iPic committee opposes sale, asks court to tap Cinemex winning bidder

By Caroline Salls

Pittsburgh, Oct. 25 – iPic-Gold Class Entertainment, LLC’s official committee of unsecured creditors objected to approval of the proposed sale of the company’s assets, according to a filing with the U.S. Bankruptcy Court for the District of Delaware.

The committee said the participants in the Oct. 17 auction were the senior secured lender and insider with which iPic entered its restructuring support agreement, and Cinemex, a strategic bidder with successful theater operations in Mexico and the United States.

The committee said Cinemex committed to take eight of iPic’s 16 open theater locations, associated transferable liquor licenses, six of nine leases under development or construction and opportunities in Saudi Arabia.

Meanwhile, the committee said the lender’s counter-offer proposed to take the unencumbered transferable liquor licenses, “but intentionally failed to commit to take any of the unencumbered leases, which only would have value if purchased as part of a larger transaction involving new iPic locations.”

“The RSA bid in this way to ensure that the unsecured creditors would be left holding the bag at the conclusion of the sale, fully understanding the risk of doing so based on statements made on the record at the auction by the committee that it would be supporting the bid of Cinemex based on the way RSA structured its bid,” the objection said.

Since the lender is an insider to the iPic debtors, the committee said the company’s decision to sell to it must be examined under heightened scrutiny.

Even if this were not the case, the creditor group said “the Cinemex bid would still be the best bid,” as it would result in a higher return of unencumbered cash to the estate for payment of claims.

As a result, the committee said the court should deem Cinemex’s final offer the highest and best bid for the iPic assets.

As previously reported, iPic announced on Oct. 18 that the winning $50.85 million credit bid was submitted by iPic Theaters, LLC, a manager-managed limited liability company owned by the Teachers’ Retirement System of Alabama and the Employees’ Retirement System of Alabama. Cinemex is the back-up bidder, with a $48.8 million final offer.

The sale hearing is scheduled for Oct. 28.

iPic is a Boca Raton, Fla.-based luxury restaurant and theater company. The company filed bankruptcy on Aug. 5 under Chapter 11 case number 19-11739.

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