UNITED STATES BANKRUPTCY COURT DISTRICT OF DELAWARE In re: ) ) ) ) ) ) )

CHAPTER 11 Case No. 08-11586 (KG) Re: Docket Item 973

MERVYNS HOLDINGS, LLC, et al., Debtors.

OBJECTION OF THE IRVINE COMPANY TO THE MOTION OF DEBTORS AND DEBTORS IN POSSESSION FOR ORDERS (I) ESTABLISHING AUCTION PROCEDURES FOR SALE OF DEBTORS INTERESTS IN THEIR REMAINING REAL PROPERTY LEASES; (II) APPROVING AND AUTHORIZING SALE OF LEASES TO WINNING BIDDERS FREE AND CLEAR OF ALL LIENS, INTERESTS, CLAIMS AND ENCUMBRANCES; AND (III) GRANTING RELATED RELIEF

COMES NOW, The Irvine Company, a Delaware limited liability company (Irvine), by and through its undersigned counsel, and hereby objects to the MOTION OF DEBTORS AND DEBTORS IN POSSESSION FOR ORDERS (I) ESTABLISHING AUCTION PROCEDURES FOR SALE OF DEBTORS INTERESTS IN THEIR REMAINING REAL PROPERTY LEASES; (II) APPROVING AND AUTHORIZING SALE OF LEASES TO WINNING BIDDERS FREE AND CLEAR OF ALL LIENS, INTERESTS, CLAIMS AND ENCUMBRANCES; AND (III) GRANTING RELATED RELIEF (the Motion). SUMMARY (1) Under Irvines lease, Irvine enjoys the right to terminate the lease upon a

proposed assignment (subject to the debtors right to be paid for the value of the building). (2) The subject lease is a ground lease. Under the terms thereof, except in the event

of certain permitted assignments, in the event of a proposed assignment by the tenant, the landlord has the right to terminate the lease; in which case, it must pay to the debtor the

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reasonable value of the latters interest in the building. The lease provides a negotiated mechanism by which to assure that the tenant receives the full value of interest therein. (3) While Irvine believes that this issue is more properly raised in connection with the

Sales Hearing, if the lease is the subject of a successful bid, Irvine raises this issue at this juncture simply to preserve its rights and remedies. DISCUSSION Irvines Right to Terminate the Lease. (4) As noted above, Irvine objects to the Motion to the extent that it enjoys the right,

under the lease, upon a proposed assignment, to terminate the lease and pay to the debtor its economic interest in the building. Should some party attempt to obtain an assignment of the lease, as a part of this process, Irvine reserves the right to invoke this right. Irvine concedes that it may be premature to raise this issue at this point as the auction has not yet taken place. Nonetheless, Irvine raises it now in order to ensure the issue is preserved and that the Debtor, as well as any assignee, are apprized of its position in this regard. WHEREFORE, for the foregoing reasons, Irvine requests the Motion be denied in its entirety, or in the alternative, it be approved with the modifications contained herein, with such other and further relief as the Court deems just.

McCARTER & ENGLISH, LLP

Dated: November 19, 2008

/s/ William F. Taylor, Jr. William F. Taylor, Jr. (DE # 2936) Renaissance Centre 405 North King Street, 8th Floor Wilmington, DE 19899 Telephone: (302) 984-6300 Facsimile: (302) 984-6399 wtaylor@mccarter.com

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IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE __________________________________________ ) In Re: ) Chapter 11 ) MERVYNS HOLDINGS, LLC, et. al., ) Case No. 08-11586 (KG) ) Debtors. ) Jointly Administered __________________________________________) CERTIFICATE OF SERVICE I, William F. Taylor Jr., Esquire, certify that I am not less than 18 years of age, and that service of this OBJECTION OF THE IRVINE COMPANY TO MOTION OF DEBTORS AND DEBTORS IN POSSESSION FOR ORDERS (I) ESTABLISHING AUCTION PROCEDURES FOR SALE OF DEBTORS INTERESTS IN THEIR REMAINING REAL PROPERTY LEASES; (II) APPROVING AND AUTHORIZING SALE OF LEASES TO WINNING BIDDERS FREE AND CLEAR OF ALL LIENS, INTERESTS, CLAIMS AND

ENCUMBRANCES; AND (III) GRANTING RELATED RELIEF was made on November 19, 2008, upon the following counsel of record via United States First-Class Mail:

Mark D. Collins, Esq. Richards, Layton & Finger, P.A. One Rodney Square PO Box 551 Wilmington, DE 19899

Howard Beltzer, Esq. Morgan Lewis & Bockius LLP 101 Park Ave New York, NY 10178-0060

McCARTER & ENGLISH, LLP /s/ William F. Taylor, Jr. William F. Taylor, Jr. (#2936) Renaissance Centre 405 North King Street, 8th Floor Wilmington, DE 19801 (302) 984-6300 (302) 984-6399 (fax) wtaylor@mccarter.com Attorney for The Irvine Company

Dated: November 19, 2008

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