672 B.R. 53
Bankr. S.D. Florida2025Background
- Cinemex Holdings USA, CMX Cinemas, and CB Theater Experience LLC (the “Debtors”) filed for Subchapter V bankruptcy on June 30, 2025, citing economic difficulties from the COVID-19 pandemic and ongoing business challenges.
- The Debtors operate 28 leased movie theaters across eight states with approximately $1.9 million in unsecured debt and a $50 million secured claim to their parent company, Wine & Roses.
- MN Theaters 2006 LLC ("MN Theaters"), an unsecured creditor, moved for appointment of an official committee of unsecured creditors, asserting unsecured creditors lack adequate representation and questioning the validity of the $50 million secured claim.
- The Debtors opposed, arguing Subchapter V provides a trustee for oversight, no evidence supported eligibility challenges, and investigation into the insider debt could proceed without a committee.
- The Court previously denied MN Theaters' motion without prejudice from the bench and issued this written memorandum opinion.
- The central legal issue was whether there was "cause" under 11 U.S.C. §§ 1102(a)(3) and 1181(b) to appoint a creditors' committee or expand the Subchapter V trustee's role.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a creditors’ committee should be appointed | Strong cause exists (eligibility, lack of creditor voice, need to investigate insider debt) | No cause shown; trustee suffices; no evidence of eligibility or need; can investigate without committee | Motion denied; no sufficient cause shown |
| Whether eligibility questions justify a committee | Debtors may not qualify for Subchapter V; committee could investigate | No evidence supports eligibility issues; deadline to object not yet expired | No cause; eligibility challenge premature |
| Need for a unified voice for unsecured creditors | Creditors are unrepresented without committee | Subchapter V trustee provides equivalent representation; creditors are mostly landlords/vendors | No cause; not enough creditors or complexity |
| Need to investigate insider $50M secured claim | Committee needed to challenge and investigate possible recharacterization | Trustee can and will investigate; plan not yet filed; parties retain right to object or investigate | No cause; trustee's powers sufficient |
Key Cases Cited
- In re Seven Stars on the Hudson Corp., 618 B.R. 333 (Bankr. S.D. Fla. 2020) (explaining the streamlined process and creditor protections under Subchapter V)
- In re Bonert, 619 B.R. 248 (Bankr. C.D. Cal. 2020) (discussing what may constitute "cause" for a creditors' committee in Subchapter V)
- In re Peak Serum, Inc., 623 B.R. 609 (Bankr. D. Colo. 2020) (Subchapter V has protections for creditors including an automatic trustee)
- In re Corinthian Communications, Inc., 642 B.R. 224 (Bankr. S.D.N.Y. 2022) (explaining the standard for expanding the Subchapter V trustee’s authority)