motion and the relief requested therein being a core proceeding pursuant to 28 U.S.C. § 157(b); and venue being proper before this Bankruptcy Court pursuant to 28 U.S.C. §§ 1408 and 1409; and due and proper notice of the Motion and Supplement having been provided to (i) the Debtors c/o CEC Entertainment, Inc., 1707 Market Place
3 Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Disclosure Statement.
3 Boulevard, Suite 200, Irving, Texas 75063 (Attn: Rodolfo Rodríguez Jr., Esq.
([email protected])); (ii) the Office of the United States Trustee for the Southern District of Texas, 515 Rusk Street, Suite 3516, Houston, Texas 77002 (Attn: Hector Duran and Stephen Statham ([email protected], [email protected]); (iii) counsel for the Creditors’ Committee, Kelley Drye & Warren LLP, 101 Park Avenue, New York, New York 10178 (Attn: Jason Adams, Esq. ([email protected]), and Lauren Schlussel, Esq.
([email protected])), and Womble Bond Dickinson (US) LLP, 811 Main Street, Suite 3130, Houston, Texas 77002 (Attn: Matthew Ward, Esq. ([email protected]), and Todd Atkinson, Esq. ([email protected])); (iv) counsel to the Consenting Creditors (as defined in the Plan), Akin Gump Strauss Hauer & Feld LLP, Bank of America Tower, One Bryant Park, New York, New York 10036 (Attn: Jason P. Rubin, Esq. ([email protected]), Daniel I. Fisher, Esq. ([email protected]), and Phillip C. Dublin, Esq. ([email protected]));
(v) the Office of the United States Attorney, 1000 Louisiana Street, Suite 2300, Houston, Texas 77002; (vi) the Securities and Exchange Commission, 100 F Street, NE, Washington, D.C. 20549;
(vii) the Internal Revenue Service, P.O. Box 7346, Philadelphia, Pennsylvania 19101-7346;
(viii) the registered and beneficial holders of Interests (as defined in the Amended Plan) in the Debtors; (ix) any other known holders of Claims against and equity interests in the Debtors;
(x) any known counterparties to the Debtors’ executory contracts or unexpired leases; (xi) any known parties to pending litigation with the Debtors; and (xii) and all parties who have requested notice in these chapter 11 cases pursuant to Bankruptcy Rule 2002 (collectively, the “Notice Parties”); and it appearing that no other or further notice need be provided; and a hearing having been held to consider the relief requested in the Motion (the “Disclosure Statement Hearing”);
4 and upon the appearances of all interested parties having been noted in the record of the Disclosure Statement Hearing; and all objections, if any, to the Motion having been withdrawn, resolved, or overruled; and upon the record of the Disclosure Statement Hearing and all of the proceedings had before the Bankruptcy Court; and the Bankruptcy Court having found and determined that the relief sought in the Motion is in the best interests of the Debtors, their estates and creditors, and all parties in interest and that the legal and factual bases set forth in the Motion establish just cause for the relief granted herein; and after due deliberation and sufficient cause appearing therefor,
IT IS FOUND AND DETERMINED THAT:
Notice of the Disclosure Statement Hearing and Disclosure Statement Objection Deadline
1. The procedures described in the Motion pursuant to which the Debtors provided notice to parties of the time, date, and place of the Disclosure Statement Hearing and the Disclosure Statement Objection Deadline, including the form and content of the Disclosure Statement Notice, provided due, proper, and adequate notice, comport with due process, and comply with Bankruptcy Rules 2002 and 3017 and Local Rules 2002-1. No further notice is required.
2. The following dates and deadlines are hereby established (subject to modifications as necessary) with respect to the Disclosure Statement, solicitation of the Amended Plan, voting on the Amended Plan, and confirmation of the Amended Plan:
Event Deadline
Disclosure Statement Objection Deadline (extended from the original objection deadline of October 23, 2020)
Monday, November 2, 2020
Disclosure Statement Hearing Wednesday, November 4, 2020 at 12:00 p.m.
(prevailing Central Time)
5
Event Deadline
Voting Record Date Wednesday, November 4, 2020 Mailing Deadline for Confirmation
Hearing Notice
Three (3) Business Days after entry of Disclosure Statement Order
Mailing Deadline for Cure Amounts and Filing of Cure Notice
Three (3) Business Days after entry of Disclosure Statement Order
Solicitation Date Three (3) Business Days after entry of Disclosure Statement Order
Purchase Transaction Election Date Three (3) Business Days prior to Plan Supplement Filing Deadline
Request for Estimation Deadline Monday, November 30, 2020 Plan Supplement Filing Deadline Tuesday, December 1, 2020
Rule 3018(a) Motion Deadline Wednesday, December 2, 2020 at 4:00 p.m.
(prevailing Central Time)
Voting Deadline Tuesday, December 8, 2020 at 4:00 p.m.
(prevailing Central Time)
Plan Objection Deadline Tuesday, December 8, 2020 at 4:00 p.m.
(prevailing Central Time)
Assumption and Cure Objection Deadline Tuesday, December 8, 2020 at 4:00 p.m.
(prevailing Central Time) Ballot Certification Deadline Friday, December 11, 2020 Deadline to File Confirmation Brief and
Reply to Plan Objections Sunday, December 13, 2020
Confirmation Hearing [Tuesday, December 15, 2020 at [●] [a.m./p.m.]
(prevailing Central Time)]
The Disclosure Statement
3. The Disclosure Statement contains adequate information within the meaning of section 1125 of the Bankruptcy Code and complies with Bankruptcy Rule 3016(c).
No further information is necessary.
Balloting and Voting Procedures
4. The procedures set forth in the Motion for the solicitation and tabulation of votes to accept or reject the Plan provide for a fair and equitable voting process and are consistent with section 1126 of the Bankruptcy Code and Bankruptcy Rules 3017 and 3018.
6 Ballots
5. The ballots substantially in the forms annexed hereto as Exhibits 2, 3, 4, and 5 (collectively, the “Ballots”), including all voting instructions provided therein, are consistent with Official Bankruptcy Form No. B 314, address the particular needs of these chapter 11 cases, and provide adequate information and instructions for each party entitled to vote to accept or reject the Amended Plan. No further information or instructions are necessary.
Parties Entitled to Vote
6. Pursuant to the Amended Plan, holders of Claims in Class 3 (First Lien Debt Claims), Class 4 (Senior Unsecured Notes Claims), and Class 5 (General Unsecured Claims) are impaired and are entitled to receive distributions under the Amended Plan. Accordingly, holders of Allowed Claims in such Classes are entitled to vote on account of such Claims (to the extent set forth herein).
Parties Not Entitled to Vote
7. Pursuant to the Amended Plan, holders of Claims and Interests in Class 1 (Other Secured Claims), Class 2 (Other Priority Claims), Class 6 (Intercompany Claims), and Class 9 (Intercompany Interests) are Unimpaired and, accordingly, pursuant to section 1126(f) of the Bankruptcy Code, are conclusively presumed to accept the Plan and are not entitled to vote on account of such Claims and Interests.
8. Pursuant to the Amended Plan, holders of Claims and Interests in Class 7 (Subordinated Claims) and Class 8 (Existing Queso Interests) are Impaired. Holders of Subordinated Claims and of Existing Queso Interests will receive no recovery under the Amended Plan. Accordingly, pursuant to section 1126(g) of the Bankruptcy Code, the Holders of
7 Subordinated Claims and of Existing Queso Interests are conclusively presumed to reject the Amended Plan and are not entitled to vote on account of such Claims and Interests.
Notice of Non-Voting Status
9. The Notice of Non-Voting Status, substantially in the form attached hereto as Exhibit 6, complies with the Bankruptcy Code, applicable Bankruptcy Rules, and applicable Local Rules and Complex Chapter 11 Procedures and, together with the Confirmation Hearing Notice, provides adequate notice to holders of Claims or Interests in Class 1 (Other Secured Claims), Class 2 (Other Priority Claims), Class 6 (Intercompany Claims), Class 7 (Subordinated Claims), Class 8 (Existing Queso Interests), and Class 9 (Intercompany Interests). No further notice is necessary.
Solicitation
10. The proposed distribution and contents of the Solicitation Packages comply with Bankruptcy Rules 2002 and 3017 and constitute sufficient notice to all interested parties of the Record Date, Voting Deadline, Plan Objection Deadline, Confirmation Hearing, and other related matters.
11. The period proposed by the Debtors in the Motion during which the Debtors will solicit votes to accept the Amended Plan is a reasonable and sufficient period of time for holders of Claims in the Voting Classes to make an informed decision regarding whether to accept or reject the Amended Plan and timely return Ballots evidencing such decision.
12. The procedures set forth in the Motion for tabulating Ballots are fair and appropriate.
8 Notice of Confirmation Hearing and Plan Objection Deadline
13. The procedures set forth in the Motion regarding notice to all parties of the Confirmation Hearing and the Plan Objection Deadline, including the form and content of the Confirmation Hearing Notice, provide due, proper, and adequate notice, comport with due process and comply with Bankruptcy Rules 2002, 3017, and 3020. No further notice is required.
Approval of Notice and Objection Procedures for the Assumption, Rejection, and Assumption and Assignment of Executory Contracts and Unexpired Leases
14. The notice and objection procedures set forth in the Motion and Supplement regarding the assumption, rejection, and assumption and assignment of the applicable Debtors’
executory contracts and unexpired leases, including the form and content of the Confirmation Hearing Notice, provide due, proper, and adequate notice, comport with due process and comply with Bankruptcy Rules 2002, 3017 and 3020. No further notice is required.
15. All other notices to be provided pursuant to the procedures set forth in the Motion are good and sufficient notice to all parties in interest of all matters pertinent hereto and of all matters pertinent to the Confirmation Hearing. No further notice is required.
16. The legal and factual bases set forth in the Motion establish just and sufficient cause to grant the relief requested therein.
IT IS HEREBY ORDERED THAT:
17. The Disclosure Statement contains adequate information in accordance with section 1125 of the Bankruptcy Code and is APPROVED.
18. The Disclosure Statement (including all applicable exhibits thereto) provides sufficient notice of the proposed injunction, exculpation, and release provisions contained
9 in Sections 10.5, 10.6, 10.7, 10.8, and 10.9 of the Amended Plan, in accordance with Bankruptcy Rule 3016(c).
19. The form and manner of service of the Disclosure Statement Notice complies with all applicable Bankruptcy Rules and Local Rules and no further notice is necessary.
20. All objections, if any, to the Disclosure Statement, the Motion, or any of the procedures or exhibits referenced therein that have not been withdrawn or resolved as provided for in the record of the Disclosure Statement Hearing are overruled.
Creditors’ Committee Settlement
21. The Amended Plan incorporates the terms of a settlement with the Creditors’ Committee regarding the treatment of holders of General Unsecured Claims which resolves the Committee’s potential challenge rights under the DIP Order, as more fully set forth in the Disclosure Statement. In order to implement the Creditors’ Committee Settlement through the Amended Plan, the deadline for the Creditors’ Committee to commence a challenge with respect to the Committee Investigation Matters, shall be tolled until the entry of the Confirmation Order.4
22. If, for any reason, the Bankruptcy Court does not enter the Confirmation Order incorporating the terms of the Creditors’ Committee Settlement (unless otherwise extended by agreement of the Creditors’ Committee, the Debtors, and the Consenting Creditors): (i) the Creditors’ Committee Settlement shall be deemed terminated and the parties shall return to the positions they each held immediately prior to the entry into the Creditors’ Committee Settlement,
4 Committee Investigation Matters shall have the meaning ascribed to such term in the Order (I) Authorizing the Debtors to (A) Obtain Postpetition Financing, (B) Grant Senior Secured Liens and Superpriority Administrative Expense Claims, and (C) Utilize Cash Collateral; (II) Granting Adequate Protection to the Prepetition Secured Parties; and (III) Granting Related Relief [Docket No. 1118] (the “DIP Order”).
10 and (ii) the Creditors’ Committee shall have five (5) Business Days to commence a challenge with respect to Committee Investigation Matters.
Solicitation Procedures Parties Entitled to Vote
23. Pursuant to the Amended Plan, the following classes are Impaired but entitled to receive distributions under the Amended Plan and, thus, may vote to accept or reject the Amended Plan, subject to certain exceptions discussed below (collectively, the “Voting Classes”):
Voting Classes
Class Description
Class 3 First Lien Debt Claims
Class 4 Senior Unsecured Notes Claims Class 5 General Unsecured Claims
24. A creditor that holds a Claim in a Voting Class is nonetheless not entitled to vote to the extent that:
(a) as of the Voting Record Date (as defined below), the outstanding amount of such creditor’s Claim is zero ($0.00);
(b) as of the Voting Record Date, such creditor’s Claim has been disallowed, expunged, disqualified or suspended;
(c) such creditor has not filed a proof of claim in accordance with the Order (I) Establishing Deadline to File Proofs of Claim and (II) Approving Form and Manner of Notice Thereof (Docket No. 747) (the “Bar Date Order”)5 as of the Voting Record Date and the Debtors have not scheduled such creditor’s Claim or scheduled such creditor’s claim in an undetermined amount or as contingent, unliquidated, or disputed; or
5 Pursuant to the Bar Date Order, the deadline for creditors or other parties to file a proof of claim was October 1, 2020 at 5:00 p.m. (prevailing Central Time). The deadline for governmental units to file a proof of claim is December 22, 2020 at 5:00 p.m. (prevailing Central Time).
11 (d) such creditor’s Claim is subject to an objection or request for estimation as
of the Voting Record Date, subject to the procedures set forth below.
25. Pursuant to the Amended Plan, the Unimpaired Classes are conclusively presumed to accept the Amended Plan and, accordingly, are not entitled to vote on the Amended Plan.
26. Holders of Subordinated Claims and of Existing Queso Interests will receive no recovery under the Amended Plan. Such holders are deemed to reject the Amended Plan and are not entitled to vote on the Amended Plan.
27. Holders of Claims or Interests in the following classes constitute the Non- Voting Classes:
Non-Voting Classes
Class Description Impairment Acceptance / Rejection Class 1 Other Secured Claims Unimpaired Presumed to Accept Class 2 Other Priority Claims Unimpaired Presumed to Accept Class 6 Intercompany Claims Unimpaired Presumed to Accept Class 7 Subordinated Claims Impaired Deemed to Reject Class 8 Existing Queso Interests Impaired Deemed to Reject Class 9 Intercompany Interests Unimpaired Deemed to Accept
The Voting Record Date
28. The Voting Record Date shall be set as November 4, 2020. Only holders of Claims in Class 3 (First Lien Debt Claims); Class 4 (Senior Unsecured Notes Claims); and Class
12 5 (General Unsecured Claims), as of the Voting Record Date, who are otherwise eligible to vote shall be entitled to vote to accept or reject the Amended Plan.
29. The record holders of Claims shall be determined, as of the Voting Record Date, based upon the records of the Debtors and the Voting Agent. Accordingly, any notice of claim transfer received by the record holder of the Debtors’ debt securities, the Debtors, the Voting Agent, or other similarly situated registrar after the Voting Record Date shall not be recognized for purposes of voting or receipt of the Amended Plan confirmation materials.
30. With respect to transfers of Claims filed pursuant to Bankruptcy Rule 3001(e), the transferee shall be entitled to receive a Solicitation Package and, if the holder of such Claim is otherwise entitled to vote with respect to the Amended Plan, cast a Ballot on account of such Claim only if: (i) all actions necessary to transfer such Claim are completed by the Voting Record Date or (ii) the transferee files by the Voting Record Date (a) all documentation required by Bankruptcy Rule 3001(e) to evidence the transfer and (b) a sworn statement of the transferor supporting the validity of the transfer. In the event a Claim is transferred after the Voting Record Date, the transferee of such Claim shall be bound by any vote or election on the Amended Plan made by the holder of such Claim as of the Voting Record Date.
Temporary Allowance / Disallowance of Claims
31. First Lien Debt Claims. The amount of each First Lien Debt Claim for voting purposes only will be established by reference to the list of participant lenders to the First Lien Credit Agreement and those participant lenders’ corresponding First Lien Debt Claim amounts as of the Voting Record Date as reflected on the loan register maintained by the First Lien
13 Administrative Agent, which shall be provided by the First Lien Administrative Agent to the Solicitation Agent no later than one (1) Business Day following the Voting Record Date.
32. Senior Unsecured Notes Claims. The amount of each Senior Unsecured Notes Claim, for voting purposes only, shall be established by reference to the books and records of the Senior Unsecured Notes Trustee and the record listings at The Depository Trust Company (“DTC”) as of the Voting Record Date, which shall be provided by the Senior Unsecured Notes Trustee to the Solicitation Agent no later than one (1) Business Day following the Voting Record Date.
33. General Unsecured Claims (Other than Senior Unsecured Notes Claims). The amount of each General Unsecured Claim (other than Senior Unsecured Notes Claims), for voting purposes only, shall be established pursuant to the following hierarchy:
(a) If a Claim has been estimated or otherwise Allowed for voting purposes by order of this Bankruptcy Court, such Claim is temporarily Allowed in the amount so estimated or Allowed by this Bankruptcy Court;
(b) If (a) does not apply, but the Claim has been estimated or otherwise Allowed for voting purposes pursuant to a stipulation, settlement, or other agreement reached between the Debtors and the holder of the Claim, in consultation with the Creditors’ Committee (whether such stipulation, settlement, or agreement is filed or not), such Claim is temporarily Allowed in the amount set forth in the stipulation, settlement, or other agreement;
(c) If neither (a) nor (b) applies, then in the liquidated, non-contingent, and undisputed amount set forth on a proof of claim timely filed in accordance with the Bar Date Order as of the Voting Record Date, provided that if the amount set forth on a timely-submitted proof of claim is wholly unliquidated, contingent, and/or disputed, then the Claim shall be temporarily allowed for voting purposes in the amount of $1.00; and
(d) If neither (a), (b), nor (c) apply, then in the liquidated, non-contingent, and undisputed amount set forth on the Debtors’ Schedules, provided that if the Claim appearing on the Debtors’ Schedules is unliquidated, contingent, disputed, or in a $0.00 amount, then the Claim shall be disallowed for voting purposes.
14 34. If the Debtors have filed an objection to, or a request for estimation of, a Claim on or before November 30, 2020 (the “Request for Estimation Deadline”), such Claim shall be temporarily disallowed for voting purposes, except as ordered by the Bankruptcy Court before the Voting Deadline (as defined herein); provided, however, that, if the Debtors’ objection seeks only to reclassify or reduce the Allowed amount of such Claim, then such Claim is temporarily Allowed for voting purposes in the reduced amount and/or as reclassified (as applicable), except as may be ordered by this Bankruptcy Court prior to or concurrent with entry of an order confirming the Amended Plan.
35. If any creditor seeks to challenge the allowance of its Claim for voting purposes, such creditor shall file with this Bankruptcy Court a motion for an order pursuant to Bankruptcy Rule 3018(a) temporarily allowing such Claim for voting purposes in a different amount (a “Rule 3018(a) Motion”). Any Rule 3018(a) Motion must be filed with the Bankruptcy Court and served on the Notice Parties so as to be actually received not later than December 2, 2020 at 4:00 p.m. (prevailing Central Time).
36. Upon the filing of any such Rule 3018(a) Motion, such creditor’s Ballot shall be counted in accordance with the above-designated guidelines, unless temporarily Allowed in a different amount by an order of this Bankruptcy Court entered prior to or concurrent with entry of an order confirming the Amended Plan.
Solicitation Packages
37. The Solicitation Packages are APPROVED.
38. The Debtors shall mail the Solicitation Packages no later than three (3) Business Days following the date of entry of the this Order (the “Solicitation Date”) to (i) the U.S.
15 Trustee (which Solicitation Package shall exclude a Ballot), (ii) holders of Claims in Voting Classes entitled to vote on the Amended Plan as of the Voting Record Date, and (iii) holders of Claims and Interests in Class 1 (Other Secured Claims), Class 2 (Other Priority Claims), Class 7 (Subordinated Claims) and Class 8 (Existing Queso Interests) as of the Voting Record Date (which Solicitation Package shall exclude a Ballot), as required by Bankruptcy Rule 3017(d).
39. Solicitation Packages shall contain copies of:
(a) the Disclosure Statement Order, as entered by the Bankruptcy Court and without attachments;
(b) the Notice of (I) Approval of Disclosure Statement, (II) Establishment of Voting Record Date, (III) Hearing on Confirmation of the Plan, (IV) Procedures for Objecting to the Confirmation of the Plan, (V) Cure Procedures, and (VI) Procedures and Deadline for Voting on the Plan (the “Confirmation Hearing Notice”);
(c) a CD-ROM or USB flash drive containing the Disclosure Statement, which shall include the Amended Plan as an attachment (except as provided below);
(d) if the recipient is entitled to vote on the Amended Plan (as set forth herein), a Ballot (as defined below) customized for such holder and conforming to Official Bankruptcy Form No. B 314, in the form described below, and a postage-prepaid return envelope;6 and
(e) if the recipient is a holder of a Class 5 General Unsecured Claim, a copy of the Creditors’ Committee letter in support of the Amended Plan.
40. If the recipient is a holder of a Claim or Interest in a Non-Voting Class and, therefore, not entitled to vote on the Amended Plan (as set forth herein), then they will be served the Confirmation Hearing Notice and the applicable Notice of Non-Voting Status (as defined and described herein).
6 Official Bankruptcy Form No. B 314 can be found at http://www.uscourts.gov/forms/bankruptcy-forms, the official website for the United States Bankruptcy Courts.
16 41. Any creditor for which service by CD-ROM or USB poses a hardship may request an additional copy of the Disclosure Statement (and attachments) in paper format by contacting Prime Clerk by email at [email protected], or by telephone at (877) 930-4313 (Toll-Free) or (347) 899-4582 (if calling from outside the U.S.). Upon receipt of such request, the Debtors will provide such creditor with a paper copy of the Amended Plan and the Disclosure Statement at no cost to the creditor within five (5) days thereafter. Alternatively, holders in Class 3 (First Lien Debt Claims) and Class 5 (General Unsecured Claims) may submit their Ballots via Prime Clerk’s online E-Balloting Portal by visiting https://cases.primeclerk.com/cecentertainment/Home-Index, clicking on the “Submit E-Ballot”
section of the website, and following the instructions set forth on the E-Ballot. Nominees in Class 4 (Senior Unsecured Note Claims) may submit ballots via email to [email protected].
42. The Debtors shall not be required to send Solicitation Packages to creditors that have Claims that have already been paid in full; provided, however, that if any such creditor would be entitled to receive a Solicitation Package for any other reason, then the Debtors shall send such creditor a Solicitation Package in accordance with the procedures set forth herein.
43. With respect to addresses from which Solicitation Packages are returned as undeliverable by the United States Postal Service, the Debtors are excused from mailing Solicitation Packages or any other materials related to voting or confirmation of the Amended Plan to those entities listed at such addresses unless the Debtors are provided with accurate addresses for such entities before the Voting Deadline, and failure to mail Solicitation Packages or any other materials related to voting or confirmation of the Amended Plan to such entities will not constitute
