IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: MERVYN'S HOLDINGS, LLC, et a1.,1 Debtors.

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

ISSUES TO BE PRESENTED AND DESIGNATION OF THE RECORD ON APPEAL Pursuant to Rule 8006 of the Federal Rules of Bankruptcy Procedure and in connection with the Notice of Appeal filed on December 19, 2011 [D.I. 6343], 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 Texas Properties I LLC, MDS Texas Properties II LLC, MDS Texas Realty I LLC, MDS Texas Realty I LP, MDS Texas Realty II LLC, and MDS Texas Realty II LP (collectively, the "MDS Entities"), as appellants and unsecured creditors, submit the following statement of issues to be presented on appeal and designation of items to be included in the record on appeal. ISSUES TO BE PRESENTED ON APPEAL 1. Whether the Bankruptcy Court erred by granting the Committee's motion to

modify Cooley's retention and fee structure, which was approved in 2004 under Bankruptcy Code 328(a), from an hourly rate to a complex contingency fee structure before the conclusion of its engagement in violation of Bankruptcy Code 328(a) which only permits alteration of previously approved retentions "after the conclusion of such employment."

1 The Debtors in these cases, along with the last four digits of the federal tax identification number for each of the Debtors, are: Mervyn's Holdings, LLC (7931); Mervyn's LLC (4456); and Mervyn's Brands, LLC (8850).

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2.

Whether the Bankruptcy Court erred by granting the Committee's motion

to modify Cooley's retention and fee structure from an hourly rate to a complex contingency fee structure absent evidence or a factual finding that approval of the existing compensation structure "prove[d] to have been improvident in light of developments not capable of being anticipated at the time of the fixing of such terms and conditions" as required by Bankruptcy Code 328(a) and when the Committee's sole witness testified that he was unaware of any circumstances since Cooley was retained in 2004 that were incapable of being anticipated. 3. Whether the Bankruptcy Court erred in granting the Committee's motion

which provides for Cooley's fees to be payable as an administrative expense claim with priority over all other administrative expense claims in violation of Bankruptcy Code 507 and contrary to Third Circuit precedent. ITEMS TO BE INCLUDED IN THE RECORD ON APPEAL Main Reorganization Case (No. 08-11586 (KG)) Tab No. Docket Index No. Document / Docket Item Affidavit of Charles R. Kurth, Executive Vice President and Chief Financial and Administrative Officer of the Debtors, in Support of First Day Motions filed By Mervyn's Holdings, LLC (Filed: 7/29/2008) Application to Employ Cooley Godward Kronish LLP as Lead Counsel to the Official Committee of Unsecured Creditors Nunc Pro Tunc to August 7, 2008 filed by Official Committee of Unsecured Creditors (Filed: 9/2/2008) Order Authorizing the Employment of Cooley Godward Kronish LLP as Lead Counsel for the Official Committee of Unsecured Creditors Nunc Pro Tunc to August 7, 2008 (Entered: 9/24/2008)

372

513

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644

Objection to Motion of Debtors and Debtors in Possession for Orders Authorizing and Approving (A) Auction and Bid Procedures, (B) Bid Protections to Stalking Horse Bidder, if Applicable, (C) Store Closing Sales Free and Clear of Liens, (D) Agency Agreement, and (E) Related Relief, with Respect to the Debtors' Remaining Stores and Cross-Motion for and Order Pursuant to 11 U.S.C. Section 1112(b) and 11 U.S.C. Section 105(a) Converting the Debtors' Chapter 11 Cases to Case Under Chapter 7 of the Bankruptcy Code filed by Official Committee of Unsecured Creditors (Filed: 10/22/2008) Transcript Regarding Hearing Held October 30, 2008 (Entered: 11/7/2008) Order Approving Stipulation and Order Resolving and Settling (I) Objection of the Official Committee of Unsecured Creditors to Motion of the Debtors and Debtors in Possession for Orders Authorizing and Approving (A) Auction and Bid Procedures, (B) Bid Protections to Stalking Horse Bidder, if Applicable, (C) Store Closing Sales Free and Clear of Liens, (D) Agency Agreement, and (E) Related Relief, with Respect to the Debtors' Remaining Stores and (II) Cross-Motion for an Order Converting the Debtors' Chapter 11 Cases to Cases Under Chapter 7 of the Bankruptcy Code (Entered: 1/2/2009) Debtor-In-Possession Monthly Operating Report for Filing Period October 2008 filed by Mervyn's Holdings, LLC (Filed: 1/11/2009) Omnibus Order Awarding Interim Allowance of Compensation for Services Rendered and for Reimbursement of Expenses (Entered: 2/25/2009) First Amended Stipulation and Order Resolving and Settling (I) Objection of the Official Committee of Unsecured Creditors to Motion of the Debtors and Debtors in Possession for Orders Authorizing and Approving (A) Auction and Bid Procedures, (B) Bid Protections to Stalking Horse Bidder, if Applicable, (C) Store Closing Sales Free and Clear of Liens, (D) Agency Agreement, and (E) Related Relief, with Respect to the Debtors' Remaining Stores and (II) Cross-Motion for an Order Pursuant to 11 U.S.C. 1112(b) and 11 U.S.C. 105(a) Converting the Debtors' Chapter 11 Cases to Cases Under Chapter 7 of the Bankruptcy Code (Entered: 3/26/2009)

917

1330

1849

2931

3175

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10

3552

Debtor-In-Possession Monthly Operating Report for Filing Period January 31, 2009 filed by Mervyn's Holdings, LLC (Filed: 6/16/2009) Omnibus Order Awarding Second Interim Allowance of Compensation for Services Rendered and for Reimbursement of Expenses (Entered: 6/25/2009) Omnibus Order Awarding Third Interim Allowance of Compensation for Services Rendered and for Reimbursement of Expenses (Entered: 10/27/2009) Omnibus Order Awarding Fourth Interim Allowance of Compensation for Services Rendered and for Reimbursement of Expenses (Entered: 2/23/2010) Omnibus Order Awarding Fifth Interim Allowance of Compensation for Services Rendered and for Reimbursement of Expenses (Entered: 6/22/2010) Omnibus Order Awarding Sixth Interim Allowance of Compensation for Services Rendered and for Reimbursement of Expenses (Entered: 11/5/2010) Omnibus Order Awarding Seventh Interim Allowance of Compensation for Services Rendered and for Reimbursement of Expenses (Entered: 3/4/2011) Omnibus Order Awarding Eighth Interim Allowance of Compensation for Services Rendered and for Reimbursement of Expenses (Entered: 6/14/2011) Debtor-In-Possession Monthly Operating Report for Filing Period 9/1/11 - 9/30/11 filed by Mervyn's Holdings, LLC (Filed: 10/19/2011) Motion of the Official Committee of Unsecured Creditors for Entry of an Order, Pursuant to 11 U.S.C. Section 105(a) and 1103, Modifying the Retention of Cooley LLP to Provide for Compensation for Certain Litigation Services on an Alternative Fee Basis Nunc Pro Tunc to September 1, 2011 filed by Official Committee of Unsecured Creditors (Filed: 11/1/2011)

11

3634

12

4170

13

4626

14

5048

15

5402

16

5751

17

5961

18

6232

19

6252

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20

6265

Debtors' Statement in Response to Motion of the Official Committee of Unsecured Creditors for Entry of an Order Modifying the Retention of Cooley LLP to Provide for Certain Litigation Services on an Alternative Fee Basis Nunc Pro Tunc to September 1, 2001 filed by Mervyn's Holdings, LLC (Filed: 11/15/2011) Objection to Creditors' Committee Motion to Modify Cooley Retention Application and Request for Mediation filed by MDS Entities (Filed: 11/15/2011) Limited Objection to Motion of the Official Committee of Unsecured Creditors for Entry of an Order, Pursuant to 11 U.S.C. Section 105(a) and 1103, Modifying the Retention of Cooley LLP to Provide for Compensation for Certain Litigation Services on an Alternative Fee Basis Nunc Pro Tunc to September 1, 2011 filed by Inland Western Retail Real Estate Trust, Inc. (Filed: 11/15/2011) Limited Objection of the Ad Hoc Consortium of Administrative Claims to Creditors' Committee's Motion to Modify Cooley Retention Application filed by Ad Hoc Consortium of Administrative Claims (Filed: 11/15/2011) Response of the Official Committee of Unsecured Creditors to the Mediation Requests of the MDS Entities, Liquidity Solutions, Inc. and Jefferies & Company in Response to the Committee's Motion to Modify Retention of Cooley LLP filed by Official Committee of Unsecured Creditors (Filed: 11/16/2011) Omnibus Order Awarding Ninth Interim Allowance of Compensation for Services Rendered and for Reimbursement of Expenses (Entered: 11/18/2011) Letter to the Honorable Judge Gross dated November 28, 2011 from counsel to the MDS Entities Letter to the Honorable Judge Gross dated December 2, 2011 filed by Ad Hoc Consortium of Administrative Claims (Filed: 12/2/2011)

21

6267

22

6268

23

6269

24

6277

25

6287

26

N.A.

27

6307

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6312

Order Granting Motion of the Official Committee of Unsecured Creditors for Entry of an Order, Pursuant to 11 U.S.C. Section 105(a), 328(a) and 1103, Modifying the Retention of Cooley LLP to Provide for Compensation for Certain Litigation Services on an Alternative Fee Basis Nunc Pro Tunc to September 1, 2011 (Entered: 12/5/2011) Monthly Application for Compensation (Thirty-Ninth) of Cooley LLP for the period October 1, 2011 to October 31, 2011 filed by Official Committee of Unsecured Creditors (Filed: 12/9/2011) Transcript of Hearing Held on November 18, 2011 (Entered: 12/15/2011) Transcript of Hearing Held on December 5, 2011 (Entered: 12/15/2011)

29

6333

30 31

6335 6336

Adversary Proceeding (No. 08-51402 (KG)) Tab. No. 32 Docket Index No. 191 Docket Item Second Amended Complaint filed by Mervyn's LLC (Filed: 11/23/2009) LANDIS RATH & COBB LLP

Dated: January 3, 2012 Wilmington, Delaware

. Landis (No. 3407) Ad Kerri K. Mumford (No. 4186) 919 Market Street, Suite 1800 Wilmington, Delaware 19801 (302) 467-4400 Telephone: (302) 467-4450 Facsimile: -and-

(331.003-W0018774.)

David M Hillman Robert J. Ward SCHULTE ROTH & ZABEL LLP 919 Third Avenue New York, New York 10022 Telephone: (212) 756-2000 Facsimile. (212) 593-5955 Counsel to the MDS Entities