IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE ------------------------------------------------------x In re: : : MERVYNS HOLDINGS, LLC et al.

, : : Debtors. : : :
:

Chapter 11 Case No. 08-11586 (KG) Jointly Administered

Hearing Date: November 25, 2008 at 10:00 a.m. (ET)

Objection Deadline: November 21, 2008 at 4:00 p.m. (ET)

Related to Docket No. 973

------------------------------------------------------x LIMITED OBJECTION OF GENERAL GROWTH MANAGEMENT, INC., CENTRO PROPERTIES GROUP AND KIMCO REALTY CORPORATION TO THE MOTION OF DEBTORS AND DEBTORS IN POSSESSION FOR ORDERS (I) ESTABLISHING AUCTION AND BID PROCEDURES FOR SALE OF DEBTORS' INTERESTS IN THEIR REMAINING REAL PROPERTY LEASES; (II) APPROVING AND AUTHORIZING SALE OF LEASES TO WINNING BIDDERS FREE AND CLEAR OF ALL LIENS, INTERESTS, CLAIMS AND ENCUMBRANCES; AND (III) GRANTING RELATED RELIEF TO THE HONORABLE KEVIN GROSS, UNITED STATES BANKRUPTCY JUDGE: General Growth Management (GGM), Centro Properties Group (Centro) and Kimco Realty Corporation (Kimco), by and through their undersigned attorneys, hereby make this Limited Objection to the Motion of Debtors and Debtors in Possession for Orders (I) Establishing Auction and Bid Procedures for Sale of Debtors' Interests in Their Remaining Real Property Leases; (II) Approving and Authorizing Sale of Leases to Winning Bidders Free and Clear of All Liens, Interests, Claims and Encumbrances; and (III) Granting Related Relief (the Motion) [D.I. 973], and in support thereof aver as follows: 1. GGM, Centro and Kimco are the owners or agents for the owners of

various shopping centers in which Debtors operate retail stores pursuant to written leases (the Leases) which are affected by the relief sought by the Motion. GGM, Centro and Kimco are hereinafter collectively referred to as Objecting Landlords. All of Objecting Landlords

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premises are premises located in shopping centers, as that term is used in 11 U.S.C. 365(b)(3). See In Re: Joshua Slocum, Ltd., 922 F.2d 1081 (3d Cir. 1990). 2. By the Motion, Debtors seek, inter alia, approval of various bidding

procedures (the Bid Procedures), approval of the possible sale of some or all of their nonresidential real property leases and related relief. Bidding Procedures Generally 3. Although the Bid Procedures appear to be generally fair and reasonable,

Objecting Landlords do have certain concerns which they believe should be addressed by the Court if not resolved prior to the hearing on the Motion. 4. Landlords should be deemed to be Qualified Bidders for one or more of

their own leases without any further requirements except for the posting of the required deposit on the cash portion, if any, of their bids and submission of a bid letter and either an Asset Purchase Agreement or Lease Termination Agreement. Rather than submitting an Assignment Agreement (Bid Procedures as set forth in Motion at 16(v) - page 11), a landlord bidding on its own lease should be entitled to submit, in lieu thereof, a proposed Lease Termination Agreement. 5. While 16(iv) (page 11) contemplates submission of a certified check,

16 (iii) under Deposit Requirements suggests a use of a cashiers check. Parties making a deposit should be able to provide same by cashiers check, bank check, wire transfer or any other means of immediately available funds. 6. The Bid Procedures appear to contemplate that a Landlord Bid be

accompanied by a waiver of all rejection damages. No other bidder has such a requirement attached to its bid. Landlords should be entitled to bid any amount they desire (subject to 2
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Debtors setting a minimum bid for all bidders for a particular property). Debtors can certainly value the waiver of all or part of a rejection damage claim and are free to accept or reject any and all bids. Scheduling of Bidding, Auction, Objections and Hearings; Adequate Assurance Information 7. While the Bid Procedures appear to contemplate providing landlords with

a proposed assignees adequate assurance information, there are no specific requirements set forth in the Order. Adequate assurance information must be supplied to the affected landlords and their counsel no later than the earlier of one (1) business day after the conclusion of the Auction or at the time of service of the Assumption Notice as contemplated by 27 of the Motion. 8. While the Motion appears to contemplate a Sale Objection Deadline of

December 19, 2008 (see Notice of Motion), paragraph 28 of the Motion indicates the sale objections will be due ten (10) days after service of the Assumption Notice. The Bid Procedures should be clarified and should provide a minimum of seven (7) business days notice of the proposed assignee and service of adequate assurance information prior to the objection deadline. Advance Waiver of the Stay Under Bankruptcy Rules 6004(g) and 6006(d) Is Inappropriate

9.

Debtors seek an advance waiver of the ten-day stay of Rules 6004(g) and

6006(d) of the Federal Rules of Bankruptcy Procedure following entry of any orders approving the sale of property or assignment of a lease. Such an advance waiver is unjustified and inappropriate.

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10.

Rule 6006(d) provides that:

"[a]n order authorizing the trustee to assign an executory contract or unexpired lease under 365(f) is stayed until the expiration of 10 days after the entry of the order, unless the court orders otherwise." The Committee Note to Rule 6006(d) provides: "[s]ubdivision (d) is added to provide sufficient time for a party to request a stay pending appeal of an order authorizing the assignment of an executory contract or unexpired lease under 365(f) of the Code before the assignment is consummated. . . . The court may, in its discretion, order that Rule 6006(d) is not applicable so that the executory contract or unexpired lease may be assigned immediately in accordance with the order entered by the court. Alternatively, the court may order that the stay under Rule 6006(d) is for a fixed period less than 10 days." 11. The Rule 6006(d) stay provides a short period of time that "is often needed

and essential to an objecting party intending to appeal because if the assignment is closed in the absence of a stay, then any appeal by the objecting party may well be moot." Collier on Bankruptcy 6006.04, at 6006-17 (15th ed. Rev. 2004); See also In re Quanalyze Oil & Gas Corp., 250 B.R. 83, 92 (Bankr. W.D. Tex. 2000)(in reviewing a similar provision in Rule 6004(g) observing that "[a] party seeking to obtain appellate review of just such a sale should not find its efforts frustrated by a 'quick closing' that renders an appeal moot.") Collier further observes that: Reservation of Rights 12. Objecting Landlords reserve the right to make such other and further

objections as may be appropriate when a proposed assignee of one or more of their leases is identified.

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Joinder in Other Landlord Objections 13. Objecting Landlords hereby join in the objections filed by Debtors other

landlords to the extent that such objections are not inconsistent with the provisions hereof. WHEREFORE, Objecting Landlords pray for relief consistent with the foregoing Joinder and Limited Objection; and WHEREFORE, Objecting Landlords pray for such other and further relief as may be just and required under all of the circumstances. Dated: November 20, 2008 Wilmington, Delaware Respectfully submitted, /s/ Leslie C. Heilman Tobey M. Daluz, Esquire (No. 3939) Leslie Heilman, Esquire (No. 4716) BALLARD SPAHR ANDREWS & INGERSOLL, LLP 919 N. Market Street, 12th Floor Wilmington, DE 19801 Telephone: (302) 252-4465 Facsimile: (302) 252-4466 E-mail: daluzt@ballardspahr.com heilmanl@ballardspahr.com and David L. Pollack, Esquire Jeffrey Meyers, Esquire BALLARD SPAHR ANDREWS & INGERSOLL, LLP 51ST Fl - Mellon Bank Center 1735 Market Street Philadelphia, Pennsylvania 19103 Telephone: (215) 864-8325 Facsimile: (215) 864-9473 Email: pollack@ballardspahr.com meyers@ballardspahr.com Counsel for General Growth Management, Inc. Centro Properties Group and Kimco Realty Corporation

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UNITED STATES BANKRUPTCY COURT DISTRICT OF DELAWARE ------------------------------------------------------x In re: : : MERVYNS HOLDINGS, LLC et al. : : : Debtors. :
:

Chapter 11 Case No. 08-11586 (KG) Jointly Administered

------------------------------------------------------x CERTIFICATE OF SERVICE I certify that a copy of the enclosed Limited Objection of General Growth Management, Inc., Centro Properties Group and Kimco Realty Corporation to the Motion of Debtors and Debtors in Possession for Orders (I) Establishing Auction and Bid Procedures for Sale of Debtors Interests in Their Remaining Real Property Leases; (II) Approving and Authorizing Sale of Leases to Winning Bidders Free and Clear of All Liens, Interests, Claims and Encumbrances; and (III) Granting Related Relief has been served upon the following persons via email or telecopier unless otherwise noted. Mr. David Robson Mervyns Holdings, LLC 22301 Foothill Boulevard Hayward, CA 95541 FAX: 510-727-5125 Mark Collins, Esq. Daniel DeFranceschi, Esq. Richards Layton & Finger, P.A. One Rodney Square 920 North King Street Wilmington, DE 19801 FAX: 302-651-7701

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Mr. Andrew Hinkelman FTI Consulting One Front Street, Floor 16 San Francisco, CA 94111 FAX: 415-283-4277 Stuart E. Erickson Miller Buckfire & Co., LLC 153 East 53rd Street, 22nd Floor New York, NY 10022 FAX: 212-895-1862 Neil E. Herman, Esquire Morgan, Lewis & Bockius LLP 101 Park Avenue New York, NY 10178 FAX: 212-309-6001 Daniel Fiorillo, Esquire Otterbourg, Steindler, Houston & Rosen, P.C. 230 Park Avenue New York, NY 10169 FAX: 212-661-9100 Cathy Hershcopf, Esquire Cooley Godward Kronish LLP 1114 Avenue of the Americas New York, NY 10036 FAX: 212-479-6275 Mitch Kahn Hilco Real Estate, LLC One Northbrook Place 5 Revere Drive Northbrook, IL 60062 FAX: 847-714-1289 Joshua Sussberg, Esquire Kirkland & Ellis LLP 153 East 53rd Street new York, NY 10022 FAX: 212-446-6460

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Office of the U.S. Trustee 844 King Street, Suite 2207 Wilmington, DE 19801 FAX: 302-573-6497

Dated: November 20, 2008 /s/ David L. Pollack David L. Pollack, Esquire Jeffrey Meyers, Esquire BALLARD SPAHR ANDREWS & INGERSOLL, LLP 51ST Fl - Mellon Bank Center 1735 Market Street Philadelphia, Pennsylvania 19103 Telephone: (215) 864-8325 Facsimile: (215) 864-9473 Email: pollack@ballardspahr.com meyers@ballardspahr.com Counsel for General Growth Management, Inc., Centro Properties Group and Kimco Realty Corporation

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