Hearing Date: January 4, 2021 at 10:00 a.m. Objection

RLF1 24502865v.1

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

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In re: FRANCESCA’S HOLDINGS CORPORATION, et al.,1

Debtors.

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Chapter 11

Case No. 20-13076 (BLS)

Jointly Administered Hearing Date: January 4, 2021 at 10:00 a.m. Objection Deadline: December 28, 2020 at 4:00 p.m.

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DEBTORS’ MOTION FOR ENTRY OF AN ORDER (I) APPROVING (A) PROCEDURES FOR REJECTING UNEXPIRED LEASES OF NONRESIDENTIAL REAL PROPERTY, (B) ABANDONMENT OF DE MINIMIS PERSONAL PROPERTY

IN CONNECTION THEREWITH, AND (II) GRANTING RELATED RELIEF

Francesca’s Holding Corporation and its affiliated debtors and debtors in

possession (collectively, the “Debtors”) respectfully request entry of an order (i) authorizing the

Debtors to (a) implement procedures for rejecting unexpired leases of nonresidential real property

and (b) abandon de minimis personal property in connection therewith, and (ii) granting related

relief. In support of this motion, the Debtors, by and through their undersigned proposed counsel,

respectfully represent:

JURISDICTION AND VENUE

1. This Court has jurisdiction to consider this motion under 28 U.S.C. §§ 157

and 1334 and venue is proper under 28 U.S.C. §§ 1408 and 1409. This is a core proceeding under

28 U.S.C. § 157(b).2

1 The Debtors in these cases, along with the last four digits of each Debtor’s federal tax

identification number, are Francesca’s Holdings Corporation (4704), Francesca’s LLC (2500), Francesca’s Collections, Inc. (4665), and Francesca’s Services Corporation (5988). The address of the Debtors’ corporate headquarters is 8760 Clay Road, Houston, Texas 77080.

2 Pursuant to rule 9013-1(f) of the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware (the “Local Rules”), the Debtors hereby expressly confirm their consent to the entry of a final order by this Court in connection with this motion if it is later

Case 20-13076-BLS Doc 174 Filed 12/21/20 Page 1 of 18

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BACKGROUND

2. On December 3, 2020 (the “Petition Date”), each of the Debtors filed a

voluntary petition with this Court for relief under chapter 11 of title 11 of the United States Code,

§§ 101-1532, et seq. (the “Bankruptcy Code”). The Debtors continue to manage and operate their

business as debtors in possession under sections 1107(a) and 1108 of the Bankruptcy Code. On

December 8, 2020, the Court entered an order directing joint administration of the Debtors’ chapter

11 cases for procedural purposes only pursuant to rule 1015(b) of the Federal Rules of Bankruptcy

Procedure (the “Bankruptcy Rules”) and Local Rule 1015-1 [D.I. 80].

3. On December 4, 2020, the Debtors filed the Debtors’ Motion for Entry of

Interim and Final Orders (I) Authorizing the Debtors to Assume the Consulting Agreement,

(II) Approving Procedures for Store Closing Sales, and (III) Granting Related Relief [D.I. 46],

which seeks authorization and approval of, among other things, procedures pursuant to which the

Debtors shall close and wind down certain of their boutique locations through the conduct of

promotional sales at such locations (the “Store Closing Motion”). On December 16, 2020, the

Court entered an order approving the Store Closing Motion on an interim basis [D.I. 154]

4. On December 4, 2020, the Debtors also filed the Motion of Debtors for

Entry of Orders (I)(A) Approving Bidding Procedures for Sale of Substantially All of the Debtors’

Assets, (B) Approving Stalking Horse Bid Protections, (C) Scheduling Auction for, and Hearing

to Approve, Sale of Substantially All of the Debtors’ Assets, (D) Approving Form and Manner of

Notices of Sale, Auction and Sale Hearing, (E) Approving Assumption and Assignment Procedures

and (F) Granting Related Relief and (II)(A) Approving Sale of Substantially All of the Debtors’

determined that this Court, absent consent of the parties, cannot enter final orders or judgments in connection therewith consistent with Article III of the United States Constitution.


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Assets Free and Clear of All Liens, Claims, Interests and Encumbrances, (B) Approving

Assumption and Assignment of Executory Contracts and Unexpired Leases and (C) Granting

Related Relief [D.I. 45], which seeks, among other things, entry of an order approving the proposed

bidding procedures pursuant to which the Debtors will solicit and select the highest or otherwise

best offer for the sale (the “Sale”) of substantially all of the Debtors’ assets.

5. On December 11, 2020, the Office of the United States Trustee for the

District of Delaware (the “U.S. Trustee”) appointed a statutory committee of unsecured creditors

pursuant to section 1102(a)(1) of the Bankruptcy Code [D.I. 122] (the “Creditors’ Committee”).

No trustee or examiner has been appointed in the Debtors’ chapter 11 cases.

6. The Debtors are a specialty retailer that operate a nationwide-chain of

boutiques providing a diverse assortment of apparel, jewelry, accessories, and gifts. As of

December 1, 2020, the Debtors operated 558 boutiques in 45 states and the District of Columbia

and also serve their customers through www.francescas.com, their e-commerce website, and their

recently launched mobile app. Additional information on the Debtors’ business and capital

structure, as well as a description of the reasons for filing these cases, is set forth in Andrew

Clarke’s Declaration in Support of the Debtors’ Chapter 11 Petitions and First Day Pleadings

[D.I. 36] (the “First Day Declaration”).3

RELIEF REQUESTED

7. By this motion, pursuant to sections 105(a), 365, and 554 of the Bankruptcy

Code and Bankruptcy Rules 2002, 6004, 6006, and 6007, and Local Rules 2002-1 and 9013-1, the

Debtors respectfully request entry of an order, substantially in the form attached as Exhibit A (the

“Proposed Order”), (i) authorizing the Debtors to (a) implement the Lease Rejection Procedures

3 Capitalized terms used, but not defined, in this motion shall have the meanings used in the First

Day Declaration.


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(as defined below) for rejecting Specified Leases (as defined below) and (b) abandon de minimis

personal property in connection therewith and (ii) granting related relief.

BASIS FOR RELIEF REQUESTED

I. FACTS SPECIFIC TO RELIEF REQUESTED

8. As noted above, in the ordinary course of business, the Debtors operate

hundreds of retail boutiques. The Debtors do not own the real property where such stores and

offices are located and, instead, lease the real property from various counterparties. Prior to the

Petition Date, the Debtors engaged in a comprehensive review of the financial performance of the

Debtors’ boutiques and an analysis of their real estate lease portfolio. As a result of this analysis,

prior to the Petition Date, the Debtors closed 137 boutiques that were no longer viable locations

due to the difficult retail environment and changing consumer shopping behavior.4

9. As the Debtors continue to evaluate their lease portfolio, and in connection

with their efforts to preserve and maximize the value of their estates through these chapter 11

cases, the Debtors, in their business judgment, may determine that certain burdensome leases

should be rejected rather than allowing the Debtors’ estates to accrue administrative expenses

associated with such leases. Indeed, the Debtors, in consultation with their advisors, have already

identified an additional 96 boutiques that are currently underperforming relative to lease costs, and

which the Debtors intend to close and wind down during these chapter 11 cases (the “GOB

Stores”). In connection therewith, the Debtors have filed the Store Closing Motion, which seeks

authorization for the Debtors to close the GOB Stores and commence store closing sales and

4 By separate motion, the Debtors are seeking authorization to reject the leases associated with the

Debtors’ boutiques that closed prior to the Petition Date. See Debtors’ Omnibus Motion for Entry of Interim and Final Orders (I) Authorizing Debtors to (A) Reject Certain Unexpired Leases of Nonresidential Real Property Effective Nunc Pro Tunc to the Petition Date and (B) Abandon De Minimis Property in Connection Therewith, (II) Granting a Limited Waiver of Bankruptcy Rule 6006(f)(6), and (III) Granting Related Relief [D.I. 10].


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inventory liquidations at such boutiques (the “Store Closing Sales”). Upon conclusion of the Store

Closing Sales, the Debtors intend to vacate the GOB Stores and reject the leases associated with

such stores.

10. In addition to the GOB Stores and the previously closed boutiques, the

Debtors are party to hundreds of additional unexpired leases of nonresidential real property (each

a “Remaining Lease” and, collectively, the “Remaining Leases”). Many of the Remaining Leases

may be assumed by the Debtors and assigned to the ultimate purchaser of the Debtors’ assets under

section 365(a) of the Bankruptcy Code in connection with the Sale. However, a purchaser may not

want to assume all of the Remaining Leases and thus, the Debtors may need to reject certain of the

Remaining Leases prior to or after the closing date of the Sale.

A. Lease Rejection Procedures

11. To streamline the lease rejection process, the Debtors respectfully request

the Court approve and authorize the Debtors to implement the following procedures to reject

unexpired leases from time to time in their discretion (the “Lease Rejection Procedures”):

(a) Rejection Notice. To reject an unexpired lease of nonresidential real property (such leases to be rejected, including any guarantees thereof and any amendments or modifications thereto or assignments or subleases thereof, collectively, the “Specified Leases”) pursuant to section 365 of the Bankruptcy Code, the Debtors shall file with the Court a notice, substantially in the form attached to the Proposed Order as Exhibit 1 (each a “Rejection Notice”), which Rejection Notice shall contain, among other things, the following information: (i) the Specified Leases to be rejected, listed on Annex A to the Rejection Notice; (ii) the applicable Debtor or Debtors party to such Specified Leases; (iii) the street address of the Debtors’ boutique subject to the Specified Leases; (iv) the names and contact information of the non-Debtor counterparties to the Specified Leases (each a “Lease Counterparty” and together, the “Lease Counterparties”); (v) the proposed effective date of the rejection for each of the Specified Leases (as applicable, the “Rejection Date”); and (vi) the deadlines and procedures for filing an objection to the Rejection Notice (as set forth below). A Rejection Notice may list multiple Specified Leases; provided, however, that the number of Specified Leases on any Rejection Notice shall not exceed 100. All Rejection Notices will be accompanied by


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a copy of the proposed order approving the rejection of the Specified Leases set forth on the Rejection Notice (each such order a “Rejection Order”). To the extent practicable, the Debtors shall provide counsel to the Creditors’ Committee with at least two business days’ advance notice prior to the filing of any Rejection Notice.

(b) Service of Rejection Notice. The Debtors shall cause each Rejection Notice to be served by overnight mail upon (i) the Lease Counterparties affected by the Rejection Notice at the notice address set forth in the applicable Specified Leases; (ii) counsel to the Lease Counterparties, if known to the Debtors; (iii) all parties known or reasonably anticipated to have an interest in the Personal Property (as defined below) that the Debtors intend to abandon, if applicable; (iv) the U.S. Trustee; (v) counsel to the Creditors’ Committee; (vi) counsel to the DIP Agent; (vii) counsel to the agents under the Debtors’ prepetition debt instruments; and (viii) any party that has requested notice pursuant to Bankruptcy Rule 2002 and Local Rule 2002-1(b) (collectively, the “Notice Parties”).

(c) Objection Procedures. Any party objecting to the Debtors’ rejection of a Specified Lease and/or abandonment of Personal Property, including, without limitation, Lease Counterparties, shall file with the Court and serve a written objection (each an “Objection”) so as to be actually received by the following parties (collectively, the “Objection Service Parties”) no later than 14 days after the Debtors’ filing and service of the relevant Rejection Notice (such deadline, the “Objection Deadline”): (i) the Debtors, Francesca’s Holdings Corporation, 8760 Clay Road, Houston, Texas 77080, Attn: Cindy Thomassee ([email protected]); (ii) proposed counsel to the Debtors, O’Melveny & Myers LLP, Seven Times Square, New York, New York 10036, Attn: Maria J. DiConza, Esq. ([email protected]) and Diana M. Perez, Esq. ([email protected]); (iii) proposed co-counsel to the Debtors, Richard, Layton & Fingers, P.A., 920 North King Street, Wilmington, Delaware 19801, Attn: Mark D. Collins, Esq. ([email protected]), Michael J. Merchant, Esq. ([email protected]), and Jason M. Madron, Esq. ([email protected]); (iv) the U.S. Trustee, 844 King Street, Suite 2207, Wilmington, Delaware 19801, Attn: Linda J. Casey, Esq. ([email protected]); (v) counsel to the DIP Agent, Greenberg Traurig LLP, (A) 1007 North Orange Street, Suite 1200, Wilmington, DE 19801, Attn: Dennis A. Meloro, Esq. ([email protected]), and (B) MetLife Building, 200 Park Avenue, New York, NY 10166, Attn: Leo Muchnik, Esq. ([email protected]); and (vi) proposed counsel to the Creditors’ Committee, Cole Schotz P.C., 1325 6th Ave., 19th Floor, New York, New York 10019, Attn: Seth Van Aalten, Esq. ([email protected]), Justin Alberto, Esq. ([email protected]), and Sarah Carnes, Esq. ([email protected]). Each Objection must state with specificity the legal and factual grounds for the objection to the rejection of the relevant Specified Leases.


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(d) Failure to Timely File Objection. If no Objection is timely filed and

properly served as specified above with respect to a Specified Lease, the Debtors may, 24 hours after the Objection Deadline has expired, file with the Court under certification of counsel a proposed order, substantially in the form attached to the Rejection Notice as Annex B, authorizing the Debtors to reject the Specified Lease as of the Rejection Date (as set forth below), and the Court may enter such order accompanying the certification of counsel without further notice or hearing.

(e) Rejection Date. The Rejection Date for a Specified Lease shall be the latest to occur of the following: (i) the Rejection Date specified in the Rejection Notice; and (ii) the date on which the Debtors surrender possession of the store subject to the relevant Specified Lease to the Lease Counterparty by notifying the affected Lease Counterparty in writing thereof and (A) have turned over the store keys, key codes, or security codes, if any, to the Lease Counterparty or (B) have notified the affected Lease Counterparty in writing that the store keys, key codes, or security codes, if any, are not available and that the Lease Counterparty may re-key the store.

(f) Timely Objection. If an Objection is timely filed and properly served as specified above and not withdrawn or resolved, the Debtors shall schedule a hearing on such Objection and provide the Lease Counterparty and the Objection Service Parties with at least seven days’ notice of such hearing. If the Objection is overruled or withdrawn, then the Specified Lease to which the Objection relates shall be rejected as of (i) the Rejection Date, (ii) such other date to which the Debtors and the applicable Lease Counterparty may agree, or (iii) as otherwise ordered by the Court.

(g) Deadlines for Filing Claims. Claims arising out of the rejection of the Specified Lease(s) must be filed on or before the later of (i) the deadline for filing proofs of claims established by the Court in these chapter 11 cases or (ii) 30 days after the date of entry of the applicable Rejection Order. If a proof of claim is not timely filed, the claimant shall be forever barred from asserting a claim for damages arising from the rejection of the applicable Specified Lease(s). Proofs of claim and instructions for submission may be obtained on the website of the Debtors’ noticing and claims agent at https://cases.stretto.com/francescas/.

(h) Treatment of Security Deposits. If the Debtors have deposited funds with a Lease Counterparty as a security for their performance under a Specified Lease or other related arrangement (each a “Deposit”), to the extent the Lease Counterparty retains all or a portion of the Deposit as of the Petition Date, such Lease Counterparty shall not be permitted to set off, recoup, apply, or otherwise use such Deposit without the prior authorization of this Court, unless the Debtors and the applicable Lease Counterparty otherwise


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agree.

(i) Abandon Personal Property. Upon the Rejection Date, any of the Debtors’ personal property or furniture, fixtures, and equipment (collectively, the “Personal Property”) remaining on the leased premises shall be deemed abandoned by the Debtors as of the Rejection Date and the Lease Counterparty may dispose of any Personal Property, in their sole discretion, free and clear of all liens, claims, encumbrances, and interests, and without any liability to the Debtors and any third party; provided that the Debtors are prohibited from abandoning, and must remove their expense, any (i) hazardous (as such term is defined in federal, state, or local law, rule, regulation, or ordinance) materials, (ii) “personally identifiable information” (as such term is defined in section 101(41A) of the Bankruptcy Code), or (iii) business records that are necessary to conduct these chapter 11 proceedings and are not available elsewhere, at any premises subject to a nonresidential real property lease or sublease. With respect to any personal property that is leased to the Debtors by a third party or owned by a third party, such third party shall contact the Debtors and remove or cause to be removed such personal property from the leased premises prior to the Rejection Date.

12. In connection with the foregoing Lease Rejection Procedures, the Debtors

also request that they be authorized to execute and deliver all instruments and documents, and take

such other actions as may be necessary or appropriate to implement and effectuate the Lease

Rejection Procedures, and that entry of the Proposed Order be without prejudice to the Debtors’

right to seek further, other, or different relief regarding the Specified Leases.

II. LEGAL BASIS FOR RELIEF REQUESTED

A. The Lease Rejection Procedures Are an Exercise of the Debtors’ Business Judgment and Are in the Best Interests of the Debtors’ Estates and Should be Approved

13. Section 365(a) of the Bankruptcy Code provides that a debtor, “subject to

the court’s approval, may assume or reject any . . . executory contract or unexpired lease of the

debtor.” 11 U.S.C. § 365(a). The purpose of section 365(a) is “to permit the trustee or debtor-in-

possession to use valuable property of the estate and to renounce title to and abandon burdensome

property.” In re Republic Airways Holdings Inc., 547 B.R. 578, 582 (Bankr. S.D.N.Y. 2016)

(quoting Orion Pictures Corp. v. Showtime Networks, Inc. (In re Orion Pictures Corp.), 4 F.3d


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1095, 1098 (2d Cir. 1993)); see also Nat’l Labor Relations Bd. v. Bildisco & Bildisco (In re

Bildisco), 465 U.S. 513, 528 (1984) (“[T]he authority to reject an executory contract is vital to the

basic purpose to a Chapter 11 reorganization, because rejection can release the debtor’s estate from

burdensome obligations that can impede a successful reorganization.”); In re Exide Techs., 607

F.3d 957, 967 (3d Cir. 2010) (“Courts may use § 365 to free a [debtor] from burdensome duties

that hinder its reorganization”).

14. Courts generally will not second-guess a debtor’s business judgment

concerning the rejection of an executory contract or unexpired lease. The business judgment

standard is satisfied when a debtor determines that assumption or rejection will benefit the estate.

See In re Trans World Airlines, Inc., No. 01-0056, at *7–8 (Bankr. D. Del. Mar. 16, 2001) (noting

that the standard under section 365 requires consideration of the benefit of the rejection to the

debtor’s estate); see also In re TS Indus., Inc., 117 B.R. 682, 685 (Bankr. D. Utah 1990); In re Del

Grosso, 115 B.R. 136, 138 (Bankr. N.D. Ill. 1990).

15. The ability of the Debtors to reject leases of nonresidential real property in

the exercise of their business judgment is consistent with the purpose of section 365 of the

Bankruptcy Code: to enable a debtor to abandon burdensome property. As noted above, it may

become necessary for the Debtors to reject a substantial number of Remaining Leases. The Court’s

approval of the Lease Rejection Procedures will streamline this process and promote efficiency,

including by eliminating substantial legal expenses that the Debtors would otherwise incur in

connection with multiple lease rejection motions and hearings before the Court. Moreover, the

Lease Rejection Procedures are fair and reasonable to the Lease Counterparties, as they afford

such parties the opportunity to be heard with respect to the rejection of Specified Leases.


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16. Implementation of the Lease Rejection Procedures is appropriate under

section 105(a) of the Bankruptcy Code, which codifies a bankruptcy court’s inherent equitable

powers and permits a court to “issue any order, process, or judgment that is necessary or

appropriate to carry out the provisions of this title.” 11 U.S.C. § 105(a). The Court’s exercise of

its authority under sections 365(a) and 105(a) of the Bankruptcy Code is appropriately used to

carry out one of the central policies of chapter 11—i.e., to preserve value and maximize property

available to satisfy the Debtors’ stakeholders. Moreover, Courts in this District have granted

similar relief.5 For these reasons and the reasons set forth above, the Lease Rejection Procedures

should be approved.

B. The Lease Rejection Procedures Satisfy Due Process

17. The Lease Counterparties will not be prejudiced by the Lease Rejection

Procedures. Upon receipt of a Rejection Notice, the Lease Counterparties will have received

advance notice of the Debtors’ intent to reject the applicable Specified Leases as of the proposed

Rejection Date. See, e.g., In re Thane Int’l, Inc., 586 B.R. 540, 548 (Bankr. D. Del. 2018) (finding

that the Bankruptcy Code protects the interests of the non-debtor parties to executory contracts by

providing them with notice and opportunity to contest); In re Mid Region Petroleum, Inc., 111

B.R. 968, 970 (Bankr. N.D. Okla. 1990) (holding effective date of rejection of leases was the date

the trustee gave notice to lessor of intent to reject); In re Carlisle Homes, Inc., 103 B.R. 524, 535

5 See, e.g., In RTI Holding Company, LLC, Case No. 20-12456 (JTD) (Bankr. D. Del. Oct. 22,

2020) [D.I. 171] (entering an order for procedures to reject executory contracts and unexpired leases); In re RGN-Group Holdings, LLC, Case No. 20-11961 (BLS) (Bankr. D. Del. Sept. 3, 2020) [D.I. 182] (same); In re Extraction Oil & Gas, Inc., Case No. 20-11548 (CSS) (Bankr. D. Del. Jul. 13, 2020) [D.I. 253] (same); In re SFP Franchise Corp., Case No. 20-10134 (JTD) (Bankr. D. Del. Feb. 14, 2020) [D.I. 206]; In re Z Gallerie, LLC, No. 19-10488 (LSS) (Bankr. D. Del. Apr. 9, 2019) [D.I. 191] (same); In re Claire’s Stores, Inc., Case No. 18-10584 (MFW) (Bankr. D. Del. Apr. 17, 2018) [D.I. 285] (same); In re The Walking Co. Holdings, Inc., Case No. 18-10474 (LSS) (Bankr. D. Del. Apr. 4, 2018) [D.I. 185] (same); In re Charming Charlie Holdings Inc., Case No. 17-12906 (CSS) (Bankr. D. Del. Jan. 10, 2018) [D.I. 286] (same).


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(Bankr. D.N.J. 1988) (finding debtor may reject executory contract by clearly communicating

intention to reject). Additionally, the Debtors will likely vacate the premises before or upon serving

the Rejection Notice, thereby allowing the counterparties to take possession of and re-let the

property promptly. See, e.g., Adelphia Bus. Solutions, Inc. v. Abnos, 482 F.3d 602, 608–09 (2d Cir.

2007) (holding bankruptcy court did not abuse its discretion in finding balance of equities favored

making rejection of a non-residential lease of real property retroactive to date tenant vacated

premises, as tenant’s action provided landlord with opportunity to re-let premises); In re New

Valley Corp, No. 98–982, at *44–46 (D.N.J. Aug. 31, 2000) (holding bankruptcy court properly

exercised its discretion in adjusting the effective date of rejection from the date the court signed

the order authorizing rejection to the date on which the debtor vacated and the landlord exercised

control over the property); In re Amber’s Stores, 193 B.R. 819, 827 (Bankr. N.D. Tex. 1996)

(holding that lease at issue should be deemed rejected as of the petition date due to equities of the

case where debtor turned over keys and vacated premises and served motion to reject lease as soon

as possible).

18. As a procedural matter, “[a] proceeding to assume, reject, or assign an

executory contract or unexpired lease . . . is governed by Rule 9014.” Bankruptcy Rule 6006(a).

Bankruptcy Rule 9014 provides that: “In a contested matter . . . , not otherwise governed by these

rules, relief shall be requested by motion, and reasonable notice and opportunity for hearing shall

be afforded the party against whom relief is sought.” Bankruptcy Rule 9014(a). The notice and

hearing requirements for contested matters under Bankruptcy Rule 9014 are satisfied if appropriate

notice and an opportunity for hearing are given in light of the particular circumstances. See 11

U.S.C. § 102(1)(A) (defining “after notice and a hearing” or a similar phrase to mean such notice

and an opportunity for hearing “as [are] appropriate in the particular circumstances”).


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19. Under Bankruptcy Rule 6006(e), a debtor may join requests for authority to

assume and assign or reject multiple unexpired leases in one motion, subject to Bankruptcy Rule

6006(f). Fed. R. Bankr. P. 6006(e). Bankruptcy Rule 6006(f) sets forth six requirements that

motions to assume or reject multiple unexpired leases must satisfy, all of which are procedural in

nature. A motion to assume or reject multiple unexpired leases that are not between the same

parties shall:

i. state in a conspicuous place that parties receiving the omnibus motion should locate their names and their contracts or leases listed in the motion;

ii. list parties alphabetically and identify the corresponding contract or lease;

iii. specify the terms, including the curing of defaults, for each requested assumption or assignment;

iv. specify the terms, including the identity of each assignee and the adequate assurance of future performance by each assignee, for each requested assignment;

v. be numbered consecutively with other omnibus motions to assume, assign, or reject executory contracts or unexpired leases; and

vi. be limited to no more than 100 executory contracts or unexpired leases. Fed. R. Bankr. P. 6006(f). The purpose of Bankruptcy Rule 6006(f) is to protect the due process

rights of Lease Counterparties, who must be able to locate their leases and readily determine

whether their leases are being rejected.

20. The Lease Rejection Procedures satisfy Bankruptcy Rule 6006(f), including

the 100-lease limit. Moreover, in accordance with Bankruptcy Rule 6007(a), the Debtors will

provide the U.S. Trustee and other parties in interest with the requisite notice and opportunity to

object to any proposed abandonment of property.

21. The Lease Rejection Procedures protect the due process rights of the Lease

Counterparties and all other parties in interest by providing notice and an opportunity to be heard.


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In the event a Lease Counterparty (or any other party in interest) objects to the rejection of a

particular Specified Lease, the Lease Rejection Procedures specify how such objection may be

prosecuted, resolved, or heard by the Court. For the foregoing reasons, the Court should approve

the Lease Rejection Procedures, and the Debtors should be authorized to reject Specified Leases

in a manner consistent with the terms of such procedures.

C. Nunc Pro Tunc Relief if Appropriate Under the Circumstances

22. To avoid paying any unnecessary administrative expenses related to the

Specified Leases, the Debtors seek to reject the Specified Leases effective nunc pro tunc to the

Rejection Date. A court may permit such retroactive rejection to avoid unduly exposing a debtor’s

estate to unwarranted postpetition administrative or other expenses. See Thinking Machs. v. Mellon

Fin. Servs. Corp. (In re Thinking Machs. Corp.), 67 F.3d 1021, 1028 (1st Cir. 1995) (“In the section

365 context . . . bankruptcy courts may enter retroactive orders of approval, and should do so when

the balance of equities preponderates in favor of such remediation.”); In re DBSI, Inc., 409 B.R.

720, 734 n.4 (Bankr. D. Del. 2009) (“Under appropriate circumstances, [a] Court may enter a lease

rejection order with an effective date earlier than the date the order is entered.”); In re Chi-Chi’s,

Inc., 305 B.R. 396, 399 (Bankr. D. Del. 2004) (finding that “the court’s power to grant retroactive

relief is derived from the bankruptcy court’s equitable powers so long as it promotes the purposes

of §365(a)” and granting retroactive relief to the date on which the debtors surrendered the

premises to their landlords); In re Fleming Cos., Inc., 304 B.R. 85, 96 (Bankr. D. Del. 2003)

(noting retroactive rejection was permitted to the date of the motion or the date the premises was

surrendered).

23. When principles of equity so dictate, courts may permit retroactive rejection

to the date on which the counterparty to the lease was given definitive notice of the debtor’s intent

to reject. See In re KDA Grp., Inc., 574 B.R. 556, 560-61(Bankr. W.D. Pa. Sept. 20, 2017)


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(“[M]any courts within the Third Circuit have adopted the notion that a lease may be retroactively

rejected when principles of equity so dictate.”); In re Fleming Cos. Inc., 304 B.R. at 96 (“[T]o

grant nunc pro tunc rejection, the Debtors must have stated an unequivocal intent to reject the

leases.”). Courts in this jurisdiction have previously considered the question of retroactive

rejection of unexpired leases. See In re Namco Cybertainment, Inc., No. 98-00173 (PJW) (Bankr.

D. Del. Feb. 6, 1998). In Namco, the court permitted retroactive rejection on the conditions that

(a) the property (and the keys thereto) subject to a lease were surrendered with an unequivocal

statement of abandonment to the landlord or lessor, (b) the motion was filed and served on the

landlord or lessor, (c) the official committee consented to the relief requested in the motion, and

(d) the debtor acknowledged that it would not have the right to withdraw the motion prior to the

hearing.

24. Here, the balance of equities favors rejection of the Specified Leases nunc

pro tunc to the Rejection Date. Without such relief, the Debtors will potentially incur unnecessary

administrative expenses related to the Specified Leases—agreements that will provide no benefit

to the Debtors’ estates. The Debtors will have vacated and surrendered control of the premises to

the applicable lease counterparties prior to or on the Rejection Date. Further, the counterparties to

the Rejected Leases will not be unduly prejudiced if the rejection is deemed effective as of the

Rejection Date. Contemporaneously with the filing of a Rejection Notice, the Debtors will cause

notice of such Rejection Notice to be served on the Lease Counterparties, thereby allowing each

party sufficient opportunity to respond accordingly. Permitting the rejection to occur as of the

Rejection Date is consistent with prior rulings in this District.6 Accordingly, the Debtors submit

6 See, e.g., In re BL Restrs. Holding, LLC, No. 20-10156 (MFW) (Bankr. D. Del. Feb. 28, 2020) (authorizing rejection of unexpired leases effective nunc pro tunc to the petition date); In re Quicksilver Res. Inc., No. 15-10585 (LSS) (Bankr. D. Del. Apr. 15, 2015) (authorizing rejection of executory contracts effective as of specified dates); In re QCE Fin. LLC, No. 14-10543 (PJW) (Bankr. D. Del. Apr. 9, 2014) (authorizing


15 RLF1 24502865v.1

that rejection of the Specified Leases as of the Rejection Date will expedite the Debtors’ relief

from onerous obligations, and is fair and equitable to all parties in interest because the relevant

counterparties will have adequate notice of the Debtors’ intent to reject the leases and the Debtors

seek to surrender the premises as of the Rejection Date.

D. The Abandonment of De Minimis Assets Should be Approved

25. Section 554(a) of the Bankruptcy Code provides that “[a]fter notice and a

hearing, the trustee may abandon any property of the estate that is burdensome to the estate or that

is of inconsequential value and benefit to the estate.” 11 U.S.C. § 554(a); see also Hanover Ins.

Co. v. Tyco Indus., Inc., 500 F.2d 654, 657 (3d Cir. 1974) (“[A trustee] may abandon his claim to

any asset, including a cause of action, he deems less than valuable than the cost of asserting that

claim.”); In re Contract Research Solutions, Inc., No. 12-11004 (KJC), 2013 WL 1910286, at *4

(Bankr. D. Del. May 1, 2013) (“[A debtor] need only demonstrate that [it] has exercised sound

business judgment in making the determination to abandon.”) (citations omitted). The right to

abandon property is virtually unfettered, unless (a) abandonment of the property will contravene

laws designed to protect public health and safety or (b) abandonment of the property poses an

imminent threat to the public’s welfare. See In re Midlantic Nat’l Bank, 474 U.S. 494, 501 (1986).

Neither of these limitations is relevant under the facts and circumstances presented here.

26. The Debtors intend to vacate the leased premises corresponding to the

Specified Leases prior to the Rejection Date and remove their significant personal property assets

located at such premises. However, a de minimis amount of Personal Property may remain. To the

extent that any Personal Property remains, the Debtors submit that such property is inconsequential

rejection of unexpired leases effective nunc pro tunc to the petition date); In re Longview Power, LLC, No. 13-12211 (BLS) (Bankr. D. Del. Feb. 26, 2014) (authorizing rejection of unexpired leases effective nunc pro tunc to prior notice date); In re Prommis Holdings, LLC, No. 13-10551 (BLS) (Bankr. D. Del. June 14, 2013) (same).


16 RLF1 24502865v.1

to their estates and/or removal or storage of such property exceeds its value and is burdensome to

their estates. As a result, the Debtors have determined in their business judgment that abandonment

of the Personal Property is necessary and in the best interests of the Debtors’ estates, creditors, and

stakeholders. Courts in this District and other Districts have previously approved similar relief in

other chapter 11 cases involving retail debtors.7 Accordingly, to the extent that any Personal

Property remains at any leased premises corresponding to the Specified Leases, the Debtors seek

authority to abandon such assets.

RESERVATION OF RIGHTS

27. Nothing contained in this motion is an admission of the validity of any claim

against the Debtors, a waiver of the Debtors’ or any other party’s rights to dispute any claim, or

an approval or assumption of any agreement, contract, or lease under section 365 of the

Bankruptcy Code. The Debtors expressly reserve their rights to contest any claims related to the

Specified Leases.

NOTICE

28. The Debtors will provide notice of this motion by e-mail and/or overnight

delivery on the date hereof to: (i) the U.S. Trustee; (ii) the holders of the 30 largest unsecured

claims against the Debtors on a consolidated basis; (iii) proposed counsel to the Creditors’

Committee; (iv) all agents under the Debtors’ prepetition debt instruments; (v) counsel to the

7 See, e.g., In re Sports Auth. Holdings, Inc., No. 16-10527 (MFW) (Bankr. D. Del. May 3, 2016)

(authorizing the debtors to abandon any unremoved or unsold furniture, fixtures, and equipment at a closing store); In re Am. Apparel, Inc., No 15-12055 (BLS) (Bankr. D. Del. Nov. 20, 2015) (authorizing the debtors to dispose of or abandon property of their estates left in stores after the completion of store closing sales); In re RadioShack Corp., No. 15-10197 (KJC) (Bankr. D. Del. Feb. 20, 2015) (authorizing the debtors to abandon all unsold assets located at any of the closing stores); In re Great Atl. & Pac. Tea Co., Inc., No. 15-23007 (RDD) (Bankr. S.D.N.Y. Jan. 22, 2016) (authorizing the debtors to abandon furniture, fixtures, and equipment as of a retroactive rejection date); In re Metropark USA, Inc., No. 11-22866 (RDD) (Bankr. S.D.N.Y. May 5, 2011) (authorizing the debtor to reject a lease and abandon certain furniture, fixtures, and equipment on the leased premises).


17 RLF1 24502865v.1

agents under the Debtors’ prepetition debt instruments; (vi) the Internal Revenue Service; (vii) the

Securities and Exchange Commission; (viii) all Lease Counterparties; and (ix) any other party that

has requested notice under Bankruptcy Rule 2002 and Local Rule 2002-1(b). A copy of the motion

is also available on the Debtors’ case website at https://cases.stretto.com/francescas. The Debtors

submit that no other or further notice is necessary under the circumstances.

NO PRIOR MOTION

29. The Debtors have not made any prior motion for the relief sought in this

motion to this Court or any other.

[Remainder of page intentionally left blank.]


18 RLF1 24502865v.1

WHEREFORE, the Debtors respectfully request entry of the Proposed Order, substantially

in the form attached as Exhibit A, granting the relief requested in its entirety and any other relief

as is just and proper.

Dated: December 21, 2020 Wilmington, Delaware

/s/ Jason M. Madron RICHARDS, LAYTON & FINGER, P.A. Mark D. Collins (No. 2981) Michael J. Merchant (No. 3854) Jason M. Madron (No. 4431) One Rodney Square 920 North King Street Wilmington, Delaware 19801 Telephone: (302) 651-7700 Facsimile: (302) 651-7701 - and - O’MELVENY & MYERS LLP Maria J. DiConza (admitted pro hac vice) Joseph Zujkowski (admitted pro hac vice) Diana M. Perez (admitted pro hac vice) Times Square Tower Seven Times Square New York, New York 10036 Telephone: (212) 326-2000 Facsimile: (212) 326-2061 Proposed Attorneys for the Debtors and Debtors in Possession


RLF1 24502869v.1


- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - In re: FRANCESCA’S HOLDINGS CORPORATION, et al.,1 Debtors. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

x : : : : : : : : : : : : : x

Chapter 11 Case No. 20-13076 (BLS) (Jointly Administered) Hearing Date: January 4, 2021 at 10:00 a.m. Objection Deadline: December 28, 2020 at 4:00 p.m.

NOTICE OF “DEBTORS’ MOTION FOR ENTRY OF AN ORDER (I) APPROVING (A) PROCEDURES FOR REJECTING UNEXPIRED LEASES OF NONRESIDENTIAL REAL PROPERTY, (B) ABANDONMENT

OF DE MINIMIS PERSONAL PROPERTY IN CONNECTION THEREWITH, AND (II) GRANTING RELATED RELIEF” AND HEARING THEREON

PLEASE TAKE NOTICE that, on December 21, 2020, Francesca’s Holdings

Corporation and its affiliated debtors and debtors in possession (collectively, the “Debtors”),

filed the attached Debtors’ Motion for Entry of An Order (I) Approving (A) Procedures For

Rejecting Unexpired Leases of Nonresidential Real Property, (B) Abandonment of de

minimis Personal Property In Connection Therewith, and (II) Granting Related Relief (the

“Motion”) with the United States Bankruptcy Court for the District of Delaware, 824 North

Market Street, 3rd Floor, Wilmington, Delaware 19801 (the “Bankruptcy Court”).

PLEASE TAKE FURTHER NOTICE that, any responses or objections to the

Motion must be in writing and filed with the Clerk of the Bankruptcy Court, 824 North Market



Case 20-13076-BLS Doc 174-1 Filed 12/21/20 Page 1 of 3

2 RLF1 24502869v.1

Street, 3rd Floor, Wilmington, Delaware 19801 on or before December 28, 2020 at 4:00 p.m.

(Eastern Standard Time).

PLEASE TAKE FURTHER NOTICE that, if any objections to the Motion are

received, the Motion and such objections shall be considered at a hearing before The Honorable

Brendan L. Shannon, United States Bankruptcy Judge for the District of Delaware, at the

Bankruptcy Court, 824 North Market Street, 6th Floor, Courtroom 1, Wilmington, Delaware

19801 on January 4, 2021 starting at 10:00 a.m. (Eastern Standard Time).

PLEASE TAKE FURTHER NOTICE THAT, IF NO OBJECTIONS TO

THE MOTION ARE TIMELY FILED IN ACCORDANCE WITH THIS NOTICE, THE

BANKRUPTCY COURT MAY GRANT THE RELIEF REQUESTED IN THE MOTION

WITHOUT FURTHER NOTICE OR HEARING.

[Remainder of page intentionally left blank.]


3 RLF1 24502869v.1

Dated: December 21, 2020 Wilmington, Delaware

/s/ Jason M. Madron RICHARDS, LAYTON & FINGER, P.A. Mark D. Collins (No. 2981) Michael J. Merchant (No. 3854) Jason M. Madron (No. 4431) One Rodney Square 920 North King Street Wilmington, Delaware 19801 Telephone: (302) 651-7700 Facsimile: (302) 651-7701 - and - O’MELVENY & MYERS LLP Maria DiConza (admitted pro hac vice) Joseph Zujkowski (admitted pro hac vice) Diana M. Perez (admitted pro hac vice) Times Square Tower Seven Times Square New York, New York 10036 Telephone: (212) 326-2000 Facsimile: (212) 326-2061 Proposed Attorneys for the

Debtors and Debtors in Possession


RLF1 24502865v.1

Exhibit A

Proposed Order


RLF1 24502865v.1


------------------------------------------------------------ x


Debtors.

:::::::

Chapter 11

Case No. 20-13076 (BLS)

Jointly Administered

------------------------------------------------------------ x

ORDER (I) APPROVING (A) PROCEDURES FOR REJECTING UNEXPIRED LEASES OF NONRESIDENTIAL REAL PROPERTY, (B) ABANDONMENT

OF DE MINIMIS PERSONAL PROPERTY IN CONNECTION THEREWITH, AND (II) GRANTING RELATED RELIEF

Upon the Debtors’ motion (the “Motion”)2 for entry of an order (this “Order”)

(i) authorizing the Debtors to (a) implement procedures for rejecting unexpired leases of

nonresidential real property and (b) abandon de minimis personal property in connection therewith,

and (ii) granting related relief, all as more fully set forth in the Motion; and due and sufficient

notice of the Motion having been provided under the particular circumstances, and it appearing

that no other or further notice need be provided; and the Court having jurisdiction to consider the

Motion and the relief requested therein in accordance with 28 U.S.C. §§ 157 and 1334 and the

Amended Standing Order of Reference from the United States District Court for the District of

Delaware dated as of February 29, 2012; and consideration of the Motion and the relief requested

therein being a core proceeding under 28 U.S.C. § 157(b)(2); and this Court’s entry of a final order



2 Capitalized terms used, but not defined, in this Order shall have the meanings used in the Motion.


2 RLF1 24502865v.1

being consistent with Article III of the United States Constitution; and venue being proper before

this Court under 28 U.S.C. §§ 1408 and 1409; and a hearing having been scheduled and, to the

extent necessary, held to consider the relief requested in the Motion (the “Hearing”); and upon

the First Day Declaration and the record of the Hearing (if any was held) and all the proceedings

before the Court; and the Court having found and determined the relief requested in the Motion to

be in the best interests of the Debtors, their estates and creditors, and any parties in interest; and

the legal and factual bases set forth in the Motion and at the Hearing (if any was held) having

established just cause for the relief granted herein; and after due deliberation thereon and sufficient

cause appearing therefor, it is HEREBY ORDERED THAT:

1. The Motion is GRANTED as set forth herein.

2. The following Lease Rejection Procedures are hereby approved:

(a) Rejection Notice. To reject an unexpired lease of nonresidential real property (such leases to be rejected, including any guarantees thereof and any amendments or modifications thereto or assignments or subleases thereof, collectively, the “Specified Leases”) pursuant to section 365 of the Bankruptcy Code, the Debtors shall file with the Court a notice, substantially in the form attached to this Order as Exhibit 1 (each a “Rejection Notice”), which Rejection Notice shall contain, among other things, the following information: (i) the Specified Leases to be rejected, listed on Annex A to the Rejection Notice; (ii) the applicable Debtor or Debtors party to such Specified Leases; (iii) the street address of the Debtors’ boutique subject to the Specified Leases; (iv) the names and contact information of the non-Debtor counterparties to the Specified Leases (each a “Lease Counterparty” and together, the “Lease Counterparties”); (v) the proposed effective date of the rejection for each of the Specified Leases (as applicable, the “Rejection Date”); and (vi) the deadlines and procedures for filing an objection to the Rejection Notice (as set forth below). A Rejection Notice may list multiple Specified Leases; provided, however, that the number of Specified Leases on any Rejection Notice shall not exceed 100. All Rejection Notices will be accompanied by a copy of the proposed order approving the rejection of the Specified Leases set forth on the Rejection Notice (each such order a “Rejection Order”). To the extent practicable, the Debtors shall provide counsel to the Creditors’ Committee with at least two business days’ advance notice prior to the filing of any Rejection Notice.


3 RLF1 24502865v.1

(b) Service of Rejection Notice. The Debtors shall cause each Rejection Notice

to be served by overnight mail upon (i) the Lease Counterparties affected by the Rejection Notice at the notice address set forth in the applicable Specified Leases; (ii) counsel to the Lease Counterparties, if known to the Debtors; (iii) all parties known or reasonably anticipated to have an interest in the Personal Property (as defined below) that the Debtors intend to abandon, if applicable; (iv) the U.S. Trustee; (v) counsel to the Creditors’ Committee; (vi) counsel to the DIP Agent; (vii) counsel to the agents under the Debtors’ prepetition debt instruments; and (viii) any party that has requested notice pursuant to Bankruptcy Rule 2002 and Local Rule 2002-1(b) (collectively, the “Notice Parties”).

(c) Objection Procedures. Any party objecting to the Debtors’ rejection of a Specified Lease and/or abandonment of Personal Property, including, without limitation, Lease Counterparties, shall file with the Court and serve a written objection (each an “Objection”) so as to be actually received by the following parties (collectively, the “Objection Service Parties”) no later than 14 days after the Debtors’ filing and service of the relevant Rejection Notice (such deadline, the “Objection Deadline”): (i) the Debtors, Francesca’s Holdings Corporation, 8760 Clay Road, Houston, Texas 77080, Attn: Cindy Thomassee ([email protected]); (ii) proposed counsel to the Debtors, O’Melveny & Myers LLP, Seven Times Square, New York, New York 10036, Attn: Maria J. DiConza, Esq. ([email protected]) and Diana M. Perez, Esq. ([email protected]); (iii) proposed co-counsel to the Debtors, Richard, Layton & Fingers, P.A., 920 North King Street, Wilmington, Delaware 19801, Attn: Mark D. Collins, Esq. ([email protected]), Michael J. Merchant, Esq. ([email protected]), and Jason M. Madron, Esq. ([email protected]); (iv) the U.S. Trustee, 844 King Street, Suite 2207, Wilmington, Delaware 19801, Attn: Linda J. Casey, Esq. ([email protected]); (v) counsel to the DIP Agent, Greenberg Traurig LLP, (A) 1007 North Orange Street, Suite 1200, Wilmington, DE 19801, Attn: Dennis A. Meloro, Esq. ([email protected]), and (B) MetLife Building, 200 Park Avenue, New York, NY 10166, Attn: Leo Muchnik, Esq. ([email protected]); and (vi) proposed counsel to the Creditors’ Committee, Cole Schotz P.C., 1325 6th Ave., 19th Floor, New York, New York 10019, Attn: Seth Van Aalten, Esq. ([email protected]), Justin Alberto, Esq. ([email protected]), and Sarah Carnes, Esq. ([email protected]). Each Objection must state with specificity the legal and factual grounds for the objection to the rejection of the relevant Specified Leases.

(d) Failure to Timely File Objection. If no Objection is timely filed and properly served as specified above with respect to a Specified Lease, the Debtors may, 24 hours after the Objection Deadline has expired, file with the Court under certification of counsel a proposed order, substantially in


4 RLF1 24502865v.1

the form attached to the Rejection Notice as Annex B, authorizing the Debtors to reject the Specified Lease as of the Rejection Date (as set forth below), and the Court may enter such order accompanying the certification of counsel without further notice or hearing.

(e) Rejection Date. The Rejection Date for a Specified Lease shall be the latest to occur of the following: (i) the Rejection Date specified in the Rejection Notice; and (ii) the date on which the Debtors surrender possession of the store subject to the relevant Specified Lease to the Lease Counterparty by notifying the affected Lease Counterparty in writing thereof and (A) have turned over the store keys, key codes, or security codes, if any, to the Lease Counterparty or (B) have notified the affected Lease Counterparty in writing that the store keys, key codes, or security codes, if any, are not available and that the Lease Counterparty may re-key the store.

(f) Timely Objection. If an Objection is timely filed and properly served as specified above and not withdrawn or resolved, the Debtors shall schedule a hearing on such Objection and provide the Lease Counterparty and the Objection Service Parties with at least seven days’ notice of such hearing. If the Objection is overruled or withdrawn, then the Specified Lease to which the Objection relates shall be rejected as of (i) the Rejection Date, (ii) such other date to which the Debtors and the applicable Lease Counterparty may agree, or (iii) as otherwise ordered by the Court.

(g) Deadlines for Filing Claims. Claims arising out of the rejection of the Specified Lease(s) must be filed on or before the later of (i) the deadline for filing proofs of claims established by the Court in these chapter 11 cases or (ii) 30 days after the date of entry of the applicable Rejection Order. If a proof of claim is not timely filed, the claimant shall be forever barred from asserting a claim for damages arising from the rejection of the applicable Specified Lease(s). Proofs of claim and instructions for submission may be obtained on the website of the Debtors’ noticing and claims agent at https://cases.stretto.com/francescas/.

(h) Treatment of Security Deposits. If the Debtors have deposited funds with a Lease Counterparty as a security for their performance under a Specified Lease or other related arrangement (each a “Deposit”), to the extent the Lease Counterparty retains all or a portion of the Deposit as of the Petition Date, such Lease Counterparty shall not be permitted to set off, recoup, apply, or otherwise use such Deposit without the prior authorization of this Court, unless the Debtors and the applicable Lease Counterparty otherwise agree.

(i) Abandon Personal Property. Upon the Rejection Date, any of the Debtors’ personal property or furniture, fixtures, and equipment (collectively, the “Personal Property”) remaining on the leased premises shall be deemed abandoned by the Debtors as of the Rejection Date and the Lease


5 RLF1 24502865v.1

Counterparty may dispose of any Personal Property, in their sole discretion, free and clear of all liens, claims, encumbrances, and interests, and without any liability to the Debtors and any third party; provided that the Debtors are prohibited from abandoning, and must remove their expense, any (i) hazardous (as such term is defined in federal, state, or local law, rule, regulation, or ordinance) materials, (ii) “personally identifiable information” (as such term is defined in section 101(41A) of the Bankruptcy Code), or (iii) business records that are necessary to conduct these chapter 11 proceedings and are not available elsewhere, at any premises subject to a nonresidential real property lease or sublease. With respect to any personal property that is leased to the Debtors by a third party or owned by a third party, such third party shall contact the Debtors and remove or cause to be removed such personal property from the leases premises prior to the Rejection Date.

3. The Debtors are authorized, but not directed, to abandon any de minimis

Personal Property, including inventory, furniture, fixtures, equipment, and/or other material at the

leased premises as of the Rejection Date subject to the Lease Rejection Procedures. Any Personal

Property remaining at a leased premise corresponding to a Specified Lease after the effective date

of rejection of the lease shall be deemed abandoned as of the Rejection Date.

4. The rights, if any, of any Lease Counterparty to file claims for the cost of

disposal of property or other damages in connection with the Debtors’ rejection of the Specified

Leases are fully reserved, as are the rights of any party in interest to object to such claims.

5. Consistent with the limitations of section 362 of the Bankruptcy Code, and

any other applicable law, Lease Counterparties are prohibited from setting off or otherwise

utilizing any amounts deposited by the Debtors with any of the counterparties to the Specified

Leases as a security deposit or pursuant to another similar arrangement, or owed to the Debtors by

any of the counterparties under the Specified Leases or other agreements between the same parties,

without further order of this Court.


6 RLF1 24502865v.1

6. Approval of the Lease Rejection Procedures and this Order shall not prevent

the Debtors from seeking to reject or assume an unexpired lease of nonresidential real property by

separate motion.

7. Nothing in the Motion or this Order or the relief granted herein (including

any actions taken or payments made by the Debtors) is to be construed as (i) an admission of the

validity of any claim against the Debtors; (ii) an admission with respect to the validity, extent, or

perfection of any lien; (iii) a waiver of the Debtors’ rights or those of any party in interest to

dispute, contest, setoff, or recoup any claim, or assert any related rights, claims, or defenses; (iv) a

waiver of the Debtors’ rights or those of any party in interest over the validity, extent, perfection,

or possible avoidance of any lien; or (v) an approval or assumption of any agreement, contract,

program, policy, or lease under section 365 of the Bankruptcy Code.

8. Notwithstanding anything to the contrary in this Order, any payment made

or authorization hereunder shall be subject to the applicable budget and cash collateral

authorization requirements imposed on the Debtors under the terms of any order of this Court

approving the debtor-in-possession financing facility and use of cash collateral.

9. Nothing herein shall prejudice the rights of the Debtors to argue that any

unexpired lease of nonresidential real property terminated prior to the Petition Date; that any claim

for damages arising from the prospective rejection of such a lease is limited to the remedies

available under any applicable termination provision of such lease; or that any such claim is an

obligation of a third party and not that of the Debtors or their estates.

10. Notwithstanding any provision in the Bankruptcy Rules to the contrary, the

terms and conditions of this Order are immediately effective and enforceable upon its entry.


7 RLF1 24502865v.1

11. The Debtors are authorized and empowered to take all actions necessary or

appropriate to implement the relief granted in this Order.

12. This Court retains jurisdiction over all matters arising from or related to the

implementation or interpretation of this Order.


RLF1 24502865v.1

Exhibit 1

Proposed Rejection Notice


RLF1 24502865v.1


------------------------------------------------------------ x


Debtors.

:::::::

Chapter 11

Case No. 20-13076 (BLS)


------------------------------------------------------------ x

NOTICE OF REJECTION OF CERTAIN UNEXPIRED LEASES OF NONRESIDENTIAL REAL PROPERTY AND ABANDONMENT OF PERSONAL

PROPERTY IN CONNECTION THEREWITH

PLEASE TAKE NOTICE that, on December 3, 2020, Francesca’s Holdings Corporation and its affiliated debtors and debtors in possession (collectively, the “Debtors”) each filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (the “Court”).

PLEASE TAKE FURTHER NOTICE that, on [●], the Court entered an order

approving certain procedures for the rejection of the Debtors’ unexpired real property leases and the abandonment of the Debtors’ personal property located at such leased premises [D.I. [●]] (the “Lease Rejection Procedures Order”).2 An electronic copy of the Lease Rejection Procedures Order can found at https://cases.stretto.com/francescas/.

PLEASE TAKE FURTHER NOTICE that, pursuant to the terms of the Lease

Rejection Procedures Order, the Debtors hereby give notice of their intent to reject the lease(s) set forth on Annex A attached hereto (including any guarantees thereof and any amendments or modifications thereto or assignments or subleases thereof, each, a “Specified Lease” and

1 The Debtors in these cases, along with the last four digits of each Debtor’s federal tax identification number, are Francesca’s Holdings Corporation (4704), Francesca’s LLC (2500), Francesca’s Collections, Inc. (4665), and Francesca’s Services Corporation (5988). The address of the Debtors’ corporate headquarters is 8760 Clay Road, Houston, Texas 77080.

2 Capitalized terms used, but not otherwise defined, in this notice shall have the meanings used in the Lease Rejection Procedures Order.

THIS NOTICE SEEKS TO REJECT CERTAIN UNEXPIRED LEASES AND SUBLEASES OF NONRESIDENTIAL REAL PROPERTY. LANDLORDS RECEIVING THIS NOTICE SHOULD REVIEW THE SCHEDULE OF LEASES ATTACHED HERETO AS ANNEX A TO DETERMINE WHETHER THIS NOTICE AFFECTS THEIR LEASE(S)


2 RLF1 24502865v.1

collectively, the “Specified Leases”), effective as of the date of rejection set forth on Annex A (the “Rejection Date”).

PLEASE TAKE FURTHER NOTICE that any of the Debtors’ personal property

located at the premises subject to the Specified Leases, including inventory, furniture, fixtures, equipment, or other materials remaining at the premises subject to the Specified Leases as of the Rejection Date, shall be deemed abandoned by the Debtors to the applicable counterparty to the Specified Leases (each a “Lease Counterparty” and collectively, the “Lease Counterparties”).

PLEASE TAKE FURTHER NOTICE that, with respect to any personal property

that is leased to the Debtors by a third party or owned by a third party, such third party shall contact the Debtors and remove or cause to be removed such personal property from the leased premises prior to the Rejection Date. For the avoidance of doubt, if any such personal property remains on the leased premises after the Rejection Date, the Lease Counterparty may dispose of any and all such property.

PLEASE TAKE FURTHER NOTICE that if the Debtors have deposited funds

with a Lease Counterparty as a security for their performance under a Specified Lease or other related arrangement (each a “Deposit”), to the extent the Lease Counterparty retains all or a portion of the Deposit, such Lease Counterparty shall not be permitted to set off, recoup, apply, or otherwise use such Deposit without the prior authorization of the Court, unless the Debtors and the applicable Lease Counterparty otherwise agree.

PLEASE TAKE FURTHER NOTICE that any party objecting to the Debtors’

rejection of a Specified Lease and/or abandonment of personal property shall file with the Court and serve a written objection (each an “Objection”) so as to be actually received by the following parties no later than fourteen (14) day after the Debtors’ filing and service of the relevant Rejection Notice (such deadline, the “Objection Deadline”): (i) the Debtors, Francesca’s Holdings Corporation, 8760 Clay Road, Houston, Texas 77080, Attn: Cindy Thomassee ([email protected]); (ii) proposed counsel to the Debtors, O’Melveny & Myers LLP, Seven Times Square, New York, New York 10036, Attn: Maria J. DiConza, Esq. ([email protected]) and Diana M. Perez, Esq. ([email protected]); (iii) proposed co-counsel to the Debtors, Richard, Layton & Fingers, P.A., 920 North King Street, Wilmington, Delaware 19801, Attn: Mark D. Collins, Esq. ([email protected]), Michael J. Merchant, Esq. ([email protected]), and Jason M. Madron, Esq. ([email protected]); (iv) the U.S. Trustee, 844 King Street, Suite 2207, Wilmington, Delaware 19801, Attn: Linda J. Casey, Esq. ([email protected]); (v) counsel to the DIP Agent, Greenberg Traurig LLP, (A) 1007 North Orange Street, Suite 1200, Wilmington, DE 19801, Attn: Dennis A. Meloro, Esq. ([email protected]), and (B) MetLife Building, 200 Park Avenue, New York, NY 10166, Attn: Leo Muchnik, Esq. ([email protected]); and (vi) proposed counsel to the Creditors’ Committee, Cole Schotz P.C., 1325 6th Ave., 19th Floor, New York, New York 10019, Attn: Seth Van Aalten, Esq. ([email protected]), Justin Alberto, Esq. ([email protected]), and Sarah Carnes, Esq. ([email protected]). Each Objection must state with specificity the legal and factual grounds for the objection to the rejection of the relevant Specified Leases.


3 RLF1 24502865v.1

PLEASE TAKE FURTHER NOTICE that if no Objection is filed and served in compliance with the foregoing, the Debtors may submit to the Court after the Rejection Objection Deadline a proposed order approving the rejection of the Specified Leases, substantially in the form attached hereto as Annex B, and the Court may enter such order without a hearing.

PLEASE TAKE FURTHER NOTICE that, pursuant to the terms of the Lease

Rejection Procedures Order, if no Objection is properly filed and served in compliance with the foregoing, the rejection of each Lease shall become effective as of the Rejection Date, which shall be the latest to occur of the following: (i) the Rejection Date specified in the Rejection Notice; and (ii) the date on which the Debtors surrender possession of the store subject to the relevant Specified Lease to the Lease Counterparty by notifying the affected Lease Counterparty in writing thereof and (A) have turned over the store keys, key codes, or security codes, if any, to the Lease Counterparty or (B) have notified the affected Lease Counterparty in writing that the store keys, key codes, or security codes, if any, are not available and that the Lease Counterparty may re-key the store.

PLEASE TAKE FURTHER NOTICE that, if an Objection is timely filed and

properly served as specified above and not withdrawn or resolved, the Debtors shall schedule a hearing on such Objection with at least seven days’ notice of such hearing. If the Objection is overruled or withdrawn, then the Specified Lease to which the Objection relates shall be rejected as of (i) the Rejection Date, (ii) such other date to which the Debtors and the applicable Lease Counterparty may agree, or (iii) as otherwise ordered by the Court.

PLEASE TAKE FURTHER NOTICE that, to the extent you wish to assert a

claim(s) with respect to rejection of a Specified Lease, you must do so on or before the later of (i) the deadline for filing proofs of claims established by the Court in these chapter 11 cases or (ii) 30 days after the date of entry of the applicable Rejection Order. If a proof of claim is not timely filed, you will be forever barred from asserting a claim for damages arising from the rejection of the applicable Specified Lease(s). Proofs of claim and instructions for submission may be obtained on the website of the Debtors’ noticing and claims agent at https://cases.stretto.com/francescas/.

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RLF1 24502865v.1

Annex A

Specified Leases to Be Rejected


RLF1 24502865v.1

Annex B

Form of Rejection Order


RLF1 24502865v.1


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Debtors.

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Chapter 11

Case No. 20-13076 (BLS)


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ORDER (I) AUTHORIZING DEBTORS TO (A) REJECT CERTAIN UNEXPIRED LEASES OF NONRESIDENTIAL REAL PROPERTY, (B) ABANDON

DE MINIMIS PERSONAL PROPERTY IN CONNECTION THEREWITH, AND (II) GRANTING RELATED RELIEF

Pursuant to and in accordance with the Order (I) Approving (A) Procedures for

Rejecting Unexpired Leases of Nonresidential Real Property, (B) Abandonment of De Minimis

Personal Property in Connection Therewith, and (II) Granting Related Relief [D.I. [●]]

(the “Lease Rejection Procedures Order”)2 entered in the above-captioned chapter 11 cases; and

the Debtors having property filed with this Court and served on the Notice Parties a notice

(the “Rejection Notice”) of their intent to reject certain unexpired leases specified on Annex A

hereto (the “Specified Leases”) in accordance with the terms of the Lease Rejection Procedures

Order; and such notice having been adequate and appropriate under the circumstances; and it

appearing that no other or further notice need be provided; and no timely objections having been

filed to the Rejection Notice; and the Court having found that the relief requested is in the best



2 Capitalized terms used, but not defined, in this Order shall have the meanings used in the Lease Rejection Procedures Order.


2 RLF1 24502865v.1

interests of the Debtors’ estates, their creditors and other parties in interest; and after due

deliberation and sufficient cause appearing therefor, it is HEREBY ORDERED THAT:

1. The Specified Leases set forth on Annex A are hereby rejected as set forth

herein, effective as of the latest to occur of the following: (i) the date specified in the Rejection

Notice; or (ii) the date on which the Debtors surrender possession of the store subject to the

relevant Specified Lease to the Lease Counterparty by notifying the affected Lease Counterparty

in writing thereof and (A) have turned over the store keys, key codes, and security codes, if any,

to the Lease Counterparty or (B) have notified the affected Lease Counterparty in writing that the

store keys, key codes, and security codes, if any, are not available and that the Lease Counterparty

may re-key the store. (the “Rejection Date”).

2. The Debtors are authorized, but not directed, to abandon any de minimis

Personal Property, including inventory, furniture, fixtures, equipment, and/or other material at the

leased premises as of the Rejection Date. Any and all Personal Property remaining at the leased

premises as of the applicable Rejection Date shall be deemed abandoned upon the Rejection Date

without further notice or order of the Court, free and clear of all liens, claims, interests, or other

encumbrances. Any Lease Counterparty or other designee shall be free to dispose of any such

items without notice or liability to any party. The right of any Lease Counterparty, if any, to file a

claim for the costs of disposal of such property is fully reserved, as is the right of all parties in

interest to object to such claim.

3. If a Lease Counterparty or any other entity wishes to assert a claim with

respect to the rejection of a Specified Lease, such party must do so on or before the later of (i) the

deadline for filing proofs of claims established by the Court in these chapter 11 cases or (ii) 30

days after the date of entry of the applicable Rejection Order. If a proof of claim is not timely filed,


3 RLF1 24502865v.1

you will be forever barred from asserting a claim for damages arising from the rejection of the

applicable Specified Lease(s). Proofs of claim and instructions for submission may be obtained on

the website of the Debtors’ noticing and claims agent at https://cases.stretto.com/francescas/.

4. Any proofs of claim for rejection damages or other related claims, if any,

asserted by counterparties to the Leases shall be filed on or before the later of (i) the claims bar

date established by the Court in these chapter 11 cases, if any, and (ii) thirty (30) days after entry

of this Order.

5. Nothing in this Order or the relief granted herein (including any actions

taken or payments made by the Debtors) is to be construed as (i) an admission of the validity of

any claim against the Debtors; (ii) an admission with respect to the validity, extent, or perfection

of any lien; (iii) a waiver of the Debtors’ rights or those of any party in interest to dispute, contest,

setoff, or recoup any claim, or assert any related rights, claims, or defenses; (iv) a waiver of the

Debtors’ rights or those of any party in interest over the validity, extent, perfection, or possible

avoidance of any lien; or (v) an approval or assumption of any agreement, contract, program,

policy, or lease under section 365 of the Bankruptcy Code.

6. Consistent with the limitations of section 362 of the Bankruptcy Code, and

any other applicable law, counterparties to the Leases are prohibited from setting off or otherwise

utilizing any amounts deposited by the Debtors with any of the counterparties to the Leases as a

security deposit or pursuant to another similar arrangement, or owed to the Debtors by any of the

counterparties under the Leases or other agreements between the same parties, without further

order of this Court.

7. Notwithstanding anything to the contrary in this Order, any payment made

or authorization hereunder shall be subject to the applicable budget and cash collateral


4 RLF1 24502865v.1

authorization requirements imposed on the Debtors under the terms of any order of this Court

approving the debtor-in-possession financing facility and use of cash collateral.

8. Notwithstanding entry of this Order, nothing herein shall create, nor is

intended to create, any rights in favor of or enhance the status of any claim held by any party.

9. The Debtors do not waive any claims that they may have against any Lease

Counterparty, whether or not such claims arise under, are related to the prospective rejection of,

or are independent of the applicable unexpired lease(s) of nonresidential real property.

10. Nothing herein shall prejudice the rights of the Debtors to argue that any

unexpired lease of nonresidential real property terminated prior to the Petition Date; that any claim

for damages arising from the prospective rejection of such a lease is limited to the remedies

available under any applicable termination provision of such lease; or that any such claim is an

obligation of a third party and not that of the Debtors or their estates.

11. The Debtors are authorized to take all action necessary to effectuate the

relief granted in this Order.

12. This Court retains jurisdiction over all matters arising from or related to the

implementation or interpretation of this Order.


Documents

Hearing Date: January 4, 2021 at 10:00 a.m. Objection