IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

In re: MERVYN'S HOLDINGS, LLC, et al., Debtors.

Chapter 11 Case No. 08-11586 (KG) Jointly Administered

Hearing Date: TBD Objection Deadline: December 25, 2008 at 4:00 PM Related Docket No.: 1196

LIMITED OBJECTION TO DEBTORS' NOTICE OF REJECTION OF EXECUTORY CONTRACTS WITH (1) KEY EQUIPMENT FINANCE INC., (2) FIFTH THIRD LEASING COMPANY, (3) IDB LEASING, INC. AND (4) HUNTINGTON NATIONAL BANK, N.A. The Fifth Third Leasing Company ("Fifth Third"), Key Equipment Finance Inc. ("Key") and IDB Leasing, Inc. ("IDB", and collectively with Fifth Third and Key, the "Objectors") hereby file their Limited Objection to that certain Notice of Rejection of Executory Contracts with (1) Key Equipment Finance Inc., (2) Fifth Third Leasing Company, (3) IDB Leasing, Inc. and (4) Huntington National Bank, N.A. (the "Rejection Notice"), and respectfully submit as follows: 1. On May 8, 2007, Mervyn's LLC ("Mervyn's") entered into a Master Lease

Agreement (as at any time amended, the "Master Agreement") with General Electric Capital Corporation ("GECC"). Pursuant to the terms of the Master Agreement, Mervyn's leased from GECC certain equipment more particularly described in and on certain Equipment Schedules subject to the Master Agreement. In addition, Mervyn's granted a security interest to GECC in and to the equipment referenced in those certain Equipment Schedules subject to the Master Agreement, to secure the due and punctual payment of any and all of the present and future obligations of Mervyn's to GECC.

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On or about May 8, 2007, in accordance with and subject to the Master

Agreement, Fifth Third and Mervyn's entered into that certain Equipment Schedule, described as Schedule No. F001, to the Master Agreement (as at any time amended, the "Fifth Third Schedule"), whereby Mervyn's leased certain equipment, more specifically described in the Fifth Third Schedule (the "Fifth Third Collateral"), from Fifth Third. 3. Concurrent with the entry into the Master Agreement, GECC assigned all of its

rights, title and interest in and to the Fifth Third Schedule, the Fifth Third Collateral and the Master Agreement as it relates to the Fifth Third Schedule and the Fifth Third Collateral, to Fifth Third. 4. On or about May 4, 2007, Wachovia Capital Finance Corporation (Western)

("Wachovia") and Fifth Third entered into a Subordination Agreement (as at any time amended, the "Fifth Third Subordination Agreement"), whereby Wachovia and Fifth Third set forth their respective priorities with respect to certain collateral. Specifically, they agreed that Fifth Third shall have priority over Wachovia with respect to the Fifth Third Collateral. 5. On or about May 8, 2007, in accordance with and subject to the Master

Agreement, Key and Mervyn's entered into that certain Equipment Schedule No. K001 (as at any time amended, the "Key Schedule"), whereby Mervyn's leased certain equipment, more specifically described in the Key Schedule 1 (the "Key Collateral"), from Key. 6. Concurrent with the entry into the Master Agreement, GECC assigned all of its

rights, title and interest in and to the Key Schedule, Key Collateral, and the Master Agreement as it relates to the Key Schedule and the Key Collateral, to Key. 7. On or about May 4, 2007, Wachovia and Key entered into a Subordination

Agreement (as at any time amended, the "Key Subordination Agreement"), whereby they set

forth their respective priorities with respect to certain collateral. Specifically, they agreed that Key shall have priority over Wachovia with respect to the Key Collateral. 8. On or about May 8, 2007, in accordance with and subject to the Master

Agreement, IDB and Mervyn's entered into an Equipment Schedule, described as Schedule No. I001 to the Master Agreement (as at any time amended, the "IDB Schedule"), whereby Mervyn's leased certain equipment, more specifically described in the IDB Schedule (the "IDB Collateral"), from IDB. 9. Concurrent with the entry into the Master Agreement, GECC assigned all of its

rights, title and interest in and to the IDB Schedule, the IDB Collateral and the Master Agreement as it relates to the IDB Schedule and the IDB Collateral, to IDB. 10. On or about May 4, 2007, Wachovia and IDB entered into a Subordination

Agreement (as at any time amended, the "IDB Subordination Agreement"), whereby they set forth their respective priorities with respect to certain collateral. Specifically, they agreed that IDB shall have priority over Wachovia with respect to the IDB Collateral. 11. The Fifth Third Collateral, Key Collateral and IDB Collateral (collectively,

the "Objectors' Collateral") is located at many of the Debtors' store locations and can generally be described as point-of-sale equipment. 12. On or about July 29, 2008 (the "Petition Date"), Mervyn's Holdings, LLC,

Mervyn's and Mervyn's Brands, LLC (collectively, the "Debtors") filed Voluntary Petitions 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") and Orders for Relief were entered on that date. 13. On or about December 17, 2008, the Debtors filed the Rejection Notice, pursuant

to which, among other things(i) the Debtors seek to reject the Fifth Third Schedule, the Key
3

Schedule and the IDB Schedule (collectively, the "Schedules") and (ii) the Debtors seek to have the rejection date of the Schedules to be effective as of nine (9) days from the date the Rejection Notice is served (i.e., December 26, 2008 a date that is nine (9) days from December 17, 2008), but in no event later than December 31, 2008) (the "Effective Date of Rejection"). 14. The Objectors file their limited Objection with respect to the Effective Date of

Rejection and submit that the Effective Date of Rejection should be the later of: (i) December 26, 2008, or (ii) the date that Objectors' Collateral is surrendered or made available for pick up to the respective Objector. To have any other date as the rejection date would be inconsistent with the 11 U.S.C. 365 and may be subject to abuse by the Debtors (i.e., The Debtors may continue to use equipment after the Effective Date of Rejection without paying the obligations due to the particular lessor as allowed under the Bankruptcy Code.) 15. Finally, the Objectors reserves all of their rights with respect to the Objectors

Collateral to the extent that some or all of it is damaged, destroyed or missing. The Objectors also reserve the right to assert any administrative claims for the use of any of the Objectors Collateral.

CONCLUSION WHEREFORE, the Objectors respectfully request that any Order relating to the Rejection Notice provide the relief requested hereinabove and for such other and further relief as the Court deems proper. Dated: December 24, 2008 Wilmington, Delaware Respectfully submitted, MARGOLIS EDELSTEIN

/s/James E. Huggett James E. Huggett, Esq. (#3956) 750 Shipyard Drive, Suite 102 Wilmington, DE 19801 Telephone: (302) 888-1112 Facsimile: (302) 888-1119 E-mail: jhuggett@margolisedelstein.com -andDAY PITNEY LLP Ronald S. Beacher (NY - RB8837) Amish R. Doshi (NY - AD5996) (Admitted pro hac vice) 7 Times Square New York, New York 10036 Telephone: (212) 297-5800 Facsimile: (212) 916-2940 Counsel to Fifth Third Leasing Company, Key Equipment Finance Inc. and IDB Leasing, Inc.

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

In re: MERVYN'S HOLDINGS, LLC, et al., Debtors.

Chapter 11 Case No. 08-11586 (KG) Jointly Administered

CERTIFICATE OF SERVICE I, James E. Huggett, Esquire, hereby certify that on December 24, 2008, I served a copy of the following on the parties listed on the attached service list via first class pre-paid U.S. mail: 1. LIMITED OBJECTION TO DEBTORS' NOTICE OF REJECTION OF EXECUTORY CONTRACTS WITH (1) KEY EQUIPMENT FINANCE INC., (2) FIFTH THIRD LEASING COMPANY, (3) IDB LEASING, INC. AND (4) HUNTINGTON NATIONAL BANK, N.A. (Related Docket No. 1196)

___ /s/James E. Huggett James E. Huggett (#3956)

Mark D. Collins Richards Layton & Finger One Rodney Square PO Box 551 Wilmington, DE 19899 Howard S. Beltzer Wendy S. Walker Morgan Lewis & Bockius LLP 101 Park Avenue New York, NY 10178-0060 United States Trustee 844 King Street, Room 2207 Lockbox #35 Wilmington, DE 19899-0035 Jay R. Indyke Cooley Goodward Kronish LLP The Grace Building 1114 Avenue of the Americas New York, NY 10036-7798 Karen B. Skomorucha Ashby & Geddes, P.A. 500 Delaware Avenue, 8th Floor P.O. Box 1150 Wilmington, DE 19899 Neil B. Glassman Bayard, P.A. 222 Delaware Avenue, Ste 900 Wilmington, DE 19801