Documente Academic
Documente Profesional
Documente Cultură
Document Page 1 of 43
)
In re: ) Chapter 11
)
ASCENA RETAIL GROUP, INC., et al.,1 ) Case No. 20-33113 (KRH)
)
Debtors. ) (Joint Administration Requested)
)
DEBTORS’ MOTION
FOR ENTRY OF AN ORDER AUTHORIZING
(I) REJECTION OF CERTAIN UNEXPIRED LEASES AND
(II) ABANDONMENT OF ANY PERSONAL PROPERTY, EFFECTIVE
AS OF THE REJECTION DATE, AND (III) GRANTING RELATED RELIEF
1 A complete list of each of the Debtors in these chapter 11 cases may be obtained on the website of the Debtors’
proposed claims and noticing agent at http://cases.primeclerk.com/ascena. The location of Debtor Ascena Retail
Group, Inc.’s principal place of business and the Debtors’ service address in these chapter 11 cases is 933
MacArthur Boulevard, Mahwah, New Jersey 07430.
2 On July 23, 2020 (the “Petition Date”), each Debtor filed a voluntary petition for relief under chapter 11 of title
11 of the United States Code (the “Bankruptcy Code”). A detailed description of the Debtors, their business, and
the facts and circumstances supporting these chapter 11 cases is set forth in the Declaration of Carrie W. Teffner,
Interim Executive Chair of Ascena Retail Group, Inc., in Support of Chapter 11 Petitions and First Day Motions
(the “First Day Declaration”), filed contemporaneously herewith. Capitalized terms used but not defined herein
shall have the meanings given to them in the First Day Declaration.
KE 68449560
Case 20-33113-KRH Doc 12 Filed 07/23/20 Entered 07/23/20 08:59:09 Desc Main
Document Page 2 of 43
Relief Requested
1. The Debtors seek entry of an order, substantially in the form attached hereto as
Exhibit A (the “Order”) authorizing the Debtors to (a) reject certain unexpired leases of real
property, including any guaranties thereof and any amendments, modifications, or subleases
thereto (each, a “Lease,” and collectively, the “Leases”), a list of which is annexed as Schedule 1
to Exhibit A attached hereto, (b) abandon certain equipment, fixtures, furniture, or other personal
property that may be located at the premises and not otherwise transitioned to another store
location (collectively, the “Personal Property”), both rejection of Leases and abandonment of
Personal Property to be effective as of the Rejection Date (as defined herein), and (c) granting
related relief.
2. The United States Bankruptcy Court for the Eastern District of Virginia
(the “Court”) has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334 and the
Standing Order of Reference from the United States District Court for the Eastern District of
Virginia, dated August 15, 1984. The Debtors confirm their consent, pursuant to Rule 7008 of the
Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), to the entry of a final order by
the Court in connection with this Motion to the extent that it is later determined that the Court,
absent consent of the parties, cannot enter final orders or judgments in connection herewith
4. The bases for the relief requested herein are sections 105(a), 365(a), and 554(a) of
the Bankruptcy Code, Bankruptcy Rule 6006, and Rule 6007-1 of the Local Rules of the United
States Bankruptcy Court for the Eastern District of Virginia (the “Local Bankruptcy Rules”).
Case 20-33113-KRH Doc 12 Filed 07/23/20 Entered 07/23/20 08:59:09 Desc Main
Document Page 3 of 43
Background
5. The Debtors are a leading specialty retailer for women and girls. The Debtors
operate a portfolio of recognizable brands, including Ann Taylor, LOFT, Lane Bryant, Catherines,
Justice, Lou & Grey, and Cacique, with approximately 2,800 stores in the United States, Canada,
and Puerto Rico, more than 12.5 million active customers, and nearly 43,000 employees. As has
been the case with brick and mortar retailers across the United States and the rest of the world, the
Debtors’ businesses have been substantially affected by the COVID-19 pandemic. The pandemic,
coupled with an already highly leveraged balance sheet, accelerated the need for a long-term
6. The Debtors have commenced these voluntary chapter 11 cases to restructure their
Leases to be Rejected
review and store-by-store analysis of their lease portfolio and the performance of each of their
stores. Following this process, the Debtors determined that certain of their brick-and-mortar retail
stores do not have a place in the Debtors’ go-forward business plan. Accordingly, the Debtors
filed a motion seeking to close such stores contemporaneously herewith (each, a “Closing Store”
and collectively, the “Closing Stores”).3 As of the Petition Date, the Debtors have already exited
certain underperforming stores or been forced out of certain non-go forward stores
(the “Closed Stores”) and as a result have determined to reject the related Leases. By this Motion,
3 See Debtors' Motion for Entry of Interim and Final Orders (I) Authorizing the Debtors to Assume the Consulting
Agreement, (II) Approving the Procedures for Store Closing Sales, and (III) Granting Related Relief.
Case 20-33113-KRH Doc 12 Filed 07/23/20 Entered 07/23/20 08:59:09 Desc Main
Document Page 4 of 43
the Debtors seek to reject the Leases of the Closing Stores and Closed Stores set forth on
chapter 11 cases. By rejecting the Leases, the Debtors believe that they will save significant dollars
per month in rent and associated costs. Absent rejection, the Debtors would be obligated to pay
rent under the Leases even though they will have ceased operations at, and will no longer be in
possession of, such store locations. As of the Rejection Date, the Debtors will have vacated the
Closing Stores and Closed Stores for the Leases sought to be rejected by this Motion. Moreover,
in addition to their obligations to pay rent under the Leases, the Debtors may be obligated to pay
certain real property taxes, utilities, insurance, and other related charges associated with the
Leases. The Debtors have determined in their business judgment that such costs constitute a waste
of estate assets. Additionally, the Debtors have determined in their business judgment that the
costs of the Leases exceed any marginal benefits that could potentially be achieved from
costs, the Debtors have determined that it is in the best interests of their estates to reject the Leases
10. Additionally, before the Debtors vacate the Closing Stores and Closed Stores for
Leases sought to be rejected by this Motion, the Debtors will evaluate the remaining personal
property located therein and determine whether (a) the personal property is of inconsequential
value or (b) the cost of removing and storing the personal property for future use, marketing, or
11. Accordingly, to reduce postpetition administrative costs and in the exercise of the
Debtors’ sound business judgment, the Debtors believe that the abandonment of the Personal
Property as of the applicable Rejection Date is appropriate and in the best interests of the Debtors,
12. Section 365(a) of the Bankruptcy Code provides that a debtor in possession,
“subject to the court’s approval, may . . . reject any executory contract or unexpired lease of the
debtor.” 11 U.S.C. § 365(a). See also In re Merry-Go-Round Enters., Inc., 400 F.3d 219, 225
(4th Cir. 2005). For the benefit of the estate, a debtor may, under section 365 of the Bankruptcy
See In re Shangra-La, Inc., 167 F.3d 843, 849 (4th Cir. 1999) (“[T]he authority to reject an
executory contract is vital to the basic purpose of a Chapter 11 reorganization, because rejection
can release the debtor’s estate from burdensome obligations that can impede a successful
reorganization.” (quoting NLRB v. Bildisco & Bildisco, 465 U.S. 513, 528 (1984) (alteration in
original))); In re Park, 275 B.R. 253, 255 (Bankr. E.D. Va. 2002); see also Stewart Title Guar.
Co. v. Old Republic Nat’l Title Ins. Co., 83 F.3d 735, 741 (5th Cir. 1996) (stating that section 365
“allows a [debtor] to relieve the bankruptcy estate of burdensome agreements which have not been
the “business judgment” standard. Lubrizol Enters., Inc. v. Richmond Metal Finishers, Inc., 756
F.2d 1043, 1046 (4th Cir. 1985). The business judgment standard requires a court to approve a
debtor’s business decision unless that decision is the product of bad faith or gross abuse.
See Lubrizol, 756 F.2d. at 1047; In re Alpha Natural Resources, Inc., 555 B.R. 520, 529-30
Case 20-33113-KRH Doc 12 Filed 07/23/20 Entered 07/23/20 08:59:09 Desc Main
Document Page 6 of 43
(Bankr. E.D. Va. 2016) (“[A] court should not second-guess a debtor’s business judgment
concerning the assumption or rejection of an executory contract or unexpired lease unless there is
a showing of bad faith or gross abuse of discretion.”); In re US Airways Group, Inc., 287 B.R. 643,
14. Upon finding that a debtor exercised its sound business judgment in determining
that rejection of certain contracts or leases is in the best interests of its creditors and all parties in
interest, a court should approve the rejection under section 365(a). See In re Summit Land Co.,
13 B.R. 310, 315 (Bankr. D. Utah 1981) (“In any event, court approval under Section 365(a), if
“Accordingly, the court should not interfere with or second guess the debtor’s sound business
judgment unless and until evidence is presented that establishes that the debtor’s decision was one
taken in bad faith or in gross abuse of its retained business discretion.” In re Wheeling-Pittsburgh
Steel Corp., 72 B.R. 845, 849 (Bankr. W.D. Pa. 1987) (citing Lubrizol, 756 F.2d. at 1047).
II. Rejection of the Leases is Within the Debtors’ Business Judgment and is in The Best
Interest of Their Estates.
15. After evaluation and analysis, the Debtors, with the assistance of their advisors,
have determined that there is no net benefit that is likely to be realized from the Debtors’ efforts
to retain and market the Leases, and that there is little if any likelihood that the Debtors will be
able to realize value from the Leases. Therefore, the Leases are not a part of the Debtors’
go-forward business plan and are otherwise a burden to the Debtors’ estates.
16. The Debtors seek to reject the Leases, pursuant to section 365(a) of the Bankruptcy
Code, to avoid the incurrence of any additional, unnecessary expenses related to the Leases. The
Debtors have concluded that the cost of maintaining the Closing Stores and Closed Stores for the
Leases sought to be rejected by this Motion outweighs any revenues that such stores or premises
Case 20-33113-KRH Doc 12 Filed 07/23/20 Entered 07/23/20 08:59:09 Desc Main
Document Page 7 of 43
currently generate or that they are likely to generate in the near future. Absent rejection, the
Debtors believe that the Leases will continue to burden the Debtors’ estates with substantial
administrative expenses at a critical time when the Debtors are making concerted efforts to
maximize liquidity and preserve the going concern value of the Debtors’ business. Rejecting the
Leases will help ease the Debtors’ cash burn and increase the Debtors’ liquidity.
17. For all of the foregoing reasons, the Debtors have decided, in the exercise of their
sound business judgment, to reject the Leases. Accordingly, the Debtors respectfully request that
the Court authorize the rejection of the Leases pursuant to section 365(a) of the Bankruptcy Code.
18. Section 365 of the Bankruptcy Code does not specifically address whether the
Bankruptcy Court may order rejection to be applied retroactively. See In re Chi-Chi’s, Inc.,
305 B.R. 396, 399 (Bankr. D. Del. 2004) (stating that section 365 allows for retroactive rejection
of nonresidential leases where the principles of equity dictate); see also In re CCI Wireless, LLC,
297 B.R. 133, 138 (D. Colo. 2003) (noting that section 365 “does not prohibit the bankruptcy court
from allowing the rejection of leases to apply retroactively”). Many courts have held that
bankruptcy courts may, in their discretion, authorize rejection retroactively to a date prior to entry
of the order authorizing such rejection where the balance of equities favor such relief. See, e.g.,
In re Virginia Packaging Supply Co., Inc., 122 B.R. 491, 493 (Bankr. E.D. Va. 1990) (allowing
retroactive rejection of a lease where the debtor timely filed a motion for rejection); see also In re
Philadelphia Newspapers, LLC, 424 B.R. 178, 185 (Bankr. E.D. Pa. 2010) (granting retroactive
rejection where equitable considerations did not weigh against it); BP Energy Co. v. Bethlehem
Steel Corp., No. 02 Civ. 6419, 2002 WL 31548723, at *3 (S.D.N.Y. Nov. 15, 2002) (“[W]e cannot
conclude . . . that a bankruptcy court’s assignment of a retroactive rejection date falls outside of
its authority when the balance of the equities favors this solution.”); In re At Home Corp., 392 F.3d
Case 20-33113-KRH Doc 12 Filed 07/23/20 Entered 07/23/20 08:59:09 Desc Main
Document Page 8 of 43
1064, 1065–66 (9th Cir. 2004) cert. denied sub nom., 546 U.S. 814 (2005) (affirming bankruptcy
court’s approval of retroactive rejection); In re Thinking Machs., Corp., 67 F.3d 1021, 1028 (1st.
Cir. 1995) (“[B]ankruptcy courts may enter retroactive orders of approval, and should do so when
approve retroactive rejection, courts examine a number of factors, and generally approve
retroactive rejection where it promotes the purposes of section 365(a) of the Bankruptcy Code.
19. In this instance, the balance of the equities favors approval of retroactive rejection
of the Leases. Prior to the Petition Date, the Debtors determined in their business judgment to
initiate store closings in an attempt to preserve liquidity. As a result of these prepetition actions
and notice of this Motion, the landlords are not subject to any uncertainty regarding the Debtors’
intent with respect to the Leases. Moreover, the landlords will not be unduly prejudiced if rejection
is deemed effective as of the applicable Rejection Date because they will have received notice of
this Motion and had sufficient opportunity to act accordingly. Upon the applicable Rejection Date
of the Leases identified in Schedule 1, the affected landlords will be relieved of their own
obligations under the Leases, allowing them to cease performance and immediately repossess their
property or enter into new leases. Any postponement of the effective date of rejection of the Leases
would compel the Debtors to compensate the landlords, at the estates’ expense, for a delay that the
Debtors made every effort to avoid, and force the Debtors potentially to incur unnecessary
administrative expenses for Leases that provide no benefit to these estates. Such an outcome would
20. Pursuant to section 365 of the Bankruptcy Code, the Debtors seek to effectuate
rejection of the Leases as of the Rejection Date, which may in some cases occur before the date an
Case 20-33113-KRH Doc 12 Filed 07/23/20 Entered 07/23/20 08:59:09 Desc Main
Document Page 9 of 43
order approving rejection of the Leases has been entered by the Court. For the reasons set forth
above, permitting rejection of the Leases to occur as of the Rejection Date is fair and equitable to
all parties in interest, especially where the counterparties to the Leases will not be prejudiced
thereby. Permitting rejection to occur as of the Rejection Date is consistent with prior rulings in
this and other jurisdictions. See, e.g., In re Pier 1 Imports, Inc., No. 20-30805 (KRH) (Bankr. E.D.
Va. Feb. 18, 2020) (approving retroactive rejection of unexpired leases); In re Toys “R” Us, Inc.,
No. 17-34665 (KLP) (Bankr. E.D. Va. Oct. 25, 2017) (same); In re Patriot Coal Corp.,
No. 15-32450 (KLP) (Bankr. E.D. Va. Sept. 1, 2015) (same); see also In re J.C. Penney Company,
Inc., No. 20-20182 (DRJ) (Bankr. S.D. Tex. June 12, 2020) (same); In re Stage Stores, Inc.,
No. 20-32564 (DRJ) (Bankr. S.D. Tex. May 15, 2020) (same).4
21. A court may permit such retroactive rejection to avoid unduly exposing a debtor’s
estate to unwarranted postpetition administrative or other expenses. If the relief requested is not
granted, the Debtors and their creditors will be burdened with unnecessary expenses. Moreover,
the counterparties to the Leases will not be unduly prejudiced, because (a) the counterparties have
sufficient notice of the Debtors’ intent to reject the applicable Leases and (b) the Debtors will have
vacated and returned the keys to all the counterparties. See Bildisco & Bildisco, 465 U.S. at 523
(stating that rejection relates back to the petition date); In re Thinking Machs. Corp., 67 F.3d at
1028 (“In the section 365 context . . . bankruptcy courts may enter retroactive orders of approval,
and should do so when the balance of equities preponderates in favor of such remediation.”);
Stonebriar Mall Ltd. P’ship v. CCI Wireless, LLC (In re CCI Wireless, LLC), 297 B.R. 133, 140
(D. Col. 2003) (holding that a bankruptcy court “has authority under section 365(d)(3) to set the
4 Because of the voluminous nature of the orders cited herein, such orders have not been attached to this Motion.
Copies of these orders are available upon request to the Debtors’ proposed counsel.
Case 20-33113-KRH Doc 12 Filed 07/23/20 Entered 07/23/20 08:59:09 Desc Main
Document Page 10 of 43
effective date of rejection at least as early as the filing date of the motion to reject”); In re Amber’s
22. Additionally, courts may approve retroactive rejection of executory contracts and
unexpired leases “after balancing the equities” and concluding that they weigh in favor of the
debtor. See In re Chi-Chi’s, Inc., 305 B.R. at 399 (acknowledging that a bankruptcy court may
approve a rejection retroactive to the date the motion is filed after balancing the equities in the
particular case); In re Fleming Cos., Inc., 304 B.R. 85, 96 (Bankr. D. Del. 2003) (finding that
rejection has been allowed nunc pro tunc to the date of the motion); see also Thinking Machs.
Corp., 67 F.3d at 1028 (“In the section 365 context, . . . bankruptcy courts may enter retroactive
orders of approval, and should do so when the balance of equities preponderates in favor of such
remediation.”); In re Jamesway Corp., 179 B.R. 33, 36-37 (S.D.N.Y. 1995) (indicating that section
365 does not include “restrictions as to the manner in which the court can approve rejection”).
23. The balance of the equities favor retroactive relief with respect to the Leases to the
date hereof. Without a retroactive date of rejection, the Debtors may be forced to incur
unnecessary administrative expenses for the Leases—leases that provide no benefit to the Debtors’
estates. See 11 U.S.C. § 365(d)(3). Moreover, the non-debtor parties under the Leases will not be
unduly prejudiced if the rejection is deemed effective as of the provided Rejection Date.
Contemporaneously with the filing of this Motion, the Debtors will cause notice of this Motion to
be served on the counterparties to the Leases, thereby providing sufficient opportunity to respond
accordingly. The Debtors have sought the relief requested at the earliest practicable moment in
these chapter 11 cases and do not seek to reject the Leases effective nunc pro tunc to the applicable
Rejection Date due to any delay on their own part. Based on this factual record, no party can assert
that the Debtors seek to write any “revisionist history.” Roman Catholic Archdiocese of San Juan,
Case 20-33113-KRH Doc 12 Filed 07/23/20 Entered 07/23/20 08:59:09 Desc Main
Document Page 11 of 43
Puerto Rico v. Acevedo Feliciano, 140 S. Ct. 696, 701 (2020) (“Federal courts may issue nunc pro
tunc orders, or ‘now for then’ orders [] to reflect the reality of what has already occurred [but not
as a] vehicle for . . . creating ‘facts’ that never occurred . . .”) (internal citations omitted).
24. Accordingly, the Debtors respectfully submit that it is fair and equitable for the
Court to authorize the rejection of the Leases, effective as of the Rejection Date.
IV. Abandonment of Any Personal Property Located at the Closing Stores Is Authorized by
Section 554(a) of the Bankruptcy Code.
25. Section 554(a) of the Bankruptcy Code provides that, “[a]fter notice and a hearing,
the [debtor] may abandon any property of the estate that is burdensome to the estate or that is of
inconsequential value and benefit to the estate.” 11 U.S.C. § 554(a); see also In re Wilson,
94 B.R. 886, 888 (Bankr. E.D. Va. 1989) (“It is well settled, however, that a trustee is not obligated
to accept onerous or unprofitable property surrendered as part of the estate, and may abandon
property that is ‘burdensome’ or ‘of inconsequential value and benefit’ under § 554 of the Code.”)
(internal citations omitted). The right to abandon property is virtually unfettered, unless:
(a) abandonment of the property will contravene laws designed to protect public health and safety;
or (b) the property poses an imminent threat to the public’s welfare. See In re Midlantic Nat’l
Bank, 474 U.S. 494, 501 (1986). Neither of these limitations are relevant under the instant facts.
26. The Debtors submit that any Personal Property left at any of the Closing Stores or
Closed Stores for the Leases sought to be rejected by this Motion is of inconsequential value to
the Debtors’ estates, or the costs to the Debtors of retrieving, marketing, and reselling the Personal
Property will exceed the recoveries, if any, that the Debtors and their estates could reasonably
obtain in exchange for such property. Courts in this district have previously approved similar
relief in other chapter 11 cases involving retail debtors. See, e.g., In re Pier 1 Imports, Inc.,
Case 20-33113-KRH Doc 12 Filed 07/23/20 Entered 07/23/20 08:59:09 Desc Main
Document Page 12 of 43
No. 20-30805 (KRH) (Bankr. E.D. Va. Mar. 19, 2020); In re Toys “R” Us, Inc., No. 17-34665
27. Accordingly, the Debtors have determined, in the exercise of their sound business
judgment that abandonment of any Personal Property will be in the best interest of the Debtors and
their estates.
V. The Court Should Find that the Landlords are Required to Release the Seized Inventory
to the Debtors.6
28. As described in greater detail in the First Day Declaration, the COVID-19 pandemic
forced the Debtors to temporarily close all of their retail locations and cease rent payments due
under existing lease obligations to preserve liquidity. During this period, a handful of landlords
locked the Debtors out of certain of their retail store locations without relinquishing the existing
inventory therein (the “Seized Inventory”). The Debtors request that the Court require the
landlords to the Leases relinquish any Seized Inventory to the Debtors and their estates, consistent
29. Pursuant to section 541(a)(1) of the Bankruptcy Code, all legal or equitable interests
of the debtor in property as of the commencement of the case become property of the
estate. 11 U.S.C. § 541(a)(1). As a general principle, state law determines the nature and extent
of a debtor’s property interests and the Bankruptcy Code determines the extent to which those
property interests are property of the estate. See Butner v. United States, 440 U.S. 48, 55 (1979).
Where a lease has not terminated prior to the filing of a chapter 11 petition, the bankruptcy estate
retains an interest in the leased property. See, e.g., In re Alvarez, 319 B.R. 108, 111 (Bankr. W.D.
5 Because of the voluminous nature of the orders cited herein, such orders have not been attached to this Motion.
Copies of these orders are available upon request to the Debtors’ proposed counsel.
6 The Leases identified with an asterisk in Schedule 1 attached hereto contain Seized Inventory that the Debtors do
not wish to abandon. The Debtors are, by this Motion, seeking turnover of such Seized Inventory.
Case 20-33113-KRH Doc 12 Filed 07/23/20 Entered 07/23/20 08:59:09 Desc Main
Document Page 13 of 43
Pa. 2004). Notwithstanding the Bankruptcy Code’s deference to state law with respect to the
nature and extent of a debtor’s interest in property, the Debtors’ interest in the Seized Inventory is
30. Section 362(a)(3) of the Bankruptcy Code imposes a stay of “any act to obtain
possession of property of the estate or of property from the estate or to exercise control over
property of the estate.” 11 U.S.C. § 362 (a)(3). There is a circuit split as to whether, upon receiving
possession of property that it lawfully repossessed prepetition or whether the debtor must take
further action to regain possession of the property in dispute. The majority view in the Second,
Seventh, Eighth, Ninth, and Eleventh Circuits provides that a secured creditor must return property
to the debtor upon learning of a debtor’s bankruptcy filing or otherwise violates the automatic stay.
In re Fulton, 926 F.3d 916 (7th Cir. 2019), cert. granted, 205 L. Ed. 2d 449 (U.S. Dec. 18, 2019)
(No. 19-357) (finding section 362(a)(3) becomes effective immediately upon filing the petition
and is not dependent on the debtor first bringing a turnover action); In re Weber, 719 F.3d 72 (2d
Cir. 2013) (holding refusal to turnover property seized prepetition constitutes an exercise of control
in violation of the automatic stay); In re Del Mission Ltd., 98 F.3d 1147, 1151 (9th Cir. 1996) (“To
effectuate purpose of automatic stay, which is to alleviate financial strains on debtor, onus to return
estate property is placed upon possessor . . . .”); In re Knaus, 889 F.2d 773, 775 (8th Cir. 1989)
(finding creditor’s failure to voluntarily turn over property taken lawfully prepetition constituted
violation of automatic stay). However, the Tenth and D.C. Circuits hold a minority view that a
secured creditor is not obligated to return property to the debtor until the debtor obtains a
Bankruptcy Court order requiring the creditor to do so. See generally In re Cowen, 849 F.3d 943,
948 (10th Cir. 2017) (finding the automatic stay did not prohibit secured creditors from passively
Case 20-33113-KRH Doc 12 Filed 07/23/20 Entered 07/23/20 08:59:09 Desc Main
Document Page 14 of 43
retaining possession of collateral which they had repossessed prepetition without further order of
the bankruptcy court); U.S. v. Inslaw, Inc., 932 F.2d 1467 (D.C. 1991) (finding continued use of
debtor’s property did not constitute exercise of control to support finding of willful violation of
31. Notably, under either view, the Debtors would be entitled to seek the turnover of
any property of the estate that is being held by the prepetition landlords. The only split is whether
the landlords’ continued postpetition possession alone constitutes a violation of the automatic stay.
For the avoidance of doubt, by this Motion the Debtors are not requesting a finding that such
landlords are in violation of the automatic stay, but rather a direction from this Court to applicable
landlords to relinquish to the Debtors possession of any Seized Inventory that constitutes property
of the estate.
32. Indeed, to the extent any landlord asserts a statutory lien over the Seized Inventory,
such lien likely is subordinated to the prepetition secured liens issued pursuant to the Debtors’
existing funded debt. The Debtors are parties to leases in a number of jurisdictions, and each lease
is governed by state law. Certain states grant statutory liens on a tenant’s inventory or personal
assets for the nonpayment of rent. Statutory liens vary from state to state, and enforcement of a
landlord lien generally requires judicial action. See, e.g., D.C. Code Ann. § 45-1414(1) (providing
that a landlord must obtain a judgment to levy against goods); Va. Code Ann. § 55-230 (same);
Tex. Prop. Code § 54.021 (same). Further, states impose various restrictions on the scope of the
landlord lien. Tex. Prop. Code § 54.021 (limits a landlord’s lien to secure rent solely for the
preceding 12-month period from the time of default); Va. Code Ann. § 8.01-130.6. (provides that
a landlord’s lien may only be asserted against property on the premises at the time of the default
or in the previous 30 days, and further, that the lien may only be asserted for six-months’ rent.)
Case 20-33113-KRH Doc 12 Filed 07/23/20 Entered 07/23/20 08:59:09 Desc Main
Document Page 15 of 43
33. Practically, secured lenders typically require landlords to enter into waiver and
subordination agreements for any landlord lien that may arise upon the event of a default before
the borrower-tenant enters into any lease agreements. These subordination agreements are
common in commercial transactions and expressly allowed under the U.C.C. U.C.C. § 9-339.
Here, many of the Debtors’ landlords have agreed to subordinate their respective liens to the
Debtors’ funded debt, consisting of a senior secured asset based revolver and a senior secured term
loan. Accordingly, due to the bargained for position that the landlords agreed to, such liens would
be subordinated, and the applicable Seized Inventory should be returned to benefit the Debtors’
estates.
34. To avoid the need to file multiple motions to seek the rejection of the Leases, the
Debtors respectfully request a waiver of the requirement that an omnibus rejection motion include
no greater than 100 leases. See Fed. R. Bankr. P. 6006(f)(6). The waiver does not alter the
substance of the relief, only the form in which relief is sought. Establishing a single, integrated
schedule of the Leases ensures fair and uniform treatment of each Lease, and avoids the
unnecessary and costly administrative burden that separate motions would impose on the Debtors
and the Court. The Debtors are not seeking a waiver of any requirement set forth in Bankruptcy
Notice
35. The Debtors will provide notice of this Motion via first class mail, facsimile or
email (where available) to: (a) the United States Trustee for the Eastern District of Virginia; (b) the
holders of the 50 largest unsecured claims against the Debtors (on a consolidated basis); (c) the
agents under the Debtors’ prepetition secured facilities and counsel thereto; (d) the DIP Agents
and their respective counsel thereto; (e) counsel to the Ad Hoc Group; (f) the United States
Case 20-33113-KRH Doc 12 Filed 07/23/20 Entered 07/23/20 08:59:09 Desc Main
Document Page 16 of 43
Attorney’s Office for the Eastern District of Virginia; (g) the Internal Revenue Service; (h) the
office of the attorneys general for the states in which the Debtors operate; (i) the Securities and
Exchange Commission; (j) the National Association of Attorneys General; (k) the lessors of the
Leases listed on Schedule 1 to Exhibit A; and (m) any party that has requested notice pursuant to
Bankruptcy Rule 2002 (collectively, the “Notice Parties”). The Debtors submit that, in light of the
No Prior Request
36. No prior request for the relief sought in this Motion has been made to this or any
other court.
WHEREFORE, the Debtors respectfully request that the Court enter the Order, granting
the relief requested herein and such other relief as the Court deems appropriate under the
circumstances.
Richmond, Virginia
Dated: July 23, 2020
Exhibit A
Proposed Order
Case 20-33113-KRH Doc 12 Filed 07/23/20 Entered 07/23/20 08:59:09 Desc Main
Document Page 19 of 43
)
In re: ) Chapter 11
)
ASCENA RETAIL GROUP, INC., et al.,1 ) Case No. 20-33113 (KRH)
)
Debtors. ) (Joint Administration Requested)
)
Upon the motion (the “Motion”)2 of the above-captioned debtors and debtors in possession
(collectively, the “Debtors”) for entry of an order (this “Order”): (a) authorizing the Debtors to
reject the Leases set forth on Schedule 1 attached hereto, effective as of the
Rejection Date, (b) authorizing the Debtors to abandon any Personal Property located at any such
1 A complete list of each of the Debtors in these chapter 11 cases may be obtained on the website of the Debtors’
proposed claims and noticing agent at http://cases.primeclerk.com/ascena. The location of Debtor Ascena Retail
Group, Inc.’s principal place of business and the Debtors’ service address in these chapter 11 cases is 933
MacArthur Boulevard, Mahwah, New Jersey 07430.
2
Capitalized terms used but not otherwise defined herein have the meanings ascribed to them in the Motion.
Case 20-33113-KRH Doc 12 Filed 07/23/20 Entered 07/23/20 08:59:09 Desc Main
Document Page 20 of 43
store locations, effective as of the Rejection Date, and (c) granting related relief; all as more fully
set forth in the Motion; and upon the First Day Declaration; and this Court having jurisdiction over
this matter pursuant to 28 U.S.C. §§ 157 and 1334 and the Standing Order of Reference from the
United States District Court for the Eastern District of Virginia, dated July 10, 1984; and this
Court having found that it may enter a final order consistent with Article III of the United States
Constitution; and this Court having found that venue of this proceeding and the Motion in this
district is proper pursuant to 28 U.S.C. §§ 1408 and 1409; and this Court having found that the
relief requested in the Motion is in the best interests of the Debtors’ estates, their creditors, and
other parties in interest; and this Court having found that the Debtors’ notice of the Motion and
opportunity for a hearing on the Motion were appropriate under the circumstances and that no
other notice need be provided; and this Court having reviewed the Motion and having heard the
statements in support of the relief requested therein at a hearing before this Court (the “Hearing”);
and this Court having determined that the legal and factual bases set forth in the Motion and at the
Hearing establish just cause for the relief granted herein; and upon all of the proceedings had
before this Court; and after due deliberation and sufficient cause appearing therefor, it is HEREBY
ORDERED THAT:
Schedule 1 attached hereto are hereby rejected, effective as of the Petition Date (the “Rejection
Date”).
3. The Debtors do not waive any claims that they may have against any counterparty
to the Leases, whether or not such claims arise under, are related to the rejection of, or are
3
Case 20-33113-KRH Doc 12 Filed 07/23/20 Entered 07/23/20 08:59:09 Desc Main
Document Page 21 of 43
4. Nothing herein shall prejudice any party’s rights to assert that the Leases are not,
in fact, executory within the meaning of section 365 of the Bankruptcy Code.
5. The Debtors are authorized to abandon any Personal Property located at the
Closing Stores or Closed Stores for the Leases sought to be rejected by this Motion free and clear
6. Upon request from the Debtors, and only to the extent the Debtors’ interest in any
Seized Inventory constitutes property of the estate, the applicable landlord of a Lease in possession
of any Seized Inventory shall relinquish to the Debtors possession of the Seized Inventory.
7. Nothing herein shall prejudice the rights of the Debtors to argue that any of the
Leases were terminated prior to the Petition Date, or that any claim for damages arising from the
rejection of the Leases is limited to the remedies available under any applicable termination
provision of such lease, sublease, or contract, as applicable, or that any such claim is an obligation
8. Notwithstanding anything to the contrary in this Order, any payment made or action
taken by any of the Debtors pursuant to the authority granted in this Order must be in compliance
with, and shall be subject to: (i) any interim or final order approving the Debtors’ use of cash
collateral and/or any postpetition financing facility (in either case, the “Cash Collateral Order”);
(ii) the documentation in respect of any such use of cash collateral and/or postpetition financing;
and (iii) the budget governing any such use of cash collateral and/or postpetition financing. To
the extent there is any inconsistency between the term of the Cash Collateral Order and this Order,
9. Notwithstanding the relief granted in this Order and any actions taken pursuant to
such relief, nothing in this Order shall be deemed: (a) an admission as to the amount of, basis for,
4
Case 20-33113-KRH Doc 12 Filed 07/23/20 Entered 07/23/20 08:59:09 Desc Main
Document Page 22 of 43
or validity of any claim against the Debtors under the Bankruptcy Code, any foreign bankruptcy
or insolvency law, or other applicable nonbankruptcy law; (b) a waiver of the Debtors’ or any other
party in interest’s right to dispute any claim on any grounds; (c) a promise or requirement to pay
any particular claim; (d) an implication or admission that any particular claim is of a type specified
or defined in this Order or the Motion; (e) a request or authorization to assume, adopt, or reject
any agreement, contract, or lease pursuant to section 365 of the Bankruptcy Code; (f) an admission
to the validity, priority, enforceability, or perfection of any lien on, security interest in, or
encumbrance on property of the Debtors’ estates; or (g) a waiver of any claims or causes of action
which may exist against any entity under the Bankruptcy Code or any other applicable law.
10. Nothing in the Motion or this Order shall be deemed or construed as an approval of
an assumption of any lease, sublease, or contract pursuant to section 365 of the Bankruptcy Code,
11. Nothing contained in the Motion or this Order is intended or should be construed
12. Notwithstanding anything to the contrary, the terms and conditions of this Order
13. Notice of the Motion as provided therein is good and sufficient notice of such
Motion.
14. The Debtors are authorized to take all actions necessary to effectuate the relief
15. This Court retains exclusive jurisdiction with respect to all matters arising from or
Dated: __________
Richmond, Virginia United States Bankruptcy Judge
5
Case 20-33113-KRH Doc 12 Filed 07/23/20 Entered 07/23/20 08:59:09 Desc Main
Document Page 23 of 43
CERTIFICATION OF ENDORSEMENT
UNDER LOCAL BANKRUPTCY RULE 9022-1(C)
Pursuant to Local Bankruptcy Rule 9022-1(C), I hereby certify that the foregoing proposed order has been endorsed by
or served upon all necessary parties.
Schedule 1
Rejected Leases
Case 20-33113-KRH Doc 12 Filed 07/23/20 Entered 07/23/20 08:59:09 Desc Main
Document Page 25 of 43
Store ID Debtor Lease Counterparty and Address Property Address Rejection Date
Store ID Debtor Lease Counterparty and Address Property Address Rejection Date
BPR-FF LLC
ATTN: LAW/LEASE ADMINISTRATION DEPARTMENT
100 COLUMBIANA CIRCLE
4928 LANE BRYANT, INC. 350 N. ORLEANS STREET 8/5/2020
COLUMBIA, SC 29212
SUITE 300
CHICAGO, IL 60654
CENCOR REALTY
1800 BERING DRIVE ROUTE 518 & ROUTE 288
5961 CATHERINES, INC. 7/23/2020
SUITE 550 PEARLAND, TX 77584
HOUSTON, TX 77057
Store ID Debtor Lease Counterparty and Address Property Address Rejection Date
CPG PARTNERS, LP
C/O SIMON PREMIUM OUTLETS
2200 PETALUMA BLVD NORTH
4319 LANE BRYANT, INC. 225 WEST WASHINGTON STREET - ATTN: PREMIUM 7/29/2020
PETALUMA, CA 94952
OUTLETS
INDIANAPOLIS, IN 46204
CPG PARTNERS, LP
C/O SIMON PROPERTY GROUP, INC. 4540 HIGHWAY 54, SUITE H1
4119 LANE BRYANT, INC. 8/5/2020
225 WEST WASHINGTON STREET OSAGE BEACH, MO 65065
INDIANAPOLIS, IN 46204-3438
Store ID Debtor Lease Counterparty and Address Property Address Rejection Date
DELCO PLAZA I, LP
1201 CARLISLE ROAD
1019 THE DRESS BARN, INC. 1665 STATE HILL ROAD 7/23/2020
YORK, PA 17404
WYOMISSING, PA 19610
Store ID Debtor Lease Counterparty and Address Property Address Rejection Date
Store ID Debtor Lease Counterparty and Address Property Address Rejection Date
GOODMILL, LLC
636 OLD YORK ROAD 3849 SOUTH DELSEA DRIVE
6760 LANE BRYANT, INC. 7/29/2020
2ND FLOOR MILLVILLE, NJ 08360
JENKINTOWN, PA 19046
Store ID Debtor Lease Counterparty and Address Property Address Rejection Date
KIOP ENFIELD, LP
C/O KIMCO REALTY CORPORATION ELM STREET AND INTERSTATE 91
6181 LANE BRYANT, INC. 8/5/2020
500 NORTH BROADWAY, SUITE 201 ENFIELD, CT 06082
JERICHO, NY 11753
LA FRONTERA VILLAGE, LP
C/O SANSONE GROUP 200 SUNDANCE PARKWAY
728 Tween Brands, Inc. 7/23/2020
120 SOUTH CENTRAL/SUITE 500 ROUND ROCK, TX 78681
ST. LOUIS, MO 63105
Store ID Debtor Lease Counterparty and Address Property Address Rejection Date
MACERICH BUENAVENTURA, LP
C/O THE MACERICH COMPANY 3301-1 EAST MAIN STREET
23 Tween Brands, Inc. 7/25/2020
401 WILSHIRE BLVD/SUITE 700 VENTURA, CA 93003
SANTA MONICA, CA 90401-0000
MACERICH FRESNO, LP
C/O THE MACERICH COMPANY 701 EAST SHAW AVENUE
351 Tween Brands, Inc. 7/25/2020
401 WILSHIRE BLVD/SUITE 700 FRESNO, CA 93710
SANTA MONICA, CA 90401
MACERICH OAKS, LP
MACERICH PROPERTY MGMT. CO., LP 222 WEST HILLCREST DRIVE
139 Tween Brands, Inc. 7/25/2020
401 WILSHIRE BLVD/SUITE 700 THOUSAND OAKS, CA 91360
SANTA MONICA, CA 90401
Store ID Debtor Lease Counterparty and Address Property Address Rejection Date
MILIPITAS MILLS LP
C/O SIMON PROPERTY GROUP 568 GREAT MALL DRIVE
739 Tween Brands, Inc. 7/25/2020
225 W WASHINGTON ST MILPITAS, CA 95035
INDIANAPOLIS, IN 46204
Store ID Debtor Lease Counterparty and Address Property Address Rejection Date
Store ID Debtor Lease Counterparty and Address Property Address Rejection Date
PR SPRINGFIELD/DELCO LP
C/O PREIT SERVICES, LLC
ONE COMMERCE SQUARE 1250 BALTIMORE PIKE
85 Tween Brands, Inc. 7/25/2020
2005 MARKET ST, SUITE 1000 SPRINGFIELD, PA 19064
ATTN: GENERAL COUNSEL
PHILADELPHIA, PA 19103
Store ID Debtor Lease Counterparty and Address Property Address Rejection Date
RCG-ROCKWELL, LLC
ROCKWELL PLAZA 8337 NORTH ROCKWELL Ave
1274 THE DRESS BARN, INC. 7/23/2020
8337 NORTH ROCKWELL PLAZA OKLAHOMA CITY, OK 73132
ATLANTA, GA 30305
RD PALMERA, LP
C/O DIRECT DEVELOPMENT 4938 SOUTH STAPLES B9
5133 CATHERINES, INC. 7/23/2020*
5310 HARVEST HILL ROAD/SUITE 250 CORPUS CHRISTI, TX 78411
DALLAS, TX 75230
REGENCY CENTERS, LP
C/O REGENCY CENTERS CORPORATION 2476 WEST BRANDON BOULEVARD
1256 THE DRESS BARN, INC. 7/23/2020
ONE INDEPENDENT DRIVE/SUITE 114 BRANDON, FL 33511
JACKSONVILLE, FL 32202-5019
Store ID Debtor Lease Counterparty and Address Property Address Rejection Date
Sea Girt LP
c/o Federal Realty Investment Trust 2150 Rte. 35
AnnTaylor Retail, Inc. (a Florida
552 1626 East Jefferson Street Store #27F 7/23/2020
corporation)
Attention: Sylvia Korzan Sea Girt, NJ 08750
Rockville, MD 20852-4041
Store ID Debtor Lease Counterparty and Address Property Address Rejection Date
SRP, LLC
C/O HAGAN PROPERTIES, INC. 4600 SHELBYVILLE ROAD
5253 CATHERINES, INC. 7/23/2020*
12911 REAMERS ROAD LOUISVILLE, KY 40207
LOUISVILLE, KY 40245
Store ID Debtor Lease Counterparty and Address Property Address Rejection Date
SWC ARBROOK/157, JV
C/O CENCOR REALTY SERVICES, INC. 3810 SOUTH COOPER #112
5768 CATHERINES, INC. 7/23/2020*
3102 MAPLE AVENUE/SUITE 500 ARLINGTON, TX 76015
DALLAS, TX 75201
TANGER PROPERTIES, LP
3200 NORTHLINE AVE 1475 BURKHART ROAD
752 Tween Brands, Inc. 7/29/2020
SUITE 360 HOWELL, MI 48843
GREENSBORO, NC 27408
TANGER
3200 NORTHLINE AVE. 1417 TANGER MALL DRIVE
4239 LANE BRYANT #6243, INC. 8/5/2020
SUITE 360 RIVERHEAD, NY 11901
GREENSBORO, NC 27408
TANGER
3200 NORTHLINE AVENUE 1254 FORDING ISLAND ROAD
4175 LANE BRYANT #6243, INC. 8/5/2020
SUITE 360 BLUFFTON, SC 29910
GREENSBORO, NC 27408
Store ID Debtor Lease Counterparty and Address Property Address Rejection Date
Theodora W. Simons
AnnTaylor Retail, Inc. (a Florida 1700 Broadway, LLP 265-267 King St.
1870 7/23/2020
corporation) 14th Floor Charleston, SC 29401
New York, NY 10065
Store ID Debtor Lease Counterparty and Address Property Address Rejection Date
TRAHWEN, LLC
COMMERCIAL DRIVE, RT. 5A &
C/O BENDERSON DEVELOPMENT CO., INC.
6563 LANE BRYANT, INC. JUDD RD. 8/5/2020
7978 COOPER CREEK BLVD/SUITE 100
NEW HARTFORD, NY 13413
UNIVERSITY PARK, FL 34201
VF MALL, LLC
C/O WESTFIELD CORPORATION, INC. 2855 Stevens Creek Blvd
12 Tween Brands, Inc. 7/25/2020
2049 CENTURY PARK EAST/41ST FLOOR Santa Clara, CA 95050
LOS ANGELES, CA 90067
Store ID Debtor Lease Counterparty and Address Property Address Rejection Date
WG PARK, LP
C/O PREIT SERVICES, LLC
ONE COMMERCE SQUARE EASTON & OLD WELSH ROAD
6282 LANE BRYANT OF PENNSYLVANIA, INC. 8/5/2020
2005 MARKET ST, SUITE 1000 WILLOW GROVE, PA 19090
ATTN: GENERAL COUNSEL
PHILADELPHIA, PA 19103
Case 20-33113-KRH Doc 12 Filed 07/23/20 Entered 07/23/20 08:59:09 Desc Main
Document Page 43 of 43
Store ID Debtor Lease Counterparty and Address Property Address Rejection Date
WRI TRAUTMANN, LP
C/O WEINGARTEN REALTY INVESTORS 7603 SAN DARIO
4744 LANE BRYANT #6243, INC. 7/23/2020*
2600 CITADEL PLAZA DRIVE/SUITE 125 LAREDO, TX 78045
HOUSTON, TX 77008