Case CSS Doc 539 Filed 03/19/18 Page 1 of 6 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

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1 Case CSS Doc 539 Filed 03/19/18 Page 1 of 6 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: ) Chapter 11 ) CHARMING CHARLIE ) Case No (CSS) HOLDINGS INC. et al., ) (Jointly Administered) ) Debtors. 1 ) Obj. Deadline: March 19, 2018 ) Hearing Date: April 3, 2018, 10:00 a.m. ) ) Re: Dkt. Nos. 423, 493 & 517 OBJECTION BY WESTFIELD, LLC AND AFFILIATES TO PROPOSED CURE AMOUNTS WESTFIELD, LLC and its landlord affiliates listed on Schedule A hereto (collectively, the Westfield Landlords ), hereby submit this Objection (the Objection ) to the Debtors proposed cure amounts, and in support thereof, state as follows: I. BACKGOUND 1. On December 11, 2017 (the Petition Date ), the above-captioned debtors (collectively, the Debtors ) filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code (the Bankruptcy Code ) with the United States Bankruptcy Court for the District of Delaware (the Court ). 2. The Westfield Landlords are the landlords and one or more of the Debtors are the tenants pursuant to unexpired leases (collectively, the Westfield Leases ) of nonresidential real property (collectively, the Premises ) located at shopping centers around the United States. 1 The Debtors and the last four digits of their respective taxpayer identification numbers are as follows: Charming Charlie Canada LLC (0693); Charming Charlie Holdings Inc. (6139); Charming Charlie International LLC (5887); Charming Charlie LLC (0263); Charming Charlie Manhattan LLC (7408); Charming Charlie USA, Inc. (3973); Poseidon Partners CMS, Inc. (3302). The address of the Debtors service address is: 5999 Savoy Drive, Houston, Texas

2 Case CSS Doc 539 Filed 03/19/18 Page 2 of 6 3. Each of the Centers constitutes a shopping center as that term is used in 11 U.S.C. 365(b)(3). 4. Pursuant to the Third Amended Joint Chapter 11 Plan of Reorganization of Charming Charlie Holdings Inc. And Its Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code [Docket No. 517] (as amended or modified from time to time and including all exhibits and supplements thereto, the Plan ) filed in these chapter 11 cases on March 13, 2018, the Debtors seek, inter alia, to assume the Westfield Leases pursuant to the Plan. II. Adequate Assurance of Future Performance of Cure Obligations; Objection to Proposed Cure Amounts 5. In the event that the Westfield Leases are assumed, the Debtors shall be required to, among other things, cure all defaults under the Westfield Leases and compensate the Westfield Landlords for actual pecuniary loss as a result of such defaults. 11 U.S.C. 365(b). The Westfield Landlords have reached an agreement with the Debtors regarding cure amounts due under four of the five Westfield Leases (as reflected on Schedule A, the Four Cure Amounts ), which have been incorporated into signed lease amendments for those four Westfield Leases. There is a relatively small difference between the Debtor s proposed cure amount for the fifth lease and the Westfield Landlords proposed cure amount for that lease the lease with WEA Palm Desert LLC (the Palm Desert Lease ) -- as reflected on Schedule A. As of the date of the filing of this Objection, but exclusive of any amounts that may become outstanding thereafter, the proper 11 U.S.C. 365(b) cure amount for each of the Westfield Leases, including the Palm Desert Lease, is as set forth in detail on the attached Schedule A (the Cure Amounts ). 2

3 Case CSS Doc 539 Filed 03/19/18 Page 3 of 6 6. As part of the Cure Amount for the Palm Desert Lease and pursuant to the terms of the Palm Desert Lease and 11 U.S.C. 365(b), the Court should award the Westfield Landlord a reasonable amount for attorneys fees ($500) actually incurred as a result of the Debtors bankruptcy case. See, e.g., Travelers Cas. & Su. Co. of Am. v. Pacific Gas and El. Co., 127 S. Ct. 1199, 1203 (2007) (holding that a party is entitled to be reimbursed for its attorneys fees when there exists an enforceable contract allocating attorneys fees ); In re East 44 th Realty, LLC, No. 07 Civ. 8799, 2008 U.S. Dist. LEXIS 7337 (S.D.N.Y. 2008) (affirming bankruptcy court s finding that a $1.7 million settlement of attorneys fees to a landlord was reasonable); In re Beltway Medical, Inc., 358 B.R. 448, 453 (Bankr. S.D. Fla. 2006) Where the trustee or debtor-in-possession fails to perform the primary obligation under the lease (i.e. to pay rent), and the landlord incurs legal fees seeking to obtain payment, it follows that the attorney's fees, if authorized under the lease and linked to enforcement of the payment obligation, are entitled to the same administrative priority as the rent obligation ); In re Entertainment, Inc., 223 B.R. 141, (Bankr. E.D. Ill. 1998) (interest and attorneys fees must be paid as provided for in the assumed lease); In re MS Freight Distribution, Inc., 172 B.R. 976, 978 (Bankr. W.D. Wash. 1994) ( the legislative history of [section 365(d)(3)] and the language of the section itself mandate that a lessor be paid interest, late fees, and legal fees incurred in the first 60 days of the bankruptcy case ) To the extent not inconsistent herewith, the Westfield Landlords hereby join in the objections raised by other landlords. 2 If the Cure Amounts sought by the Westfield Landlords are approved by the Court, the Westfield Landlords will waive their right to interest on the unpaid rent amounts due under the Westfield Leases. 3

4 Case CSS Doc 539 Filed 03/19/18 Page 4 of 6 an order: WHEREFORE, the Westfield Landlords respectfully requests that this Court enter a. Sustaining this Objection; b. Determining that the proper 11 U.S.C. 365(b) cure amounts for the Westfield Leases are the Cure Amounts set forth in the Agreed column or Total column on Schedule A, as applicable, or otherwise approving the Cure amounts agreed to be the Westfield Landlords and the Debtors; and c. Granting the Westfield Landlords such other and further relief as the Court deems appropriate. Dated: March 19, 2018 /s/ Andrew L. Cole Andrew L. Cole (# 5712) LeClairRyan 800 North King Street, Suite 303 (302) andrew.cole@leclairryan.com and Niclas A. Ferland, Esq. Ilan Markus, Esq. LeClairRyan 545 Long Wharf Drive, 9 th Floor New Haven, CT Telephone: (203) Facsimile: (203) niclas.ferland@leclairryan.com ilan.markus@leclairryan.com Counsel to: Westfield, LLC and certain of its affiliates as set forth on the attached Schedule A 4

5 Case CSS Doc 539 Filed 03/19/18 Page 5 of 6 CERTIFICATE OF SERVICE The undersigned hereby certifies that on March 19, 2018, a copy of the foregoing Objection by Westfield, LLC and Affiliates to Proposed Cure Amounts was served via the Court s CM/ECF electronic filing system to all registered users who have entered an appearance in this case, and by first class mail, postage pre-paid and upon each of the following: Joshua A Sussberg, Esq. Aparna Yenamandra, Esq. Rebecca Blake Chaikin, Esq. Kirkland & Ellis LLP 601 Lexington Avenue New York, NY Joshua.sussberg@kirkland.com Aparna.yenamandra@kirkland.com Rebecca.chaikin@kirland.com Dominic E. Pacitti, Esq. Michael Yurkewicz, Esq. Klehr Harrison Harvey Branzburg LLP 919 N. Market Street dpacitti@klehr.com myurkewicz@klehr.com Cathy Hershcopf, Esq. Seth Van Aalten, Esq. Ian Shapiro, Esq. Michael Klein, Esq. Cooley LLP 1114 Avenue of the Americas New York, NY chershcopf@cooley.com svanaalten@cooley.com ishapiro@cooley.com mklein@cooley.com James H.M. Sprayregen, P.C. Kirkland & Ellis LLP 300 North LaSalle Street Chicago, IL james.sprayregen@kirkland.com Richard L. Schepacarter, Esq. Office of the United States Trustee U. S. Department of Justice 844 King Street, Suite 2207 Lockbox #35 richard.schepacarter@usdoj.gov Morton R. Branzburg, Esq. Klehr Harrison Harvey Branzburg LLP 1835 Market Street, Suite 1400 Philadelphia, PA mbranzburg@klehr.com Jennifer R. Hoover, Esq. Kevin M. Capuzzi, Esq. Benesch, Friedlander, Coplan & Aronoff LLP 222 Delaware Avenue, Suite jhoover@beneschlaw.com kcapuzzi@beneschlaw.com Mark D. Collins, Esq. David T. Queroli, Esq. Richards, Layton & Finger, P.A. One Rodney Square 920 North King Street collins@rlf.com queroli@rlf.com 5

6 Case CSS Doc 539 Filed 03/19/18 Page 6 of 6 David M. Fournier, Esq. Pepper Hamilton LLP Hercules Plaza, Suite N. Market Street Wilmington, DE fournierd@pepperlaw.com Julia Frost-Davies, Esq. Amelia C. Joiner, Esq. Morgan, Lewis & Bockius LLP One Federal Street Boston, MA julia.frostdavies@morganlewis.com amelia.joiner@morganlewis.com Ronald A. Hewitt, Esq. Covington & Burling LLP The New York Times Building 620 Eighth Avenue New York, NY rhewitt@cov.com Jeffrey D. Saferstein, Esq. Adam M. Denhoff, Esq. Sharad Thaper, Esq. Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas New York, NY jsaferstein@paulweiss.com adenhoff@paulweiss.com thaper@paulweiss.com /s/ Andrew L. Cole Andrew L. Cole 6

7 Case CSS Doc Filed 03/19/18 Page 1 of 1 SCHEDULE A Westfield, LLC Affiliates Tenant: Charming Charlie LLC "Cure Amount" Landlord Location Scheduled Agreed Brandon Shopping Center Partners LTD. Brandon, FL $20, $23, Countryside Mall LLC Clearwater, FL $15, $16, North County Fair LP and EWH Escondido Associates, L.P. Escondido, CA $15, $17, Westland South Shore Mall L.P. Bay Shore, NY $20, $22, "Cure Amount" Landlord Location Scheduled Arrearages Total* WEA Palm Desert LLC Palm Desert, CA $9, $10, $10, * Cure Amount Total includes $500 for attorney's fees 7