IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: MERVYN'S HOLDINGS, LLC, et al.

,
1

Debtors.

) ) ) ) ) )

Chapter 11 Case No. 08(__)

Jointly Administered

DEBTORS' MOTION FOR ENTRY OF AN ORDER AUTHORIZING THE DEBTORS TO PAY PREPETITION AMOUNTS OWED TO COMMON CARRIERS AND CUSTOMS BROKERS

Mervyn's Holdings, LLC and its affiliated debtors and debtors in possession in the above-captioned cases (collectively, the "Debtors"), by and through their undersigned counsel, hereby file this motion (the "Motion") for entry of an order substantially in the form attached hereto as Exhibit B, authorizing the payment of prepetition amounts owed to certain common carriers and customs brokers. In support of the Motion, the Debtors rely on the Affidavit of

Charles R. Kurth, Executive Vice President and Chief Financial and Administrative Officer of the Debtors, in Support of the First Day Motions, and respectfully state as follows:
JURISDICTION

I.

This Court has jurisdiction over this Motion under 28 U.S.C. 157 and

1134. Venue is proper under 28 U.S.C. 1408 and 1409. This is a core proceeding as defined in 28 U.S.C. 157(b)(2). 2. The statutory bases for the relief requested herein are Sections 1OS(a) and

363(b) of title 11 of the United States Code, 11 U.S.C. 101 et seq. (the "Bankruptcy Code") and Rule 6003 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules").

The Debtors in these cases, along with the last four digits of their federal tax identification numbers, are Mervyn's Holdings, LLC (7931), Mervyn's LLC (4456) and Mervyn's Brands, LLC (8850).

RLFI-3306791-!

0q/v('=

)_

BACKGROUND A. Introduction
1.

On July 29, 2008 (the "Petition Date"), each of the Debtors filed a voluntary

petition for relief under Chapter 11 of the Bankruptcy Code. 2. The Debtors continue to operate their business and manage their properties as

debtors in possession pursuant to Bankruptcy Code 11 07(a) and 1108. No trustee, examiner or official committee of unsecured creditors has been appointed in the Debtors' cases.

B.

Overview of the Debtors' Corporate Structure and Business

3. Mervyn's LLC ("Mervyn's") traces its roots to a mid-range department store

opened by Mervin Morris in San Lorenzo, California in 1949 and has grown over the last 60 years into a 177-store chain of family friendly, promotional department stores. Mervyn's was incorporated in 1954 and, in 1978, became a wholly-owned subsidiary of Dayton Hudson Corporation (now The Target Corporation). In late August 2004, Mervyn's converted into a California limited liability company in conjunction with its acquisition by Mervyn's Holdings, LLC ("Mervyn's Holdings"), a Delaware limited liability company formed by affiliates of Sun Capital Partners, Inc. ("Sun"), Cerberus Capital Management, L.P. ("Cerberus"), Lubert-Adler and Klaff Partners, L.P. ("KLA"). 2 Mervyn's Brands, LLC ("Mervyn's Brands") is a whollyowned subsidiary of Mervyn's and a Minnesota limited liability company which owns all or substantially all of Mervyn's intellectual property.

The 2004 transaction divided the former Mervyn's Inc.'s retail business from substantially all of its real estate assets, consisting of 262 properties previously owned or leased by Mervyn's. The remaining real estate assets, consisting of certain leases that were not assignable (the "Restricted Leases") remained with Mervyn's. The real estate entities, including MDS Realty Holdings I, LLC, MDS Realty Holdings II, LLC, MDS Realty I, LLC, MDS Realty II, LLC, MDS Realty III, LLC, MDS Realty IV, LLC, MDS I Texas Realty, LP and MDS II Texas Realty, LP (collectively, the "MDS Entities"), each of which is directly or indirectly owned by KLA, Sun and Cerberus, did not file Chapter II petitions on the filing date. Such entities have lending arrangements separate from the prepetition lending aiTangements of the Debtors.

2
RLFI-330679J.I

4.

As of the Petition Date, Mervyn's employed more than 18,000 people and

operated 177 retail stores in California and six states in the southwestern United States. Mervyn's retail stores average 80,000 retail square feet and are located primarily in community shopping centers, regional malls and freestanding locations. Through these retail stores,

Mervyn's sells its extensive selection of national brands and private-label apparel and housewares. 5. All of the retail stores are subject to leases with aggregate annual rent expense in

excess of $172 million. In addition to the retail stores, Mervyn's also leases two distribution centers and its headquarters facility located in Hayward, California. 6. For the fiscal year ended February 2, 2008, Mervyn's recorded net sales of

approximately $2.5 billion and incurred a net loss of approximately $64 million. C. The Debtors' Debt Structure 7. Mervyn's and Mervyn's Brands are party to that certain Loan and Security

Agreement, dated September 2, 2004, by and among Mervyn's, as borrower, Mervyn's Brands as guarantor, Wachovia Capital Finance Corporation (Western) (as successor to Congress Financial Corporation (Western)), as administrative agent and collateral agent, the lenders party thereto from time to time (the "Prepetition First Lien Lenders") and other parties thereto, under which the Prepetition First Lien Lenders provided a loan facility of up to $600 million to Mervyn's (the "Prepetition Senior Loan Facility") consisting of a $550 million revolving loan A facility and a $50 million revolving loan B facility, each of which is subject to a borrowing base. 8. Amounts outstanding under the Prepetition Senior Loan Facility are secured by a

first priority security interest in all or substantially all of Mervyn's and Mervyn's Brands' accounts, general intangibles (including, without limitation, intellectual property), goods

3
RLF1-3306791-1

(including, without limitation, inventory and equipment), commercial tort claims, receivables, real property3 and fixtures, chattel paper, instruments, documents and credit card sales drafts, credit card sales slips, charge slips or receipts and other forms of store receipts, deposit accounts, letters of credit, bankers acceptances and similar instruments (including letter of credit rights, supporting obligations and present and future liens, security interests, rights, remedies, title and interest in, to and in respect of receivables and other collateral), investment property, monies, credit balances and other similar property, records, all products and proceeds of the foregoing, and Mervyn's membership interests in Mervyn's Brands (the "Prepetition Collateral"). As of the Petition Date, an aggregate amount of approximately $329,381,571.02, plus interest, costs and expenses, was outstanding under the Prepetition Senior Loan Facility. 9. In addition to the Prepetition Senior Loan Facility, Mervyn's is party to that

certain Subordinated Promissory Note in the aggregate principal amount of $30 million, dated as of November 27, 2007 (the "SCSF Note"), by and among Mervyn's, as borrower, and SCSF Mervyn's (Offshore), Inc. and SCSF Mervyn's (US), LLC,4 as lenders. The SCSF Note is guaranteed by Mervyn's Brands, and the obligations of Mervyn's and Mervyn's Brands thereunder are secured by a second lien in the Prepetition Collateral. D. Events Leading to the Bankruptcy Filing I 0. During the first quarter of 2008, Mervyn's instituted a long-term turnaround plan

designed to differentiate itself from its competitors, grow sales, and improve store productivity,

No mortgages were filed in respect of the Debtors' real estate interests, including leaseholds, by the Prepetition Agent, the Prepetition First Lien Lenders, or the Prepetition Second Lien Lenders. SCSF Mervyn's (Offshore), Inc. and SCSF Mervyn's (US), LLC are affiliates of Sun, and also hold 39.59598% and 15.94846%, respectively, of the Retail Investor Percentage Interest membership interests in the Retail Series of Mervyn's Holdings (series relating to the operation of the retail business), 20.17961% and 8.64765%, respectively, of the common membership interests in the Restricted Leases Series of Mervyn's Holdings (series relating to the Restricted Leases), and 20.40651% and 8.74349%, respectively, of the prefeiTed membership interests in the Restricted Leases Series of Mervyn's Holdings.
4

4
RLFJ.J306791-l

and thereby improve profitability and cash flow. However, rollout of the plan coincided with a variety of external economic factors which have led to a precipitous decline in the Debtors' profitability and liquidity. II. Chief among those external factors are the decline in the housing market and the

tightening of the credit markets which have led, respectively, to a decline in consumer discretionary spending, including in the apparel and home decor sectors, and to a tightening of credit terms by Mervyn's suppliers and their factors. These negative external factors have

worsened in recent months. As a result of the foregoing, the ability of Mervyn's to pay its suppliers, maintain an uninterrupted flow of merchandise into the stores and service its debt has been severely negatively impacted. As economic conditions continued to deteriorate and

liquidity continued to tighten, the commencement of these cases became necessary to rationalize Mervyn's finances and operations, with the objective of reorganizing the Debtors as profitable entities.

RELIEF REQUESTED
12. By this Motion, the Debtors seek entry of an order authorizing, but not directing,

the Debtors to pay, in their sole discretion, prepetition amounts owed to certain domestic and international common carriers, shippers, freight forwarders, truckers, consolidators and customs brokers (collectively, the "Common Carriers") that the Debtors use for the shipment, transport, delivery and storage of goods in the ordinary course of the Debtors' business. A list of Common Carriers is attached hereto as Exhibit A. 5 13. As set forth above, the Debtors own and operate 177 retail stores in California and

the southwestern United States, where they sell an extensive selection of national brands,
Although the Debtors believe that the Common Carriers list includes all of the Common Carriers, the Debtors reserve the right, without the need for further order of the Com1, to supplement the Common Carriers list if any Common Carrier has been omitted.
5

5
RLF1-3306791-1

private-label apparel and housewares (the "Merchandise").

In connection with the normal

operation of their business, the Debtors rely upon the Common Carriers to obtain, store and transport the Merchandise. In most cases, the Debtors currently hold title to the Merchandise in transit. 14. The Debtors' business operations and the success of these Chapter 11 cases

depend on the delivery of the Merchandise in a timely manner. The back-to-school season, in particular, is critical to the Debtors' business, as the Debtors rely on the sale of Merchandise during the back-to-school season for a large percentage of their annual revenues. If the Common Carriers discontinue or delay shipping the Merchandise, the Debtors' inventory levels will fall substantially, and, accordingly, they will be unable to meet their sales targets in this critical season. Thus, the Debtors respectfully submit that the relief requested herein is necessary to avoid immediate and irreparable harm to the estates. 15. As of the Petition Date, the approximate retail value of the Merchandise ordered

and either awaiting transit or in transit to the Debtors' stores and distribution centers is $31 million. In contrast, the Debtors estimate that the total amount owing to all Common Carriers and the maximum amount required to obtain or deliver the Merchandise is approximately $1.8 million. Accordingly, the amounts owed to the Common Carriers represent a small fraction of the value of the Merchandise.

BASIS FOR RELIEF

16. Pursuant to Section 105(a) of the Bankruptcy Code, the "court may issue any

order, process, or judgment that is necessary or appropriate to carry out the provisions of this title." 11 U.S.C. IOS(a). The Debtors submit that the relief requested herein is necessary and appropriate to carry out the provisions of the Bankruptcy Code.

6
RLFI-3306791-1

17.

The Debtors believe that authorization of payment of prepetition amounts to

certain Common Carriers is necessary to continue in the ordinary comse of business. "The ability of the Banlauptcy Court to authorize the payment of prepetition debt when such payment is needed ... is not a novel concept." In re Ionosphere Clubs. Inc., 98 B.R. 174, 175 (Bankr. S.D.N.Y. 1989). This equitable common law principle "was first articulated by the United States Supreme Court in Miltenberger v. Logansport, C & S.W.R. Co., 106 U.S. 286, 1 S.Ct. 140, 27 L.Ed 117 (1882) and is commonly referred to as either the 'doctrine of necessity' or the 'necessity of payment' rule." In re Ionosphere Clubs, Inc., 98 B.R. at 176. "The Supreme Court, the Third Circuit and the District of Delaware all recognize the court's power to authorize payment of pre-petition claims when such payment is necessary for the debtor's survival during chapter 11." In re Just for Feet, Inc., 242 B.R. 821, 825 (D. Del. 1999). 18. Under the doctrine of necessity, a bankruptcy court may exercise its equitable

power to authorize a debtor to pay certain critical prepetition claims, where, as here such payment is essential to the debtor's business. See In re Columbia Gas System, 136 B.R. 930, 939 (Bankr. D. Del. 1992) (citing In re Lehigh & New England Rwy Co., 657 F.2d 570, 581 (3rd Cir. 1981) (recognizing that "if payment of a prepetition claim 'is essential to the continued operation of [the debtor], payment may be authorized'")). 19. Courts in this district have authorized the payment of common carrier charges and
~.

related fees in other large Chapter 11 cases. See

In re Linens Holding Co., Case No. 08-

10832 (CSS) (Bania. D. Del. May 2, 2008); In re Lillian Vernon Corp., Case No. 08-10323 (BLS) (Bankr. D. Del. Feb. 21, 2008); In re Sharper Image Corp., Case No. 08-10322 (KG) (Bankr. D. Del. Feb. 20, 2008); In re Wickes Holdings, LLC, Case No. 08-10212 (KJC) (Bankr. D. Del. Feb. 5, 2008); In re Global Motorsport Group, Inc., Case No. 08-10192 (KJC) (Bankr. D.

7
RLFI-3306791-1

Del Feb. I, 2008); In re Tweeter Home Entm't Group, Inc., Case No 07-10787 (PJW) (Bankr. D. Del. June 12, 2007); In re Radnor Holdings Corp., Case No. 06-10894 (PJW) (Bankr. D. Del. Aug. 23, 2006); In re Werner Holding Co. CDE), Inc., Case No 06-10578 (KJC) (Bankr. D. Del. June 13, 2006); In re Ultimate Elecs., Inc., Case No. 05-10104 (PJW) (Bankr. D. Del. Jan. 13, 2005). The Debtors respectfully submit that similar authorization is appropriate in these Chapter 11 cases. 20. Furthermore, the Debtors anticipate that the Common Carriers may argue that

they are entitled to possessory liens for transportation and/or storage of Merchandise in their possession and may refuse to deliver or release such goods before their liens have been satisfied. Under the laws of certain states, a carrier may have a prior lien on the goods in its possession to secure the charges or expenses incurred in connection with the transportation or storage of such goods. Pursuant to Bankruptcy Code Section 363(e), such a carrier would be entitled to adequate protection of such a valid possessory lien. 21. As noted above, the value of the Merchandise in the possession of the Common

Carriers, as well as the potential harm to the Debtors' business if the goods are not released or timely delivered or sold, far exceed the amount of any prepetition shipping and storage charges. Indeed, as set forth above, if the Debtors do not continue to receive Merchandise on a timely and uninterrupted basis, their operations will be immediately and substantially impeded during the critical back-to-school season and their business will suffer irreparable damage. 22. Accordingly, the Debtors seek an order authorizing, but not directing, them to

make payments to the Common Carriers in order to obtain the release or transport of any Merchandise held by, or to be shipped by, such Common Carriers. The Debtors seek authority to make such payments in the amounts and to the extent necessary to satisfy non-disputed

8
RLF1-3306791-1

prepetition shipping and storage charges, and to satisfy any possessory liens on the Merchandise that may be held by a Common Carrier pending payment of such charges. 23. The Debtors shall only pay shipping and storage charges where, in their business

judgment, such payments will benefit the estates and their creditors, taking into account: (i) the costs the estates would incur by bringing an action to compel turnover of such goods; (ii) the disruption associated with such actions; (iii) the costs of any delay in the supply chain; and (iv) the feasibility of replacing any such Common Carriers. 24. Authorization to pay the shipping and storage charges will not be deemed to

constitute an assumption of any agreement pursuant to Section 365 of the Bankruptcy Code, and the Debtors reserve all of their rights under the Bankruptcy Code with respect to any such agreements. Moreover, authorization to pay the shipping and storage charges does not affect the Debtors' right to contest the amount or validity of any such charges, in whole or in part. 25. Pursuant to Bankruptcy Rule 6003, the Court may grant relief regarding a motion

to pay all or part of a prepetition claim within twenty (20) days after the Petition Date if the relief is necessary to avoid immediate and irreparable harm. 26. The Debtors' Common Carriers are integral to the Debtors' business operations

and therefore, to the success of these Chapter 11 cases. Failure to satisfy obligations with respect to the Common Carriers in the ordinary course of business at the outset of these Chapter 11 cases will jeopardize the Debtors' ability to maintain adequate inventory levels during the critical back-to-school season and thereafter. irreparably harmed. 27. Accordingly, the Debtors submit that they have satisfied the requirements of The Debtors would therefore be immediately and

Bankruptcy Rule 6003 to support payment of their Common Carrier obligations.

9
RLF1-3306791-1

28.

Based upon the foregoing, the Debtors submit that the relief requested herein is

essential, appropriate and in the best interest of the Debtors and all parties in interest.
REQUEST FOR WAIVER OF STAY
29.

The Debtors further seek a waiver of any stay of the effectiveness of the order

approving this Motion. Pursuant to Bankruptcy Rule 6004(h), "[a]n order authorizing the use, sale, or lease of property other than cash collateral is stayed until the expiration of 10 days after entry of the order, unless the court orders otherwise." As set forth above, the payment of the shipping and storage charges is essential to prevent potentially irreparable damage to the Debtors' estates. Accordingly, the Debtors submit that ample cause exists to justify a waiver of the ten-day stay imposed by Rule 6004(h), to the extent it applies.
NOTICE

30.

The Debtors shall provide notice of this Motion by facsimile and/or overnight

mail to: (i) the Office of the United States Trustee for the District of Delaware; (ii) the Debtors' thirty (30) largest unsecured creditors on a consolidated basis; (iii) counsel to the agent for the Debtors' proposed postpetition secured lenders; (iv) counsel to the agent for the Debtors' prepetition senior secured lenders; (v) counsel to the agent for the Debtors' prepetition junior secured lenders; (vi) the Internal Revenue Service; (vii) the Securities and Exchange Commission; (viii) the Office of the United States Attorney General for the District of Delaware; (ix) counsel to the Debtors' equity sponsors; (x) counsel to the MDS Entities; (xi) counsel to Cerberus; and (xii) the Common Carriers. As this Motion is seeking first-day relief, notice of this Motion and any order entered hereon will be served on all parties required by Del. Bankr.
L.R. 9013-1 (m).

Due to the urgency of the circumstances surrounding this Motion and the

10
RLF1-3306791-1

nature of the relief requested herein, the Debtors respectfully submit that no further notice of this Motion is required.
NO PRIOR REQUEST

31. other court.

No prior request for the relief sought in this Motion has been made to this or any

11
RLF1-3306791-1

CONCLUSION

WHEREFORE, the Debtors respectfully request entry of an order substantially in the form attached hereto as Exhibit B, granting the relief requested herein and such other and further relief as this Court deems just and proper. Dated: July 29, 2008 Wilmington, Delaware Respectfully submitted,

Mark D. Collins (No. 2981) Daniel J. DeFranceschi (No. 2732) Christopher M. Samis (No. 4909) L. Katherine Good (No. 510 I) RICHARDS, LAYTON & FINGER, P.A. One Rodney Square 920 North King Street Wilmington, Delaware 19801 Telephone: (302) 651-7700 Facsimile: (302) 651-7701 Email: collins@rlf.com defranceschi@rlf.com samis@rlf.com good@rlf.com and Howard S. Beltzer Wendy S. Walker MORGAN LEWIS & BOCKIUS LLP 101 Park Avenue New York, New York I 0178-0060 Telephone: (212) 309-6000 Facsimile: (212) 309-6001 Email: hebeltzer@morganlewis.com wwalker@morganlewis.com
Proposed Attorneys for the Debtors and Debtors in Possession

12
RLFJ-330679!-1

EXHIBIT A
Common Carrier List

RLFI-3306791-1

Common Carrier List

Common Carrier
KKW Trucking J.B. Hunt Werner Enterprises Inc. Roadway Express Eagle Global Logistics Interstate Distributor Company Scully Distribution Services

Service Provided
Transportation services Transportation services Transportation services Transportation services Transportation services Transportation services Transportation services

Address
31 00 Pomona Blvd Pomona, CA 91768-3274 615 J.B.Hunt Corporate Drive Lowell, AR 72745 14507 Frontier Road Omaha, Nebraska 68138 1077 Gorge Boulevard Akron, OH 44309 15350 Vickery Drive Houston, TX 77032 11707 21st AvenueS. Tacoma WA 98444 10641 Almond Ave Fontana, Ca 92337 Attn: Steven A. Scullv 3050 Highland Parkway Suite 100 Downers Grove IL 60515 2005 Corporate Avenue Memphis TN 38119 1391 South Vintage Ave. Ontario, CA 91761 Attn: Gary Brown 6805 Perimeter Drive Dublin, OH 43016 2590 Campbell Boulevard Ellenwood, GA 30294 136 Harbor Drive Jersev Citv, New Jersev 07305 1391 South Vintage Ave. Ontario, CA 91761 Attn: Gary Brown 1111 Broadway, Fifth Floor Oakland, CA 94607 Attn: Vice President and General Counsel 14507 Frontier Road Omaha, Nebraska 68138 16/F NewT& T Centre, 7 Canton Road, TST Kowloon, HonQ KonQ APL Co. Pte Ltd. 456 Alexandra Road NOL Building, Suite #06-00 Attn: Director, Pricing Administration

Hub Group

Transportation services

Federal Express Pacific Apparel Xpress

Small Package Services Transportation services

Pacer Global Logistics, Inc South East Consolidators, Inc Triangle Transport Consolidated Garments

Transportation services South East Consolidator North East Consolidator Air freight

APL Logistics Americas

Port to De-Consolidator

Werner Value Added Services APL Logistics Hong Kong, Ltd. APL Line

3PL Transportation Services Consolidation, Brokerage, International Air Freight Ocean carrier

RLFI-3306791-1

Common Carrier
Evergreen Line

Service Provided
Ocean carrier

Address
Evergreen Line 7677 Oakport Street, Suite 1160 Oakland, CA 94621 Hanjin Shipping 180 Montgomery Street, Suite 1938 San Francisco, CA 94104 Orient Overseas Container Line Ltd. 2633 Camino Ramon, Suite 400 San Ramon, CA 94583 Contact: Bernard Clark, VP Pricing NYK Line (NA) Inc, As Agent for Nippon Yusen Kabushiki Kaisha 300 Lighting Way Secaucus, NJ 07094 Attn: Mr. William Hopkinson, Pricing_ Manager 533 Glendale Blvd. Los Angeles, CA 90026 Attn: Daney Chantim (Account Manager)

Hanjin Shipping

Ocean carrier

OOCL- Orient Overseas Container Line

Ocean carrier

NYK Line

Ocean carrier

Carmichael International Service

Customs Broker

2
RLFJ-3306791-l

EXHIBITB
Proposed Order

RLFI-3306791-1

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: MERVYN'S HOLDINGS, LLC, et al., Debtors.
1

) )
)

Chapter 11 Case No. 08Jointly Administered

L_)

) ) )

ORDER AUTHORIZING THE DEBTORS TO PAY PREPETITION AMOUNTS OWED TO COMMON CARRIERS AND CUSTOMS BROKERS

Upon the motion (the "Motion") of the above-captioned debtors and debtors in possession (collectively, the "Debtors") for entry of an order (this "Order") authorizing the Debtors to pay prepetition amounts owed to common carriers, shippers, freight forwarders, truckers, consolidators and customs brokers; and upon the Affidavit of Charles R. Kurth,
Executive Vice President and Chief Financial and Administrative Officer of the Debtors, in Support of the First Day Motions; and the Conrt finding that (i) the Court has jurisdiction over

this matter pursuant to 28 U.S.C. 157 and 1334, (ii) this is a core proceeding pursuant to 28 U.S.C. 157(b)(2)(A), and (iii) notice of the Motion was sufficient under the circumstances and that no other or further notice need be provided; and the Court having considered the Motion; and the Court having determined that the legal and factual bases set forth in the Motion establish just cause for the relief granted herein; and the Court having determined that the relief sought in the Motion is in the best interests of the Debtors and their estates; and after due deliberation and sufficient cause appearing therefor, it is hereby

The Debtors in these cases, along with the last four digits of their federal tax identification numbers, are Mervyn's Holdings, LLC (7931), Mervyn's LLC (4456) and Mervyn's Brands, LLC (8850).

RLFI-3306791-J

ORDERED, that the Motion is GRANTED; and it is further ORDERED, that pursuant to Section 1OS( a) of the Bankruptcy Code2 and Rule 6003 of the Bankruptcy Rules, the Debtors are authorized, but not directed, to pay in their sole discretion any or all of the valid prepetition charges of any or all of the Common Carriers listed on Exhibit A attached to the Motion, provided, however, that the aggregate amount of such payments shall not exceed $1.8 million absent further order of the Court; and it is further ORDERED, that nothing in this Order or the Motion shall be construed as prejudicing the Debtors' right to dispute or contest the amount of, or basis for, any claims against the Debtors asserted by any of the Common Carriers; and it is further ORDERED, that nothing in this Order or the Motion shall be deemed an assumption of any executory contract under 11 U.S.C. 365; and it is further ORDERED, that Rule 6003 of the Federal Rules of Bankruptcy Procedure has been satisfied; and it is further ORDERED, notwithstanding the possible applicability of Rule 6004(h) of the Bankruptcy Rules, the terms and conditions of this Order shall be immediately effective and enforceable upon its entry; and it is further ORDERED, that the Debtors, their officers, employees and agents, are authorized to take or refrain from taking such acts as are necessary and appropriate to implement and effectuate the relief granted herein; and it is further

Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Motion.

2
RLF1-3306791-1

ORDERED, that this Court shall retain jurisdiction over any matters arising from or related to the implementation or interpretation of this Order.

Dated: July_, 2008 Wilmington, Delaware

UNITED STATES BANKRUPTCY JUDGE

3
RLF133067911