UNITED STATES BANKRUPTCY COURT 

EASTERN DISTRICT OF VIRGINIA 

Richmond Division 

In re: Chapter 11 

Toys “R” Us Property Company I, Case No. 18-31429-KLP 

 LLC, et al., Jointly Administered 

 Debtors. 

MEMORANDUM OPINION 

Before the Court is the objection of Market Plaza Limited Partnership 

(Market Plaza) to the Propco I Debtors’1 proposed assumption and 

assignment of a lease with Market Plaza (the “Objection”). Market Plaza 

objects to the Propco I Debtors’ proposed assignment of the lease to Ollie’s 

Bargain Outlet. The Court conducted an evidentiary hearing on the 

Objection on December 11, 2018. At the conclusion of the hearing, the Court 

took the matter under advisement. Following are the Court’s findings of fact 

and conclusions of law as required by Rule 7052 of the Federal Rules of 

Bankruptcy Procedure, Fed. R. Bankr. P. 7052. 

Factual and Procedural Background 

 The parties stipulated to certain undisputed facts and exhibits (the 

“Stipulations”)2 that include the following procedural history. On March 20, 

 1 An order was entered on April 24, 2018, directing the procedural consolidation and 

joint administration only of the chapter 11 cases of: Toys “R” Us Property Company 

I, LLC, Case No. 18-31429-KLP; MAP Real Estate, LLC, Case No. 18-31430-KLP; 

TRU 2005 RE I, LLC, Case No. 18-31431-KLP TRU 2005 RE II Trust, Case No. 18-

31432-KLP; Wayne Real Estate Company, LLC, Case No. 18-31433-KLP, and 

Wayne Real Estate Holding Company, LLC, Case No. 18-31428-KLP (hereinafter 

jointly referred to as the “Propco I Debtors”). Dkt. 94. 

2 Dkt. 883. 

Case 18-31429-KLP Doc 1183 Filed 02/11/19 Entered 02/11/19 16:15:01 Desc Main

 Document Page 1 of 16
2 

2018, the Propco I Debtors filed their respective voluntary petitions for relief 

under Chapter 11 of the Bankruptcy Code, 11 U.S.C. §§ 101-1532, in the 

United States Bankruptcy Court for the Eastern District of Virginia. The 

Court ordered the joint administration of the Propco I Debtors’ Chapter 11 

cases on April 24, 2018. 

 On August 24, 2018, the Propco I Debtors filed the “Motion for Entry of 

an Order (I) Establishing Bidding Procedures for the Propco I Leases, (II) 

Approving the Sale of the Propco I Leases, and (III) Granting Related Relief" 

(the “Bidding Procedures Motion”),3 which requested that the Court approve 

the bidding procedures set forth therein (the “Bidding Procedures”). On 

September 13, 2018, the Court entered the “Order (I) Establishing Bidding 

Procedures for the Propco I Leases and (II) Granting Related Relief” (the 

“Bidding Procedures Order).4 The Bidding Procedures Order approved the 

Bidding Procedures in their entirety and permitted the Propco I Debtors to 

hold an auction (the “Auction”) of several commercial leases (the “Propco I 

Leases”), with the Auction to be conducted on September 27, 2018. 

 Market Plaza, the objecting landlord, is an Arkansas limited 

partnership that serves as the landlord for a total of thirteen tenants who 

lease certain real property (the “Shopping Center”) located in North Little 

Rock, Arkansas. The parties agree that the Shopping Center constitutes a 

“shopping center” as that term is used in § 365(b)(3) of the Bankruptcy Code, 

 3 Dkt. 455. 

4 Dkt. 519. 

Case 18-31429-KLP Doc 1183 Filed 02/11/19 Entered 02/11/19 16:15:01 Desc Main

 Document Page 2 of 16
3 

11 U.S.C. § 365(b)(3).5 There are twelve permanent tenants and one seasonal 

tenant (Spirit Halloween) occupying the Shopping Center: (1) Toys “R” Us; (2) 

S&W Western Wear; (3) Men’s Wearhouse; (4) Jason’s Deli; (5) Petco; (6) 

Leslie’s Poolmart; (7) Best Buy (“Best Buy”); (8) Springhill Wine & Liquor; (9) 

Paul Mitchell; (10) Work Wear Boots; (11) Big Lots (“Big Lots”); (12) G4L; and 

(13) a seasonal tenant (collectively, the “Tenants). Out of all of the Tenants, 

Toys “R” Us has been leasing from Market Plaza in the Shopping Center for 

the longest amount of time. 

General Properties, Inc. and Handy Dan Home Improvement Centers, 

Inc., predecessors in interest to Market Plaza and Toys,6 respectively, entered 

into the lease for the space housing the Toys “R” Us store on July 25, 1980 

(the “Toys Lease”).7 The Propco I Debtors identify the space that is the 

subject of the Toys Lease as Store No. 7818 (the “Toys Premises”). The 

parties have stipulated that the Toys Lease is considered a Propco I Lease 

and that the Toys Lease is a “lease of real property” as that term is used in 

§ 365(b)(3). 

 On September 25, 2018, the Propco I Debtors filed a “Notice of 

Qualified Bidders,” stating, among other things, that Scandinavian Designs, 

 5 All subsequent references to § 365 and any subpart thereof are to 11 U.S.C. § 365. 

6 While the Toys Lease was initially executed in 1980, it has been amended multiple 

times. The “Seventh Amendment to Lease” was executed on April 20, 2010, and 

appears to be the most recent amendment. The signatories to the Seventh 

Amendment were Market Plaza and TRU 2005 RE I, LLC, one of the Propco I 

Debtors. The Court refers to the various non-landlord signatories (other than Handy 

Dan Home Improvement Centers, Inc., and its successors and assigns) to the Toys 

Lease as “Toys.” 

7 The Stipulations mistakenly state July 25, 2018, as the date of the Toys Lease. 

Case 18-31429-KLP Doc 1183 Filed 02/11/19 Entered 02/11/19 16:15:01 Desc Main

 Document Page 3 of 16
4 

Inc., was the qualified bidder for the Toys Premises.8 On September 27, 

pursuant to the Bidding Procedures Order, the Propco I Debtors conducted 

the Auction with respect to certain Propco I Leases, including the Toys Lease. 

On September 28, the Propco I Debtors filed their “Notice of Successful and 

Backup Bidder with Respect to the Auction of Certain of the Propco I Debtors’ 

Leases.” That notice stated that Ollie’s Bargain Outlet, Inc. (“Ollie’s”) was 

the successful bidder for the Toys Lease. Ollie’s successful bid was listed at 

$300,000, and the cure amount was listed at $36,571.31. There was no 

backup bidder listed.9 Market Plaza timely filed the Objection on October 5, 

2018. 

Analysis and Additional Factual Findings 

Positions of the parties 

 Market Plaza claims that assignment of the Toys Lease to Ollie’s is 

impermissible because the Propco I Debtors cannot provide adequate 

assurance of future performance as required by § 365(b)(3) and § 365(f)(2) of 

the Bankruptcy Code. Market Plaza asserts that there is an intended tenant 

mix at the Shopping Center that caters to the needs of higher-income 

customers. According to Market Plaza, the Toys Lease first established this 

tenant mix by including lease restrictions forbidding certain types of tenants. 

Market Plaza urges that while the Toys Lease is the first, and most notable, 

of its tenant leases to include such restrictions, additional use and exclusivity 

 8 Dkt. 553. 

9 Dkt. 579. 

Case 18-31429-KLP Doc 1183 Filed 02/11/19 Entered 02/11/19 16:15:01 Desc Main

 Document Page 4 of 16
5 

provisions in the leases of other Tenants further establish the intended 

tenant mix and master plan for the Shopping Center’s development.10 It 

contends that an assignment to Ollie’s would contravene these use 

restrictions and disrupt the tenant mix, in violation of § 365(b)(3)(D). Market 

Plaza also maintains that Ollie’s intended use of the premises would breach 

use restrictions contained in the Toys Lease and the leases of other Tenants, 

in violation of § 365(b)(3)(C). 

 The Propco I Debtors have responded to the Objection by pointing out 

that the Toys Lease predates all the other Tenants’ leases and arguing that 

they cannot be bound by provisions contained in other leases to which they 

did not agree. They add that there is no language in the Toys Lease 

regarding an intended tenant mix and no master agreement for the Shopping 

Center that would evidence one. The Propco I Debtors maintain that Market 

Plaza has not established that an intended tenant mix exists and, even if the 

Court were to find that one does exists, the addition of Ollie’s as a tenant 

would not disrupt it. Accordingly, the Propco I Debtors dispute the assertion 

that § 365(b)(3)(C) and § 365(b)(3)(D) prohibit the assignment. They also 

point out that if the assignment is not approved, they will lose the $300,000 

bid by Ollie’s for the Toys Lease because there is no backup bidder.11

 10 See Market Plaza’s Proposed Findings of Facts and Conclusions of Law (Dkt. 927, 

at 7-8). 

11 Dkt. 579. Market Plaza did not bid at the Auction. Tr. 47:22-25. 

Case 18-31429-KLP Doc 1183 Filed 02/11/19 Entered 02/11/19 16:15:01 Desc Main

 Document Page 5 of 16
6 

Jurisdiction 

 This Court has subject matter jurisdiction pursuant to 28 U.S.C. 

§§ 157(a) and 1334(b) and the general order of reference for the U.S. District 

Court for the Eastern District of Virginia dated August 15, 1984. This is a 

core proceeding pursuant to 28 U.S.C. §§ 157(b)(2)(A), (N) and (O). 

Section 365(b)(3)(C) 

 A party wishing to assign a lease must provide adequate assurance of 

future performance of such lease. 11 U.S.C. § 365(f)(2). Section 365(b)(3)(C) 

specifies that adequate assurance of future performance for a lease of real 

property in a shopping center must include assurance that the “assumption 

or assignment of such lease is subject to all the provisions thereof, including 

(but not limited to) provisions such as a radius, location, use, or exclusivity 

provision, and will not breach any such provision contained in any other 

lease, financing agreement, or master agreement relating to such shopping 

center.” The Fourth Circuit has held that § 365(b)(3)(C) generally “requires 

the assignee of a shopping center lease to honor a clause restricting the use of 

the premises.” Trak Auto Corp. v. West Town Ctr. LLC (In re Trak Auto 

Corp.), 367 F.3d. 237, 243 (4th Cir. 2004). However, the Fourth Circuit also 

stated that the purpose of § 365(b)(3)(C) “is to preserve the landlord’s 

bargained-for protections with respect to premises use and other matters that 

are spelled out in the lease with the debtor-tenant.” Id. at 244 (emphasis 

added). In Trak, the Fourth Circuit emphasized that it is the lease between 

Case 18-31429-KLP Doc 1183 Filed 02/11/19 Entered 02/11/19 16:15:01 Desc Main

 Document Page 6 of 16
7 

lessor and the debtor that establishes these “bargained-for protections.”12 See 

also Brea Union Plaza, I, LLC v. Toys “R” Us, Inc., No. 3:18cv419, 2018 WL 

3543056, at *3. (E.D. Va. July 23, 2018). 

Market Plaza claims that the Propco I Debtors cannot offer adequate 

assurance of future performance because Ollie’s intended use of the premises 

would violate use restrictions contained in the Toys Lease, the lease of Big 

Lots (the “Big Lots Lease”), the lease of Best Buy (the “Best Buy Lease”), and 

the leases of other Tenants. Essentially, Market Plaza seeks to have the 

Court find that Ollie’s must adhere not only to the restrictions contained in 

the Toys Lease but also those included in leases executed by other Tenants 

after the execution of the Toys Lease. 

The Toys Lease. The Toys Lease provides that it may be assigned 

without the consent of the landlord.13 Paragraph 3.1 of the rider to the Toys 

Lease prohibits the Toys Premises from being used for purposes of conducting 

 12 In Trak Auto Corp. v. West Town Ctr. LLC (In re Trak Auto Corp.), 367 F.3d. 237, 

244 (4th Cir. 2004), the court cited In re Ames Dep’t Stores, Inc., 121 B.R. 160, 165 

n.4 (Bankr. S.D.N.Y. 1990), which pointed out the 1984 amendments to § 365. It 

analyzed that “[t]he purpose of the amendments was to ensure the lessor and other 

tenants [maintain] the benefit of the original bargain with the debtor. This 

legislative history clearly shows that Congress intended Section 365(b)(3) to 

preserve a landlord's bargained-for protections expressed in the terms of the lease 

and related agreements.” Id. (internal citation omitted) (emphasis in original). The 

court further voiced concern that Section 365(b)(3) could “be transformed from a 

shield protecting a landlord's pre-bankruptcy rights into a sword allowing a landlord 

to create unilaterally various contractual provisions, i.e., a use clause, where none 

existed prior to bankruptcy.” Id. 13 Market Plaza Ex. 10, at 11. 

Case 18-31429-KLP Doc 1183 Filed 02/11/19 Entered 02/11/19 16:15:01 Desc Main

 Document Page 7 of 16
8 

the business of a bowling alley, discotheque, night club, theatre, or skating 

rink.14 Ollie’s does not intend to engage in one of these prohibited businesses. 

 The Toys Lease was amended in April of 1988, apparently in 

anticipation of its assignment to Toys. At that time, language was included 

to maintain Toys generally as the Shopping Center’s exclusive seller of toys 

and children’s clothing.15 

 Beginning with the Third Amendment to the Toys Lease in November 

of 1999, additional language was added to the Toys Lease, prohibiting 

Market Plaza from permitting any other premises in the shopping center to 

be used for certain purposes including “a store conducting sales of closeout, 

bankruptcy, fire, damaged, or floor sample merchandise . . . .”16 Market 

Plaza argues that the proposed assignment to Ollie’s would violate these use 

restrictions. This argument fails. 

 The restrictions contained in the Third Amendment are applicable only 

to other premises in the Shopping Center, not the Toys Premises.17 As the 

Fourth Circuit held in Trak Auto, § 365(b)(3)(C) requires an assignee to honor 

clauses in the lease restricting the use of “the premises” and preserves the 

landlord’s protections with respect to “premises use.” 367 F.3d. at 243-44. 

The operation of an Ollie’s store will not violate any restrictions in the Toys 

 14 Id. at 16. This prohibition also applies to assignees of the tenant. Id. at 32. 

15 Id. at 55. This exclusivity provision applies only so long as Toys “R” Us and/or 

Kids “R” Us uses the Toys Premises as a toy store or children’s clothing store. Id. at 

64. 

16 Id. at 66. 

17 Id. at 65-66. 

Case 18-31429-KLP Doc 1183 Filed 02/11/19 Entered 02/11/19 16:15:01 Desc Main

 Document Page 8 of 16
9 

Lease governing the use of the Toys Premises, the location where Ollie’s 

would be conducting business. 

 Moreover, there is no indication in the Toys Lease that the language 

cited by Market Plaza to support its claim that Ollie’s proposed use of the 

Toys Premises is prohibited was meant to implement a master plan to 

preserve a certain tenant mix for the Shopping Center, nor has Market Plaza 

presented extraneous evidence that this was the intent of the language. The 

intended purpose of these additional use restrictions was to accommodate 

Toys. This is evident from the history of dealings between Market Plaza and 

Toys, beginning with the original lease dated July 25, 1980, and culminating 

with the Seventh Amendment dated April 20, 2010,18 as documented by the 

only evidence in the record, the Toys Lease and its amendments. 

 The Toys Lease was amended numerous times to permit Market Plaza 

to lease other locations in the Shopping Center to tenants whose use may 

have violated restrictions designed to protect the Toys business model. On 

these occasions, Toys typically extracted concessions from Market Plaza, 

including additional or modified restrictions.19 There is no language in the 

amendments suggesting that any of the restrictions added to the Toys Lease 

were intended to implement a master plan for the Shopping Center or were 

 18 The Seventh Amendment to the Toys Lease permitted Market Plaza to lease a 

portion of the Shopping Center to Big Lots, a discount retailer whose use is 

essentially the same as Ollie’s intended use. Market Plaza Ex. 10, at 106. 

19 For example, the Fifth Amendment to the Toys Lease, dated March 5, 2004, 

provided that Market Plaza would pay $25,000 to Toys in exchange for a waiver of 

the use restrictions to enable Market Plaza to secure Best Buy as a tenant. Market 

Plaza Ex. 10, at 84. 

Case 18-31429-KLP Doc 1183 Filed 02/11/19 Entered 02/11/19 16:15:01 Desc Main

 Document Page 9 of 16
10 

meant to secure additional bargained-for protections that would achieve or 

maintain a particular tenant mix. Rather, their purpose was to grant the 

landlord waivers from use restrictions benefitting only Toys; Market Plaza 

obtained the waivers from Toys in order to add tenants whose use of the 

Shopping Center was at odds with those restrictions.20 

 Ollie’s intended use of the Toys Premises does not violate the 

provisions of the Toys Lease cited by Market Plaza, which addressed only the 

use of other premises in the Shopping Center and not the Toys Premises. 

The use restrictions contained in the Toys Lease were meant to protect Toys, 

not Market Plaza. The Court finds that § 365(b)(3)(C) does not prohibit an 

assignment of the Toys Lease to Ollie’s. 

The Big Lots Lease, the Best Buy Lease and other Leases. None 

of the leases of other Tenants, including the Big Lots Lease and Best Buy 

Lease, pre-date or otherwise are incorporated into the Toys Lease. 

Nevertheless, Market Plaza contends that under § 365(b)(3)(C), the Propco I 

Debtors are bound by the restrictions contained in these leases. This Court 

rejected the same argument in In re Toys “R” Us, Inc., 587 B.R. 304 (Bankr. 

E.D. Va. 2018), after concluding that the intent of § 365(b)(3)(C) is not to 

provide landlords with contractual rights extracted from subsequent leases 

with other tenants but to preserve the landlord’s bargained-for protections. 

Id. at 309-10. The District Court affirmed this decision on appeal. Brea 

 20 Ms. De Saint Felix: “[T]oys “R” Us is the main one that we have in there, showing 

the type of other tenants they do not want in the center, that they feel will not be 

helpful to their - - to their particular product.” Tr. 32:21-24. 

Case 18-31429-KLP Doc 1183 Filed 02/11/19 Entered 02/11/19 16:15:01 Desc Main

 Document Page 10 of 16
11 

Union Plaza, I, LLC v. Toys “R” Us, Inc., No. 3:18cv419, 2018 WL 3543056 

(E.D. Va. July 23, 2018). The instant case is not distinguishable from Brea.21

 The Big Lots Lease, the Best Buy Lease and the other Tenant leases 

are not subject to the requirements of § 365(b)(3)(C) because all of them were 

executed after the Toys Lease. Therefore, the Court finds that the leases of 

the other Tenants do not prohibit an assignment of the Toys Lease to Ollie’s 

pursuant to § 365(b)(3)(C). 

Section 365(b)(3)(D) 

 Section 365(b)(3)(D) of the Bankruptcy Code provides that “adequate 

assurance of future performance of a lease of real property in a shopping 

center includes adequate assurance . . . that assumption or assignment of 

 21 The Big Lots restriction includes an exception for “tenants open and operating for 

business in the Shopping Center as of the date of this Lease (or their assignees 

under those leases existing as of the date hereof).” Market Plaza Ex. 2, at 8. The 

parties offer different interpretations of this language, with the Propco I Debtors 

asserting that the language “existing as of the date hereof” refers to “leases” rather 

than “assignees.” Under the Propco I Debtors’ interpretation, they would be exempt 

from the restriction. Even though the Propco I Debtors are not a party to the Big 

Lots Lease, their interpretation is consistent with the parties’ understanding as set 

forth in the Toys Lease. The Letter Agreement between Market Plaza and Best 

Buy, which is incorporated into the Fifth Amendment to the Toys Lease dated 

March 5, 2004, includes the following: 

In the event that Landlord and Best Buy enter into the Best Buy 

Lease, notwithstanding anything in the Best Buy Lease to the 

contrary, for so long as the Toys Lease remains in force and effect 

(including any and all renewals or extensions thereof), any 

exclusives in the Best Buy Lease which would prohibit the sale, 

rental or service of any products will not apply to the premises 

being leased under the Toys Lease (“Toys Premises”), because the 

Toys Lease is prior to, and is not subject to, the Best Buy Lease and 

any exclusives therein. 

Market Plaza Ex. 10, at 99 (emphasis added). One must conclude from this 

provision that the parties generally agree that the Propco I Debtors are not 

subject to use restrictions contained in leases between Market Plaza and 

other tenants that were entered into subsequent to the Toys Lease. 

Case 18-31429-KLP Doc 1183 Filed 02/11/19 Entered 02/11/19 16:15:01 Desc Main

 Document Page 11 of 16
12 

such lease will not disrupt any tenant mix or balance in such shopping 

center.” Market Plaza contends that the Propco I Debtors cannot offer 

adequate assurance of future performance because Ollie’s tenancy would 

disrupt the tenant mix or balance in the Shopping Center. Much of the 

evidence presented by Market Plaza was intended to demonstrate that it had 

carefully developed a tenant mix that would draw upper-income shoppers to 

the Shopping Center and that the inclusion of a discount retailer such as 

Ollie’s would interfere with the synergetic relationship between existing, 

high-end tenants.22

 In order to invoke the protection of § 365(b)(3)(D), a lessor must 

establish that there was an intended tenant mix and that the mix was part of 

the bargained-for-exchange of the debtor’s and other tenants’ leases. Lasalle 

Nat'l Trust, N.A. v. Trak Auto Corp., 288 B.R. 114, 125 (E.D. Va. 2003), rev'd 

on other grounds, Trak Auto Corp. v. W. Town Ctr. LLC (In re Trak Auto 

Corp.), 367 F.3d 237 (4th Cir. 2004). Market Plaza’s evidence falls short of 

meeting this standard. 

 Market Plaza points to use restrictions in the Toys Lease, as well as to 

language included in subsequent leases with other Tenants, as evidence of an 

intended tenant mix.23 None of the language in the Toys Lease, nor in the 

 22 Ms. De Saint Felix: “If you have high-level, morely (sic) affluent customers and 

you put in a tenant that attracts a lower-income based tenant, then they are not 

going to be helping the other tenants.” Tr. 33:1-4. 

23 See Market Plaza Ex. 4, containing excerpts of language from other Tenants’ 

leases. Some provisions contain only permitted uses, some contain exclusive use 

protections, and some refer to exhibits that are not included in the exhibit. 

Case 18-31429-KLP Doc 1183 Filed 02/11/19 Entered 02/11/19 16:15:01 Desc Main

 Document Page 12 of 16
13 

leases entered into evidence, references an intended tenant mix or master 

plan for the Shopping Center. Instead, Market Plaza seeks to have the Court 

find an intended tenant mix by piecing together portions of various 

permitted, exclusive and restricted use provisions contained in the Tenants’ 

leases as they existed on May 26, 2010.24 The Court should not be called 

upon to complete this jigsaw puzzle, particularly when some of the pieces are 

missing and the Court has not been provided with a picture of how the final 

product should appear. The burden is on Market Plaza to establish the 

existence of an intended tenant mix, and that requires more than simply 

demonstrating that it has provided each of its tenants with exclusivity 

protections. 

 Similar to the purpose of this language in the Toys Lease, the use 

provisions contained in the Shopping Center’s other leases were meant to 

protect individual tenants from competition rather than establish a 

particular tenant mix. Best Buy and Big Lots, tenants now occupying the 

Shopping Center,25 are there because Market Plaza sought and obtained 

waivers of the restrictive use language contained in the Toys Lease. If the 

restrictions contained in the Toys Lease were intended to preserve a master 

plan or tenant mix, then Market Plaza presumably would have secured 

tenants that did not require a waiver from those restrictions. That it failed to 

 24 Market Plaza’s Ex. 4 provides excerpts of lease provisions from ten different 

Tenants, as those leases existed as of May 26, 2010. 

25 Market Plaza identifies Best Buy as an anchor tenant. Dkt. 927, at 10. 

Case 18-31429-KLP Doc 1183 Filed 02/11/19 Entered 02/11/19 16:15:01 Desc Main

 Document Page 13 of 16
14 

do so undermines its claim that the Toys Lease is the foundation of the 

intended tenant mix. 

 Market Plaza’s claim that its tenant mix is based on maintaining an 

“upscale shopping center” is also undermined by its actions. Big Lots, like 

Ollie’s, is a discount retailer.26 Market Plaza did not lease space to Big Lots 

because it would attract an affluent customer base but rather, by its own 

admission, because it wanted to fill the space.27 Market Plaza now seeks to 

impose a tenant mix upon the Propco I Debtors that was not negotiated with 

the parties to the Toys Lease and one that it has not imposed upon itself. 

 The fact that Market Plaza is articulating and seeking to enforce an 

intended mix and balance only now, when Market Plaza stands to gain 

financially, leads the Court to conclude that Market Plaza is driven primarily 

by the immediate goal of recovering the value of an under-market lease 

rather than by its commitment to a tenant mix and balance.28 The Court 

finds that Market Plaza has failed to establish that it has a tenant mix that 

 26 Declaration of Gerald R. Altland, ¶ 4. (Dkt. 874); Tr. 36, 9-10; Tr. 51:3-8; Dkt. 927, 

at 10. 

27 Ms. De Saint Felix: “We tried to lease this space ourself (sic); could not find a 

suitable tenant. We also then listed the property . . . . The only person they could 

come up with was Big Lots. It was the only one that would take the space. . . . So we 

had to do something for the financial part of the center, to get someone in there.” Tr. 

36:15–37:2. 

28 Market Plaza has expressed concern that an assignment of the Toys Lease to 

Ollie’s may prompt Big Lots to take action or Best Buy to consider not renewing its 

lease. Notwithstanding the designation of Ollie’s as a prohibited competitor, the 

language in the Big Lots Lease does not appear to apply to an assignment of an 

existing lease. See fn. 22, supra. (For the avoidance of doubt, the affidavit of Big 

Lots, Inc. Officer Timothy A. Johnson [Dkt. 891] has not been admitted into 

evidence.) Any concern about the potential future actions of Best Buy is speculative 

and immaterial. 

Case 18-31429-KLP Doc 1183 Filed 02/11/19 Entered 02/11/19 16:15:01 Desc Main

 Document Page 14 of 16
15 

will be disrupted by an assignment to Ollie’s, most certainly not one that was 

part of a bargained-for-exchange between the parties to the Toys Lease. See 

In re Toys “R” Us, Inc., 587 B.R. at 310 (citing In re Ames Department Stores, 

Inc., 121 B.R. 160, 165 (Bankr. S.D.N.Y. 1990) (Section 365(b)(3)(D) “must be 

interpreted to refer to contractual protections and not undefined notions of 

tenant mix.”). Therefore, Market Plaza is not entitled to the protection of 

§365(b)(3)(D). 

Conclusion 

The Propco I Debtors have provided adequate assurance of future 

performance of the Toys Lease by Ollie’s, including the adequate assurances 

required under § 365(b)(3)(C) and (D) of the Bankruptcy Code. The 

assignment will significantly benefit the creditors of the Propco I Debtors. 

Accordingly, Market Plaza’s objection to the assignment of the Toys Lease to 

Ollie’s will be overruled and the assignment will be approved. 

 A separate order will be issued. 

Signed: February 11, 2019 /s/ Keith L. Phillips 

 United States Bankruptcy Judge 

Copies: 

Jeremy S. Williams 

Kutak Rock LLP 

901 East Byrd Street, Suite 1000 

Richmond, VA 23219 

Entered on Docket: 2/11/19

Case 18-31429-KLP Doc 1183 Filed 02/11/19 Entered 02/11/19 16:15:01 Desc Main

 Document Page 15 of 16
16 

Joshua A. Sussberg, P.C. 

Kirkland & Ellis LLP 

601 Lexington Avenue 

New York, New York 10022 

Scott Lerner 

Kirkland & Ellis LLP 

300 North LaSalle 

Chicago, IL 60654 

Asif Attarwala 

Kirkland & Ellis LLP 

601 Lexington Avenue 

New York, New York 10022 

Robert S. Westermann 

Hirschler Fleischer, P.C. 

2100 East Cary Street 

Richmond, VA 23223 

Alexander R. Kalyniuk. 

Hirschler Fleischer, P.C. 

2100 East Cary Street 

Richmond, VA 23223 

Case 18-31429-KLP Doc 1183 Filed 02/11/19 Entered 02/11/19 16:15:01 Desc Main

 Document Page 16 of 16