In the United States Bankruptcy Court for the District of Delaware
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Case 20-13076-BLS Doc 733 Filed 05/22/21 Page 1 of 4 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE -------------------------------------------------------------x : In re: : Chapter 11 : FHC HOLDINGS CORPORATION, et al.,1 : Case No. 20-13076 (BLS) : Debtors. : Jointly Administered : -------------------------------------------------------------x CERTIFICATION OF COUNSEL CONCERNING STIPULATION AND AGREED ORDER BETWEEN THE DEBTORS AND THE BROOKFIELD CLAIMANTS The undersigned hereby certifies as follows: 1. On December 3, 2020 (the “Petition Date”), FHC Holdings Corporation and its affiliated debtors and debtors in possession (collectively, the “Debtors”) each filed a voluntary petition for relief under chapter 11 of title 11 of the United States Code, §§ 101-1532 (the “Bankruptcy Code”) with the United States Bankruptcy Court for the District of Delaware (the “Court”). The Debtors’ chapter 11 cases are being jointly administered pursuant to rule 1015(b) of the Federal Rules of Bankruptcy Procedure and rule 1015-1 of the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware. 2. Prior to the Petition Date, the Debtors and Brookfield Properties Retail, Inc. on behalf of Pioneer Place, LLC; Saint Louis Galleria LLC; Southwest Plaza LLC; GGP Staten Island Mall, LLC; Stonestown Shopping Center, L.P.; Baltimore Center Associates LP; Water Tower LLC; Augusta Mall LLC; FC-QIC Ballston Common Retail JV LLC; Bellis Fair Mall, 1 The Debtors in these cases, along with the last four digits of each Debtor’s federal tax identification number, are FHC Holdings Corporation (f/k/a Francesca’s Holdings Corporation) (4704), FHC LLC (f/k/a Francesca’s LLC) (2500), FHC Collections, Inc. (f/k/a Francesca’s Collections, Inc.) (4665), and FHC Services Corporation (f/k/a Francesca’s Services Corporation) (5988). The address of the legacy Debtors’ corporate headquarters is 8760 Clay Road, Houston, TX 77080. The address for correspondence related to the Debtors is c/o Saccullo Business Consulting, LLC, 27 Crimson King Drive, Bear, DE 19701. RLF1 25338649v.1 Case 20-13076-BLS Doc 733 Filed 05/22/21 Page 2 of 4 LLC; Jordan Creek Town Center, LLC; Mizner Park Venture, LLC; Newpark Mall LP; Westcoast Estates; and GGP-Northridge Fashion Center LP (collectively, the “Claimants”2) were party to 15 non-residential real property leases for certain of the Debtors’ boutiques that were closed by the Debtors prior to the Petition Date (collectively, the “Leases”). 3. Prior to the Petition Date, the Debtors terminated two of the Leases associated with the Debtors’ former boutiques located at Pioneer Place, 700 SW 5th Avenue, Portland, OR 97204 and Bellis Fair, One Bellis Fair Parkway, Bellingham, WA 98226 (together, the “Terminated Leases”). 4. On January 4, 2021, the Court entered the First Omnibus Order (I) Authorizing (A) Rejection of Certain Unexpired Leases of Nonresidential Real Property Nunc Pro Tunc to the Rejection Date and (B) Abandonment of De Minimis Property in Connection Therewith, (II) Granting a Limited Waiver of Bankruptcy Rule 6006(f)(6), and (III) Granting Related Relief [D.I. 260], which approved the rejection, of among others, the remaining 13 Leases as of the Petition Date (collectively, the “Rejected Leases”). 5. On February 17, 2021, the Court entered the Order (I) Establishing Deadlines and Procedures for Filing Proofs of Claim and Request for Payment of Postpetition Administrative Claims; (II) Approving the Form and Manner of Notices Thereof; and (III) Granting Related Relief [D.I. 471], which, among other things, established the general deadline to file proofs of claim in the Debtors’ chapter 11 cases as March 25, 2021. 6. On March 17, 2021, the Claimants filed 15 proofs of claim asserting claims for prepetition rent and rejection damages related to the Terminated Leases and the Rejected Leases (collectively, the “Proofs of Claim”). Each of the Proofs of Claim asserted by the Claimants 2 Together the Debtors and the Claimants are the “Parties”. 2 RLF1 25338649v.1 Case 20-13076-BLS Doc 733 Filed 05/22/21 Page 3 of 4 indicated that all or part of the claim was entitled to administrative priority under section 507(a)(2) of the Bankruptcy Code. 7. Upon review of the Proofs of Claim, the Debtors identified that each of the Proofs of Claim were not entitled to administrative priority under section 507(a)(2) of the Bankruptcy Code as the Proofs of Claim assert claims for prepetition rent and rejection damages related to the termination and/or rejection of the Leases. Moreover, the Claimants have acknowledged that the Proofs of Claim are not entitled to administrative priority under section 507(a)(2) of the Bankruptcy Code. 8. As a result of the foregoing, the Parties have determined that it is in each of their own best interest to stipulate to the reclassification of the Proofs of Claim. In that regard, subject to this Court’s approval, the Parties have entered into that certain Stipulation and Agreed Order Between the Debtors and the Brookfield Claimants, dated May 20, 2021 (the “Stipulation and Order”). A copy of the Stipulation and Order is attached hereto as Exhibit 1. Subject to entry by this Court, the Stipulation and Order will reclassify the Proofs of Claim as non-priority general unsecured claims while fully reserving all of the Debtors’ rights with respect to the Proofs of Claim. The Debtors believe that the approval and entry of the Stipulation and Order is in the best interests of the Debtors, their estates, their creditors, and other parties-in-interest in the Debtors’ chapter 11 cases. A copy of the Stipulation and Order has been circulated to the Office of the United States Trustee for the District of Delaware, counsel to the Official Committee of Unsecured Creditors, and the Parties, and each of the parties to whom the Stipulation and Order was circulated has indicated that it has no objection to the entry of the Stipulation and Order. WHEREFORE, the Debtors respectfully request that the Court enter the Stipulation and Order, substantially in the form attached hereto as Exhibit 1, at its earliest convenience. 3 RLF1 25338649v.1 Case 20-13076-BLS Doc 733 Filed 05/22/21 Page 4 of 4 Dated: May 22, 2021 Wilmington, Delaware /s/ Jason M. Madron RICHARDS, LAYTON & FINGER, P.A. Mark D. Collins (No. 2981) Michael J. Merchant (No. 3854) Jason M. Madron (No. 4431) One Rodney Square 920 North King Street Wilmington, Delaware 19801 Telephone: (302) 651-7700 Facsimile: (302) 651-7701 - and - O’MELVENY & MYERS LLP Maria DiConza (admitted pro hac vice) Joseph Zujkowski (admitted pro hac vice) Diana M. Perez (admitted pro hac vice) Times Square Tower Seven Times Square New York, New York 10036 Telephone: (212) 326-2000 Facsimile: (212) 326-2061 Attorneys for the Debtors and Debtors in Possession 4 RLF1 25338649v.1 Case 20-13076-BLS Doc 733-1 Filed 05/22/21 Page 1 of 9 Exhibit 1 Stipulation and Order RLF1 25338649v.1 Case 20-13076-BLS Doc 733-1 Filed 05/22/21 Page 2 of 9 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE ------------------------------------------------------------ x : In re: : Chapter 11 : FHC HOLDINGS CORPORATION, et al.,1 : Case No. 20-13076 (BLS) : Debtors. : Jointly Administered : ------------------------------------------------------------ x STIPULATION AND AGREED ORDER BETWEEN THE DEBTORS AND THE BROOKFIELD CLAIMANTS This stipulation and agreed order (this “Stipulation”) is made as of May 20, 2021, by and between FHC Holdings Corporation and its affiliated debtors and debtors in possession (collectively, the “Debtors”) and Brookfield Properties Retail, Inc. on behalf of Pioneer Place, LLC; Saint Louis Galleria LLC; Southwest Plaza LLC; GGP Staten Island Mall, LLC; Stonestown Shopping Center, L.P.; Baltimore Center Associates LP; Water Tower LLC; Augusta Mall LLC; FC-QIC Ballston Common Retail JV LLC; Bellis Fair Mall, LLC; Jordan Creek Town Center, LLC; Mizner Park Venture, LLC; Newpark Mall LP; Westcoast Estates; and GGP-Northridge Fashion Center LP (collectively, the “Claimants”). The parties hereto are individually referred to in this Stipulation as a “Party” and together referred to as “Parties.” 1 The Debtors in these cases, along with the last four digits of each Debtor’s federal tax identification number, are FHC Holdings Corporation (f/k/a Francesca’s Holdings Corporation) (4704), FHC LLC (f/k/a Francesca’s LLC) (2500), FHC Collections, Inc. (f/k/a Francesca’s Collections, Inc.) (4665), and FHC Services Corporation (f/k/a Francesca’s Services Corporation) (5988). The address of the legacy Debtors’ corporate headquarters is 8760 Clay Road, Houston, TX 77080. The address for correspondence related to the Debtors is c/o Saccullo Business Consulting, LLC, 27 Crimson King Drive, Bear, DE 19701. RLF1 25354605v.1 Case 20-13076-BLS Doc 733-1 Filed 05/22/21 Page 3 of 9 RECITALS WHEREAS, on December 3, 2020, each of the Debtors filed a voluntary petition for relief under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Court”), thereby commencing the above-captioned chapter 11 cases (the “Chapter 11 Cases”). WHEREAS, prior to the Petition Date, the Debtors and the Claimants were party to 15 non-residential real property leases for certain of the Debtors’ boutiques that were closed by the Debtors prior to the Petition Date (collectively, the “Leases”). WHEREAS, prior to the Petition Date, the Debtors terminated two of the Leases associated with the Debtors’ former boutiques located at Pioneer Place, 700 SW 5th Avenue, Portland, OR 97204 and Bellis Fair, One Bellis Fair Parkway, Bellingham, WA 98226 (together, the “Terminated Leases”). WHEREAS, on January 4, 2021, the Court entered the First Omnibus Order (I) Authorizing (A) Rejection of Certain Unexpired Leases of Nonresidential Real Property Nunc Pro Tunc to the Rejection Date and (B) Abandonment of De Minimis Property in Connection Therewith, (II) Granting a Limited Waiver of Bankruptcy Rule 6006(f)(6), and (III) Granting Related Relief [D.I.