In the United States Bankruptcy Court for the District of Delaware
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Case 18-11780-BLS Doc 408 Filed 09/20/18 Page 1 of 3 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE ) CHAPTER 11 In re: ) ) Case No. 18-11780 (BLS) Brookstone Holdings Corp, et al., ) (Jointly Administered) ) Debtors. ) Objection Deadline: September 24, 2018 at 4:00 p.m. (ET) ) Hearing Date: October 1, 2018 at 10:00 a.m. (ET) ) ) Related to Docket No. 345 LIMITED OBJECTION OF SIMON PROPERTY GROUP, L.P. TO DEBTORS’ NOTICE OF POSSIBLE ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES IN CONNECTION WITH SALE Simon Property Group, L.P. as Landlord and/or Managing Agent (“Simon”), by its undersigned attorney, hereby files its Limited Objection to the Debtors’ Notice of Possible Assumption and Assignment of Certain Executory Contracts and Unexpired Leases in Connection with Sale [Docket No. 345] (the “Notice”). In support of the same, Simon states as follows: BACKGROUND 1. Brookstone Holdings Corp., and its affiliated debtors and debtors-in-possession (collectively, the “Debtors”), filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code on August 2, 2018 (the “Petition Date”). 2. The Debtors continue to operate their business and manage their properties as debtors-in-possession pursuant to 11 U.S.C. §§ 1107(a) and 1108. 3. On September 10, 2018 Debtors filed their Notice of Possible Assumption and Assignment of Certain Executory Contracts and Unexpired Leases in Connection with Sale. This notice includes the proposed cure amounts believed to be due per the Debtors [Docket No. 345] (the “Cure Notice”). Case 18-11780-BLS Doc 408 Filed 09/20/18 Page 2 of 3 4. Simon is the managing agent and/or owner of thirty-one (31) properties listed in the Debtors’ Cure Notice for which Simon has an interest pursuant to lease agreements and/or contracts with the Debtors (collectively, the “Simon Agreements”). OBJECTION 5. Simon objects to the Debtors’ proposed cure amounts for the Leases in the Notice as they are inaccurate. Simon hereby asserts the correct amounts required to cure the Leases are set forth on Exhibit “A” attached hereto. 6. Section 365(b) provides in pertinent part as follows: (b)(1) If there has been a default in an executory contract or unexpired lease of the debtor, the trustee may not assume such contract or lease unless, at the time of assumption of such contract or lease, the trustee— (A) cures, or provides adequate assurance that the trustee will promptly cure, such default…; 7. The Notice asserts the amounts required to cure each Lease. Simon is not in agreement with the proposed amounts asserted as the notice fails to compensate Landlord for any actual pecuniary loss resulting from the bankruptcy filing. 8. Section 365(b)(1) includes compensation to landlords for sums incurred for attorneys’ fees and expenses. The Leases between Simon and Debtors provide for recovery of attorneys’ fees and expenses to Simon. 9. Further, Section 365(b)(1)(B) includes compensation to Simon for sums incurred for attorneys’ fees in connection with the bankruptcy case. Simon requests $1,000 per lease as reasonable attorneys’ fees associated with the bankruptcy and possible assumption of each Lease. The cure amounts are listed in Exhibit “A”. 2 Case 18-11780-BLS Doc 408 Filed 09/20/18 Page 3 of 3 10. Simon also objects, in part, to the assumption of any of the Leases as Debtors must take these Leases subject to any charges accrued, but not yet billed, including, but not limited to, common area maintenance, real estate taxes, utilities, overage rent or percent rent. Simon further reserves the right to supplement this Limited Objection prior to any final determination by the Court regarding assumption of the Leases, including the amount and payment required for purposes of cure under Section 365, as rent, attorneys’ fees and other charges continue to accrue. CONCLUSION For the reasons set forth above, Simon respectfully requests that this Court require that any order authorizing the assumption of the Simon Agreements affirmatively require the Debtors to pay all amounts owing thereunder through the effective date of any assumption, including attorneys’ fees and expenses; and grant Simon such further relief as it deems proper. Dated: September 20, 2018 Respectfully submitted, LAW OFFICE OF SUSAN E. KAUFMAN, LLC /s/ Susan E. Kaufman Susan E. Kaufman, (DSB#3381) 919 North Market Street, Suite 460 Wilmington, DE 19801 (302) 472-7420 / (302) 792-7420 Fax [email protected] -and- Ronald M. Tucker, Esq. Indiana Bar #11428-49 (317) 263-2346 (317) 263-7901 (FAX) e-mail address: [email protected] Attorneys for Simon Property Group, L.P. and its related entities 3 Case 18-11780-BLS Doc 408-1Exhibit "A" Filed 09/20/18 Page 1 of 2 Property ID Property Name Lease ID Store Number Charge Type ID Line Item Description Date Line Item Value Amount Due per Landlord 4821 Brea Mall BRO//1/ 123 CLZ PREPETITION / DOF 8/2/18 08/03/18 1,827.33 1,827.33 4821 Brea Mall BRO//11 123-609980 CLZ PREPETITIO DOF 8/2/18 08/03/18 32.18 32.18 4821 Brea Mall BRO//1/ 123 STB STUB RENT 08/03/18 26,496.29 26,496.29 4821 Brea Mall BRO//11 123-609980 STB STUB RENT 08/03/18 466.68 466.68 Legal Fees 1,000.00 Brea Mall Total $ 29,822.48 4822 Burlington Mall BRO//1/ 111-636238 CLZ PREPETITIO DOF 8/2/18 08/03/18 5,008.67 5,008.67 4822 Burlington Mall BRO//1/ 111-636238 STB STUB RENT 08/03/18 27,516.62 27,516.62 Legal Fees 1,000.00 Burlington Mall Total $ 33,525.29 0564 Circle Centre BRO//1/ 167-624909 CLZ PREPETITION DOF 8/2/18 08/03/18 371.12 371.12 0564 Circle Centre BRO//1/ 167-624909 STB STUB RENT 08/03/18 5,381.17 5,381.17 Legal Fees 1,000.00 Circle Centre Total $ 6,752.29 4696 Coconut Point BRO//1/ 320-628193 CLZ PREPEITITION DOF 8/2/18 08/03/18 428.02 428.02 4696 Coconut Point BRO//1/ 320-628193 STB STUB RENT 08/03/18 10,858.90 10,858.90 4696 Coconut Point BRO//1/ 320-628193 CWT Chilled Water 09/01/18 912.92 320.87 Legal Fees 1,000.00 Coconut Point Total $ 12,607.79 4823 Crystal Mall BRO//1/ 28-601957 CLZ PREPETITION DOF 8/2/18 08/03/18 189.30 189.30 4823 Crystal Mall BRO//1/ 28-601957 STB STUB RENT 08/03/18 2,744.78 2,744.78 Legal Fees 1,000.00 Crystal Mall Total $ 3,934.08 0735 Dadeland Mall BRO//1/ 387-625619 CLZ PREPETITION DOF 8/2/18 08/03/18 2,048.39 2,048.39 0735 Dadeland Mall BRO//1/ 387-625619 STB STUB RENT 08/03/18 29,701.70 29,701.70 Legal Fees 1,000.00 Dadeland Mall Total $ 32,750.09 5243 Del Amo Fashion Center BRO//11 40-626156 CLZ PREPETITIO DOF 8/2/18 08/03/18 1,503.53 1,503.53 5243 Del Amo Fashion Center BRO//11 40-626156 STB STUB RENT 08/03/18 21,801.12 21,801.12 Legal Fees 1,000.00 Del Amo Fashion Center Total $ 24,304.65 4645 Fashion Valley BRO//1/ 260-616018 CLZ PREPETITION DOF 8.2.18 08/03/18 3,571.43 3,571.43 4645 Fashion Valley BRO//1/ 260-616018 STB STUB RENT 08/03/18 51,785.67 51,785.67 Legal Fees 1,000.00 Fashion Valley Total $ 56,357.10 8544 Florida Mall BRO//1/ 182-614920 CLZ PREPETITION DOF 8.2.18 08/03/18 2,560.95 2,560.95 8544 Florida Mall BRO//1/ 182-614920 STB STUB RENT 08/03/18 37,133.80 37,133.80 Legal Fees 1,000.00 Florida Mall Total $ 40,694.75 7621 Houston Galleria BRO//11 65 CLZ PREPETITION DOF 8.2.18 08/03/18 2,084.90 2,084.90 7621 Houston Galleria BRO//11 65 STB STUB RENT 08/03/18 30,231.02 30,231.02 Legal Fees 1,000.00 Houston Galleria Total $ 34,117.92 7703 King of Prussia The Plaza BRO//1/ 00010 CLZ PREPETITION DOF 8.2.18 08/03/18 463.21 463.21 7703 King of Prussia The Plaza BRO//1/ 00010 STB STUB RENT 08/03/18 21,131.07 21,131.07 7703 King of Prussia The Plaza BRO//1/ 00010 BMR Base Minimum Rent Fixed 09/01/18 12,184.90 12,184.90 7703 King of Prussia The Plaza BRO//1/ 00010 CMP Trash Removal 09/01/18 215.74 215.74 7703 King of Prussia The Plaza BRO//1/ 00010 DWT Domestic Water 09/01/18 50.33 50.33 7703 King of Prussia The Plaza BRO//1/ 00010 ELE Electricity 09/01/18 181.20 181.20 7703 King of Prussia The Plaza BRO//1/ 00010 HCP HVAC Plant 09/01/18 746.98 746.98 7703 King of Prussia The Plaza BRO//1/ 00010 MFD Media Funding 09/01/18 354.90 354.90 7703 King of Prussia The Plaza BRO//1/ 00010 OFN Operating Costs Fixed - NEW 09/01/18 7,133.49 7,133.49 7703 King of Prussia The Plaza BRO//1/ 00010 PFD Promotion Fund 09/01/18 532.35 532.35 7703 King of Prussia The Plaza BRO//1/ 00010 RET R/E Tax 09/01/18 1,117.09 1,117.09 7703 King of Prussia The Plaza BRO//1/ 00010 XT1 State Sales Tax - Electric/Gas 09/01/18 10.87 10.87 7703 King of Prussia The Plaza BRO//1/ 00010 na 2000555 09/11/18 (19,813.13) (19,813.13) Legal Fees 1,000.00 King of Prussia The Plaza Total $ 24,309.00 4827 Lenox Square BRO//1/ 174-636236 CLZ PREPETITION DOF 8.2.18 08/03/18 2,349.82 2,349.82 4827 Lenox Square BRO//1/ 174-636236 STB STUB RENT 08/03/18 34,072.38 34,072.38 Legal Fees 1,000.00 Lenox Square Total $ 37,422.20 4666 Menlo Park Mall BRO//1/ 108-608528 CLZ PREPETITION DOF 8.2.18 08/03/18 1,755.00 1,755.00 4666 Menlo Park Mall BRO//1/ 108-608528 STB STUB RENT 08/03/18 25,447.55 25,447.55 Legal Fees 1,000.00 Menlo Park Mall Total $ 28,202.55 1540 North East Mall BRO//1/ 393-625390 CLZ PREPETITION DOF 8.2.18 08/03/18 2,099.64 2,099.64 1540 North East Mall BRO//1/ 393-625390 STB STUB RENT 08/03/18 23,738.11 23,738.11 Legal Fees 1,000.00 North East Mall Total $ 26,837.75 7603 Penn Square Mall BRO//1/ 185-636105 CLZ PREPETITION DOF 8.2.18 08/03/18 2,165.07 2,165.07 7603 Penn Square Mall BRO//1/ 185-636105 STB STUB RENT 08/03/18 31,393.53 31,393.53 Legal Fees 1,000.00 Penn Square Mall Total $ 34,558.60 7604 Pheasant Lane Mall BRO//1/ 68-605709 CLZ PREPETITION DO F8.2.18 08/03/18 5,759.98