Docket #5287 Date Filed: 9/21/2010

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE ---------------------------------------------------X In Re: MERVYNS HOLDING, LLC, et al., Debtors. Chapter 11 Case No. 08-11586 (KG) (Jointly Administered) Objections Due: September 30, 2010, 4:00 p.m. Hearing Date: October 7, 2010, 3:30 p.m.

---------------------------------------------------X PEM-AMERICA, INC.S RESPONSE AND OBJECTION TO DEBTORS FORTY SECOND OMNIBUS OBJECTION TO CERTAIN OVERSTATED CLAIMS AND MOTION TO REDUCE OR EXPUNGE SUCH CLAIMS Pem-America, Inc. (Pem), by and through its undersigned counsel, hereby responds and objects to the Debtors Forty Second Omnibus Objection to Certain Overstated Claims and Motion to Reduce or Expunge Such Claims (the Motion) and in support thereof, respectfully states as follows: STATEMENT OF FACTS 1. 2. Pem is a vendor of bedding and other home furnishing products. The debtors are the owners and operators of retail stores throughout the western

and southwestern part of the United States. Among the products sold by the debtors are home furnishing and related products. 3. On July 29, 2008 (the Petition Date), the debtors filed voluntary petitions under

Chapter 11 of the Bankruptcy Code in this Court. 4. The debtors continued to operate their businesses and manage their affairs as

debtors-in-possession (Debtors in Possession) pursuant to Section 1107(a) and 1108 of the Bankruptcy Code.

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Pem sold and delivered goods to the Debtors in Possession prior to, during and

after the 20 day period (the Priority Period) provided for in Section 503(b)(9) of the Bankruptcy Code. 6. In connection with Pems sale and delivery of goods to the Debtors in Possession

prior to the Priority Period, on or about October 29, 2008 Pem filed a proof of claim (Claim No. 338) in the amount of $78,145.90 as a general unsecured claim (the General Unsecured Claim). A copy of said proof of claim, together with the supporting documentation, is annexed hereto as Exhibit A. It is this claim which the Debtors In Possession now seek to reduce. 7. Pem also filed a motion for the allowance and immediate payment of certain pre-

petition sales relating to goods sold and delivered to Debtors in Possession during the Priority Period (Docket No. 566) (the Pre Petition Priority Claim). That motion sought the allowance and payment of $113,658 and resulted in the issuance of an order allowing Pems claim in the amount of $112,253.70 (Docket No.1203). 8. In order for the Debtors in Possession to preserve the value of the estate and

operate their business in the hopes of confirming a plan of reorganization, they needed to purchase goods for resale in its retail stores. 9. Pem thereafter sold and delivered goods to the Debtors In Possession in the

amount of $114,781.47 (the Post Petition Priority Claim). In order to receive payment on these sales, Pem filed a motion seeking the allowance and immediate payment of $114,781.47 (Docket No. 660), which resulted in an order allowing such claim (Docket No. 3971). 10. The Debtors in Possession now seek to reduce Pems General Unsecured Claim

from $78,145.90 to $60,882.75 (a reduction of $17,512.75). However, each of the sales supporting Pems General Unsecured Claim is fully documented with invoices and proofs of

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shipment (See Exhibit A). The Debtors in Possession offers no explanation in the Motion as to why Pems General Unsecured Claim, and the documents supporting said claim, is not accurate and valid in the full amount. 11. Indeed, each of the sales supporting Pems General Unsecured Claim was

completed and the amount claimed in Pems proof of claim is valid and remains due and payable. The payments associated with the Pre Petition Priority Claim and Post Petition Priority Claim were for sales which are distinct from the sales underlying the General Unsecured Claim and documentation supporting those separate sales was submitted in connection with Pems previous motions described above. RELIEF REQUESTED 12. Pem respectfully requests that the Debtors motion to reduce Pems General

Unsecured Claim be denied and that Pems General Unsecured Claim be allowed, along with such other and further relief as seems just and proper. Dated: September 20, 2010 CAMPBELL & LEVINE, LLC /s/ Kathleen Campbell Davis Kathleen Campbell Davis (DE No. 4229) 800 N. King Street, Suite 300 Wilmington, DE 19801 Tel: (302) 426-1900 Fax: (302) 426-9947 kdavis@camlev.com -andSteven M. Kaplan, Esquire Kaplan & Levenson P.C. 630 Third Avenue New York, NY 10017-6705 Tel: (212) 983-6900 Counsel to Pem-America, Inc

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EXHIBIT A

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: MERVYNS HOLDINGS, LLC., et al. Case No. 08-11586 (KG) Debtors. (Jointly Administered) Chapter 11

CERTIFICATE OF SERVICE I, Kathleen Campbell Davis, of Campbell & Levine, LLC, hereby certify that on September 21, 2010, I caused a copy of the foregoing Pen-America, Incs Response and Objection to Debtors Forty Second Omnibus Objection to Certain Overstated Claims and Motion to Reduce or Expunge Such Claims to be served via first class mail to the individuals listed below: Mark D. Collins, Esq. Daniel J. DeFranceschi, Esq. Christopher M. Samis, Esq. L. Katherine Good, Esq. Richards Layton & Finger P.A. One Rodney Square 920 North King Street Wilmington, DE 19801 Howard S. Beltzer, Esq. Wendy S. Walker, Esq. Morgan Lewis Bockius LLP 101 Park Avenue New York, NY 10178-0060

Date: September 21, 2010

/s/ Kathleen Campbell Davis Kathleen Campbell Davis (No. 4229)

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