Docket #4471 Date Filed: 1/11/2010

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

In

re: Debtors.

) ) )
) )
)

Chapter

ll
(KG)

MERVY|I'S HOLDINGS, LLC,et at.,r

Case No. 0g-11536

Jointly Administered
Re: Docket No. 4021

ORDER APPROVING STIPULATION BETWEEN DSG PRODUCTION SERVICES.INC. AND DEBTORS

AND NOW, upon consideration of the Stipulation attached hereto

cause appearing for the approval thereof,

as

Exhibit A, and good

it is hereby:

ORDERED, that the Stipulation is AppRovED; and it is further ORDERED, that DSG shall offset the Mutual Debt; and it is further ORDERED, that DSG shall pay to the Debtors the sum of $11,071.15 in immediately
available funds within ten (10) business days from the date of this Order; and it is further

ORDERED, that the Payment shall fully resolve the Objection, the DSG Response and
the Motion; and it is further

ORDERED, that the releases set forth in paragraphs 5 and 6 of the Stipulation shall be effective as of the date on which this Order has been entered and becomes a final order; and it is

fuither

' The Debtors_in_Arcse cases, along with the last four digits of their federal tax identification numbers, Mervyn's Holdings, LLC (3405), Mervyn's LLC (44s6)and Merfin's Brands, LLc (gs50).
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are

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0q/v*!+ %G 0811586100111000000000005

ORDERED, that the Court shall retain jurisdiction over the implementation and
enforcement of the Stipulation and this Order.

l ,2010 ilmington, Delaware

ATES BANKRUPTCY JUDGE

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EXHIBIT A

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IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

In re:
MERVYN'S HOLDINGS, LLC,9!
Debtors.

) &,t )
) )
)

Chapter

11

Case No. 08-115S6

(KG)

)
)

Jointly Administered
Re: Docket No.4021

STIPULATION BETWEEN DSG PRODUCTION SERVICES.INC. AI\D DEBTORS

DSG Production Services, Inc. ("DSG")

*d

the above-captioned debtors and debtors in

possession (the "Debtors") hereby stipulate as follows:

RECITALS

A.
Code").

On July 29, 2008 (the "Petition Date"), each of the Debtors filed a voluntary

petition for relief under Chapter 1l of title

1l of the United States Code (the "Bankruptcy

B.
entered into

Prior to the Petition Date, on or about March 2, 2005, DSG and the Debtor

a contract (the "Contract") whereunder DSG

agreed

to provide

services (the

"Services") of performers in television and radio commercials to be produced by the Debtor (the

"Commercials")

in exchange for the Debtor agreeing to pay

wages, payroll taxes, benefits

contributions and other fees for the performers.

C.

On or about October 6, 2008, DSG filed a proof of claim (Claim No.

392,

hereinafter the "Filed Claim") seeking, among other things, payment of 5127,241.37 on account

of prepetition Services.

The Debtors in these cases, along with the last four digits of their federal tax identification numbers, are Mervyn's Holdings, LLC (3405), Mervyn's LLC (4456) and Mervyn's Brands, LLC (3850).

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D.

In light of the Filed Claim, DSG subsequently required, and Mervyn's agreed to

provide, advance payment for any post-petition Services to be performed under the Contract. DSG's post-petition invoices were issued and paid accordingly. DSG began providing the postpetition Services, but the Debtor ceased production on the Commercials and the Services were
never fully utilized. DSG is thus currently in possession of advance payment monies totaling $138,312.52 for un-rendered post-petition Services (the "Advance"). (Amounts comprising the Filed Claim and the Advance are hereinafter collectively referred to as the "Mutua!_Deb!").

E.

On or about August 25,2009, the Debtors objected to the Filed Claim pursuant to

the Fifth Omnibus Objection (Substantive) to Certain (A) Overstated and (B) Overstated and

Misclassified Claims and Motion to Reduce and/or Reclassify Such Claims [Docket No. 3932]
(the "Objection").

F. G.

On or about September 17, 2009, DSG filed a response to the Objection [Docket

No. 39831 (the "DSG Response"). Pursuant

to DSG Production

Services, Inc.'s Motion

to

Exercise Right

of

Recoupmenr [Docket No. 4021], filed on or about September 25,2009 (the "Motion"), DSG sought permission to offset the Mutual Debt by subtracting the Filed Claim from the Advance,

leaving excess funds totaling

I 1 ,071 . I 5 that DSG would pay to the Debtors' estate. have

H.

To avoid the expense and uncertainty of litigation, the Debtors and DSG

agreed to resolve the Objection, the DSG Response and the Motion subject to the terms and

conditions set forth herein.

I.

The Debtors and DSG HEREBY STIPULATE AND AGREE as follows:

AGREEMENT
1.

The Recitals are true and correct and are incorporated herein by reference.

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2.

This stipulation (the "Stipulation") is subject to Bankruptcy Court approval and

shall be of no force and effect unless and until an order is entered by the Bankruptcy Court
approving the Stipulation and such order has become final and non-appealable.

3.

DSG shall pay to the Debtors the sum of $11,071.15 in immediately available

funds within ten (10) business days following the entry of an order approving this Stipulation
(the "Payment").
4.

The Payment shall fully resolve the Objection, the DSG Response and the

Motion.

5.

Except as otherwise provided in this Stipulation, DSG hereby forever releases and

discharges each of the Debtors from any and all claims, demands, defenses, liabilities and causes

of action of any kind, character or nature whatsoever, in law or in equity, whether

asserted or

unasserted, which DSG has or may have, now or in the future, against the Debtors relating to the

Contract and the Payment.

6.

Except as otherwise provided in this Stipulation, each Debtor hereby forever releases

and discharges DSG from any and all claims, demands, defenses, liabilities and causes of action

of any kind, character or nature whatsoever, in law or in equity, whether asserted or unasserted,
which such Debtor has or may have, now or in the future, against DSG relating to the Contract
and the Payment. For the avoidance of doubt, this release shall not apply to DSG's obligations under this Stipulation, including, without limitation, the obligation to make the Payment set forth

in paragraph 3.

7.

The terms of this Stipulation shall be binding upon (i) the Debtors, DSG and their

respective successors and assigns,

(ii) any liquidating

trustee; plan administrator; distribution

agent and./or any other responsible person appointed pursuant to any Chapter

1l plan confirmed

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in these Cases; (iii) any Chapter 11 trustee appointed in these Cases and/or (iv) any Chapter
trustee appointed or elected in these Cases.

8.

Neither the Debtors nor DSG admits any liability or wrongdoing by their

execution of this Stipulation. The terms of this Stipulation are for the sole benefit of the Debtors
and DSG and not for the benefit of any other person or entity.

9. 10.

This Stipulation may be executed in counterparts, each of which shall be deemed

an original and all of which, taken together, shall constitute one and the same Stipulation.

In the event that this Stipulation is not approved by the Bankruptcy Court or the

Order approving the Stipulation is the subject of a successful appeal, the parties shall be returned

to their positions, their respective rights, claims and defenses shall be restored and nothing in this Stipulation shall be used by either party against the other.

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11.

The Banhuptcy Court shall retain jurisdiction with respect to any and all matters

conceming this Stipulation. Dated:

Wilnrington, Delaware

4 zlo

//

Cbristopher M. Samis (No. a909) L. Katherine Good (No. 5101) RICIIARDS, LAYTON & FINGE& P.A.
One Rodney Square 920 North King Street

William F. Taylor, Jr. (No. 2936) MoCARTER & ENGLISH, LLP 405 N. King Street 8ft Floor Wilnington, Delawaro 1 9801 Telephone: (302) 984-63 13
Counsel to DSG Production Services,Inc.

Wilmingtoru Delaware 1 980 1 Tele,phone: (302) 651-7700 Facsimile: Q02) 651-77 0l

Email collins@lf.com
defranceschi@lf.com

samis@6."ogood@lf.com
and

Howard S. Beltzer Wendy S. Walker MORGAN, LEWIS & BOCKIUS LLP 101 ParkAvenue New York, New York 10178-0060 Telephone: Q12) 309-6000 Facsimile: Qlz) 309-600t Email : bb el%er @organlewis. com wwalker@morganlewis. com

Attornqtsfor

the Debtors and

Debtors tn Possession

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