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Case GLT Doc 896 Filed 08/18/17 Entered 08/18/17 10:46:21 Desc Main Document Page 1 of 5

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UNITED STATES BANKRUPTCY COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA

)

In re: ) Chapter 11

)

rue21, inc., et al.,1 ) Case No. 17-22045 (GLT) )

Debtors. ) (Jointly Administered) )

rue21, inc., et al. ) Related to Doc. Nos. 836 and 877 )

Movants, )

)

v. )

) PREIT SERVICES, LLC, as agent for )

various landlords, )

) Respondent. ) )

OBJECTION OF PREIT SERVICES, LLC, AS AGENT FOR VARIOUS LANDLORDS, TO DEBTORS’ STATED CURE AMOUNTS AND RESERVATION OF RIGHTS

PREIT Services, LLC (“PREIT”), as agent for the landlords hereinafter identified (the “PREIT Landlords”), by and through their undersigned attorneys, hereby files its objection and reservation of rights to the cure amounts set forth in the Notice of Filing of First Amended Assumed Executory Contract and Unexpired Lease Schedule (the “Cure Notice”) [Doc. No. 877], and respectfully represents in support thereof as follows:

1The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number include: rue21, inc. (1645); Rhodes Holdco, Inc. (6922); r services llc (9425); and rue services corporation (0396). The location of the Debtors’ service address is: 800 Commonwealth Drive, Warrendale, Pennsylvania 15086.

Case 17-22045-GLT Doc 896 Filed 08/18/17 Entered 08/18/17 10:46:21 Desc Main Document Page 1 of 5

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1722045170818000000000002 Docket #0896 Date Filed: 08/18/2017

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BACKGROUND

1. On May 15, 2017 (the “Petition Date”), rue21, inc. (“rue21” and, together with certain of its affiliates, the “Debtors”) filed a voluntary petition for reorganization pursuant to Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”). Since the Petition Date, the Debtors have continued to manage their properties and operate their businesses as debtors-in-possession pursuant to §§1107 and 1108 of the Bankruptcy Code.

2. PREIT is the agent for the PREIT Landlords, each of which is the lessor under a lease of nonresidential real property as to which rue 21 is the lessee (collectively, the “PREIT Leases”).

3. On August 14, 2017, the Debtors filed the Cure Notice, which reflects the Debtor’s stated cure amounts due and owing under certain leases which the Debtors propose to assume (the “Proposed Cure Amount”) in connection with the Debtors’ First Amended Joint Plan of Reorganization (the “Plan”) [Doc. No. 695].

4. PREIT does not object to the confirmation of the Plan or the assumption of the leases set forth in the Cure Notice. However, PREIT objects to the Proposed Cure Amount as it relates to Cumberland Mall Associates and sets forth the applicable cure claims for the remaining PREIT Landlords under leases which PREIT expects to be assumed under the Plan.2

2 Modifications of certain of the PREIT Leases are presently being negotiated by PREIT and the Debtors. PREIT

anticipates that such leases, as modified, will be assumed in connection with the Plan.

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5. The actual amounts required to cure defaults under the PREIT Leases as of August 15, 2017 (the “Actual Cure Amounts”), which include unpaid pre- and post-petition amounts presently due under the PREIT Leases, are illustrated in the following chart:

LANDLORD ACTUAL CLAIM AMOUNT

A. Cumberland Mall Associates $1,769.62

B. PR Jacksonville Limited Partnership $3,467.78

C. PR Logan Valley L.P. $3,822.53

D. PR Magnolia LLC $577.55

E. PR Springfield/Delco Limited Partnership

$13,401.62

F. PR Valley View Limited Partnership $417.26

THE RELIEF REQUESTED AND THE REASONS THEREFOR 6. Annexed hereto and made a part hereof as Exhibit “A” is a summary of the amounts due and owing by the Debtors under each of the PREIT Leases as of August 15, 2017. As reflected in the exhibit, the Debtors are presently indebted to the PREIT Landlords in the respective amounts set forth in the column titled “Actual Claim Amount” in the preceding paragraph. To the extent that the Debtors question any of the charges comprising the Actual Claim Amounts, PREIT will make every effort to address disputes and otherwise to reconcile the discrepancies between the Proposed Cure Amounts and the Actual Claim Amounts prior to the hearing on this matter.

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7. In order to assume the PREIT Leases, the Debtors are required to cure defaults existing under such leases pursuant to §365(b)(1)(A) of the Bankruptcy Code, which provides in relevant part that “[i]f 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 … cures, or provides adequate assurance that the trustee will promptly cure, such default…” 11U.S.C. §365(b)(1)(A).

8. Pursuant to §1129(a)(1) and (2) of the Bankruptcy Code, both the Plan and the Debtors, as proponents of the Plan, are required to comply with the applicable provisions of the Bankruptcy Code. To the extent that the implementation of the Plan is dependent upon the assumption of the relevant leases at confirmation, the Plan cannot be confirmed where the Debtors fail to satisfy their cure obligations in accordance with §365(b).

RESERVATION OF RIGHTS

9. PREIT and the PREIT Landlords specifically reserve their rights to object to any other relief sought by the Debtors in connection with the assumption of the PREIT Leases, including, without limitation, the Debtors’ proposed adequate assurance of future performance.

CONCLUSION

10. For the foregoing reasons, PREIT seeks an order of this Court fixing the Debtors’ respective cure obligations under the PREIT Leases in the amounts set forth herein (less any payments made by the Debtors on account of such sums prior to the assumption of the leases plus any additional post-petition amounts accruing under such leases through the date thereof) and directing the Debtors promptly to satisfy such amounts following the entry of an order confirming the Plan pursuant to §1129 of the Bankruptcy Code.

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WHEREFORE, PREIT Services, LLC, as agent for the PREIT Landlords, respectfully requests the entry of an order granting the relief described herein, together with such other and further relief as is just and proper.

Dated: August 18, 2017 KURTZMAN | STEADY, LLC

By: /s/ Jeffrey Kurtzman

Jeffrey Kurtzman, Esquire 401 S. 2nd Street, Suite 200 Philadelphia, PA 19147 Telephone: (215) 839-1222

Email: kurtzman@kurtzmansteady.com

Attorneys for PREIT Services, LLC

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UNITED STATES BANKRUPTCY COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA

)

In re: ) Chapter 11

)

rue21, inc., et al., ) Case No. 17-22045 (GLT) )

Debtors. ) (Jointly Administered) )

rue21, inc., et al. ) Related to Doc. Nos. 836 and 877 )

Movants, )

)

v. )

) PREIT SERVICES, LLC, as agent for )

various landlords, )

) Respondent. ) )

CERTIFICATE OF SERVICE

The undersigned hereby certifies that on August 18, 2017, he caused a copy of Objection of PREIT Services, LLC, as Agent for Various Landlords, to Debtors’ Stated Cure Amounts and Reservation of Rights to be served via the Court’s CM/ECF electronic filing system to all persons of record and/or U.S. first class mail on the attached service list.

/s/ Jeffrey Kurtzman Jeffrey Kurtzman

Case 17-22045-GLT Doc 896-2 Filed 08/18/17 Entered 08/18/17 10:46:21 Desc Certificate of Service Page 1 of 2

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SERVICE LIST

Jonathan S. Henes, P.C. Robert A. Britton George Klidonas

KIRKLAND & ELLIS, LLP 601 Lexington Avenue New York, NY 10022 Eric A. Schaffer Jared S. Roach REED SMITH, LLP 225 Fifth Avenue Pittsburgh, PA 15222 Heather Sprague

Office of the United States Trustee 1001 Liberty Avenue, Suite 970 Pittsburgh, PA 15222 Jay Indyke Cathy Herschcopf COOLEY LLP 1114 Sixth Avenue New York, NY 10036 John R. Gotaskie, Jr. Fox Rothschild, LLP

Bank of New York Mellon Center 500 Grant Street, #2500

Pittsburgh, PA 15219

Gerard Uzzi Eric Stodola

MILLBANK TWEED HADLEY & McCLOY, LLP 28 Liberty Street New York, NY 10055 Scott J. Greenberg Michael J. Cohen JONES DAY 250 Vesey Street New York, NY 10281 Julia Frost-Davies Amelia C. Joiner

MORGAN LEWIS & BOCKIUS, LLP One Federal Street

Boston, MA 02110 James D. Newell

BUCHANAN INGERSOLL & ROONEY PC One Oxford Center

301 Grant Street, 20th Floor Pittsburgh, PA 15219

Elisha Graff

SIMPSON THRACHER & BARTLETT LLP 425 Lexington Avenue

New York, NY 10017

Case 17-22045-GLT Doc 896-2 Filed 08/18/17 Entered 08/18/17 10:46:21 Desc Certificate of Service Page 2 of 2

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