DDR Corp., GGP LP, Shopcore Properties, Philips International, National Retail Properties, National Realty & Development, Rouse Properties, Basser-Kaufman, Regency Centers, Aston Properties, DLC Management, Benderson Development Company and Hines Global REIT (collectively, “Landlords”) and Pappas Union City and Weingarten Realty Investors filed with the U.S. Bankruptcy Court separate objections to Toys “R” Us’ motion for entry of an order (i) establishing bidding procedures, (ii) approving the sale of certain real property and leases and (iii) granting related relief.
The Landlords assert, “In complete disregard for the clear adequate assurance requirements for Landlords found in section 365(b)(3) of the Bankruptcy Code, the Debtors do not require bidders to provide adequate assurance and do not indicate when such information would be transmitted to Landlords, if provided. Despite not providing this statutorily mandated information, the Debtors provide interested parties just 3 days to evaluate and object to the sales and assignments. This timeline is grossly inadequate and should be revised as described in this Objection.”
In addition, “Without citing to any authority, the Debtors also seek to sell real property leases to third parties or backup bidders without providing any notice to landlords (or any other party). These procedures deprive Landlords of their right to adequate assurance of the new tenant’s ability to perform and force Landlords to bear the risk that a tenant of the Debtors’ choosing cannot abide by the lease terms. Landlords cannot be blindsided by new tenants whose very presence may violate use, radius, or tenant mix restrictions….The Debtors should only be permitted to market leases at non-debtor locations with the written consent of the applicable Landlord. The Debtors have not articulated a legitimate reason for violating the Landlords’ statutorily mandated rights.”
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