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

Related Docket No. 2428

IDB LEASING INC.'S ADMINISTRATIVE EXPENSE CLAIM AND REQUEST FOR PAYMENT OF SAME IDB Leasing, Inc. ("IDB"), hereby files its request for allowance of an administrative expense claim and requests payment of same, and in support thereof respectfully submits 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. 2. On or after the entry into the Master Agreement, Mervyn's entered into an

Equipment Schedule with IDB (the "Schedule").

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Concurrent with the entry into the Master Agreement, GECC assigned all of its

rights, title and interest in and to the Schedule, the equipment subject thereto (the "Leased Equipment")1 and the Master Agreement as it relates to the Schedule (collectively, the "Lease") to IDB. 4. On or about May 4, 2007, Wachovia Capital Finance Corporation (Western)

("Wachovia") entered into a Subordination Agreement with IDB, whereby Wachovia and IDB set forth their respective priorities with respect to the Leased Equipment. Specifically, Wachovia agreed that IDB shall have priority over Wachovia with respect to the Schedule and the Leased Equipment. 5. The Leased Equipment was located at many of the Debtors' store locations and

possibly at the Debtors' headquarters. 6. 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. 7. Pursuant to an Order of this Court, on February 2, 2009, the Lease was rejected by

the Debtors (the "Rejection Order"). The Rejection Order provides, in relevant part, that the Lease is deemed rejected on the later of (i) December 26, 2008 or (ii) the date that the Leased Equipment is surrendered to IDB or made available for pick-up by IDB (the "Rejection Date"). Further, the Rejection Order provides, in relevant part, that "[IDB's] reserves [its] rights to assert

The Leased Equipment can generally be described as point-of-sale equipment.

administrative claims for the use of the [Leased Equipment]. All parties' rights are reserved with respect to any of the [Leased Equipment] that is either lost, missing or damaged." 8. Most of the Leased Equipment has been recovered by IDB. At this juncture, IDB

is not aware whether any of the Leased Equipment is lost, missing or damaged. 9. With respect to the Leased Equipment that has been recovered, the evaluation as

to whether any of the same is damaged or inoperable has not yet been completed. 10. In an abundance of caution, and as the bar date for administrative expense claims

is February 18, 2009, IDB asserts an administrative claim, in an amount to be determined, for any Leased Equipment that is lost, missing, damaged or inoperable. 11. Furthermore, the Debtors had been using the Leased Equipment since the Petition

Date through the Rejection Date, including the interim period in which the Debtors had conducted their GOB sales at the various Debtors' stores. IDB has not received all the monthly payments due under the Lease from the Petition Date to the Rejection Date. As such, IDB asserts an administrative expense claim, in an amount to be determined, for any unpaid monthly lease payments due to IDB from the Petition Date to the Rejection Date.2 12. IDB reserves its right to amend and/or supplement any of the above categories of

administrative expense claim at a later date. WHEREFORE, IDB respectfully requests an administrative expense claim, in an amount to be determined, and requests that the Debtors pay such administrative expense claim for (i) any of the Leased Equipment that is lost, missing or destroyed; (ii) any of the Leased Equipment that is damaged or inoperable; (iii) any unpaid post-petition lease payments from the
2

It should be noted that the Debtors and IDB have reached an agreement, in principle, with respect to the unpaid post-petition lease payments due to IDB under the Lease. The parties are negotiating, but have not executed a Settlement Agreement with respect to the same. The portion of the administrative expense claims relating to post-petition rents will be deemed withdrawn upon entry of a final order approving the Settlement Agreement.

Petition Date to the Rejection Date due under the Lease; and (iv) for such other and further amounts as the Court deems proper. Dated: February 17, 2009 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 IDB Leasing, Inc.