Robert M. Marino, Esq. VSB #26076 

Redmon, Peyton & Braswell, LLP 

510 King Street, Suite 301 

Alexandria, Virginia 22314-3143 

Phone: 703-879-2676 (direct) 

Facsimile: 703-684-5109 

Email: rmmarino@rpb-law.com 

Counsel for CaaStle Inc.

IN THE UNITED STATES BANKRUPTCY COURT 

FOR THE EASTERN DISTRICT OF VIRGINIA 

Alexandria Division 

 

 ) 

In re: ) Chapter 11 

CHINOS HOLDINGS, INC. et al., ) Case No. 20-32181-KLP 

Debtors.1

 ) (Jointly Administered) 

 ) 

 ) 

CAASTLE INC., ) 

 Movant, ) 

v. ) Relief from Stay 

MADEWELL INC., ) 

 Respondent. ) 

 ) 

MOTION FOR RELIEF FROM THE AUTOMATIC STAY 

NOTICE 

Your rights may be affected. You should read these papers carefully and discuss them with your 

attorney, if you have one on this bankruptcy case. (If you do not have an attorney, you may wish to 

consult one.) 

If you do not wish the Court to grant the relief sought in this motion, or if you want the court to 

consider your views on this motion, then on or before July 20, 2020 (the “Objection Deadline”), 

which is three (3) days before the hearing scheduled on this matter, you must file a written response 

explaining your position with the Court and serve a copy on the movant. Unless a written response 

is filed and served by the Objection Deadline, the Court may deem opposition waived, treat the 

motion as conceded, and issue an order granting the requested relief without further notice or 

hearing. 

If you mail your response to the Court for filing, you must mail it early enough so that the Court 

will receive it on or before the Objection Deadline. 

ATTEND THE PRELIMINARY HEARING SCHEDULED TO BE HELD ON THURSDAY, JULY 

23, 2020 AT 11:00 A.M. IN THE UNITED STATES BANKRUPTCY COURT, RICHMOND 

DIVISION, 701 EAST BROAD STREET, ROOM 5100, RICHMOND, VIRGINIA 23219. 

 

1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification 

number, as applicable, are Chinos Holdings, Inc. (3834); Chinos Intermediate Holdings A, Inc. (3301); Chinos 

Intermediate, Inc. (3871); Chinos Intermediate Holdings B, Inc. (3244); J. Crew Group, Inc. (4486); J. Crew 

Operating Corp. (0930); Grace Holmes, Inc. (1409); H.F.D. No. 55, Inc. (9438); J. Crew Inc. (6360); J. Crew 

International, Inc. (2712); J. Crew Virginia, Inc. (5626); Madewell Inc. (8609); J. Crew Brand Holdings, LLC 

(7625); J. Crew Brand Intermediate, LLC (3860); J. Crew Brand, LLC (1647); J. Crew Brand Corp. (1616); J. 

Crew Domestic Brand, LLC (8962); and J. Crew International Brand, LLC (7471). The Debtors’ corporate 

headquarters and service address is 225 Liberty St., New York, NY 10281. 

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CaaStle Inc. f/k/a Gwynnie Bee Inc. (“CaaStle”), a sublandlord and creditor herein, by and 

through the undersigned counsel, pursuant to 11 U.S.C. §362(d), Fed. R. Bankr. P. 4001(a), and Local 

Rules 4001(a)-1 and 9013-1, respectfully requests the entry of an order granting CaaStle relief from the 

automatic stay to enforce all of its contractual and state law rights to possession with respect to certain 

leased commercial premises more particularly described below, and in support thereof states as follows: 

JURISDICTION AND VENUE 

1. This Court has jurisdiction over this contested matter pursuant to 28 U.S.C. §§1334 and 

157(a), 11 U.S.C. §362(d) and Federal Rules of Bankruptcy Procedure 4001(a) and 9014. This is a core 

proceeding pursuant to 28 U.S.C. §157(b)(2)(G). Venue is proper in this district and division pursuant to 

28 U.S.C. §§1408 and 1409. 

FACTUAL BACKGROUND 

2. On May 4, 2020 (the “Petition Date”), Madewell Inc. (“Madewell” or “Debtor”) filed a 

voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code, 11 U.S.C. §101, et 

seq. (the “Bankruptcy Code”), thereby commencing Case No. 20-32191-KLP (the “Bankruptcy Case”) in 

this Court. By Order entered in the Bankruptcy Case on May 5, 2020 (Docket No. 7), the Bankruptcy 

Case has been consolidated for procedural purposes with sixteen other affiliated cases under the abovecaptioned jointly administered case. The Debtor and its affiliated debtor entities remain in the control and 

possession of their respective assets and business as debtors in possession pursuant to sections 1107 and 

1108 of the Bankruptcy Code. 

3. CaaStle, as tenant, leases commercial office space from Factory Owners LLC in a 

building located at 30-30 47th Avenue, Long Island City, New York (the “Building), which includes a 

portion of the fourth floor of the Building consisting of approximately 6,306 square feet of space known 

as Suite 460 (“Suite 460”), a portion of the fifth floor of the Building consisting of approximately 12,702 

square feet of space known as Suite 540 (“Suite 540”), and an additional portion of the fourth floor of the 

Building consisting of approximately 1,055 rentable square feet space known as Suite 470 (“Suite 470”) 

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(collectively, the “Premises”), pursuant to the terms of an Agreement of Lease dated May 15, 2015, by 

and between Factory, as landlord, and CaaStle, as tenant, as amended by (i) a First Amendment to Lease

dated March 15, 2016, and (ii) a Second Amendment to Lease dated June 28, 2017 (collectively, the 

“Prime Lease”). The term of the Prime Lease expired by its own terms on May 31, 2020, and has not 

been extended. 

4. Pursuant to the terms of a Sublease dated September 19, 2020 (the “Sublease”), by and 

between CaaStle, as sublandlord, and Madewell, as subtenant, Madewell agreed to sublease Suites 460 

and 540 (collectively, the “Subleased Premises”) from CaaStle. A true copy of the Sublease is attached 

and incorporated by reference as Exhibit A, and true and complete copies of the Prime Lease, including 

the original document and its amendments, are attached as exhibits to the Sublease. 

5. Under the terms of the Sublease, Madewell was obligated to pay CaaStle monthly base 

rent of $47,520 (the “Base Rent”) and a variable monthly amount as additional rent to pay for electricity 

and any other operating expenses related to the operation of the Subleased Premises (the “Additional 

Rent”). All rent was due and payable on the fifth (5th) day of each calendar month. Sublease at Section 

5.A. through 5.D. CaaStle was also entitled to collect a late charge of five percent (5%) plus additional 

interest for any rent not timely paid. Sublease at Section 6. 

6. CaaStle is presently holding a security deposit from Madewell in the amount of $95,040 

(the “Security Deposit”) as security for Madewell’s performance of the terms, conditions and provisions 

of the Sublease. Sublease at Section 5.E. 

7. The term of the Sublease commenced on September 15, 2019 and expired by its own 

terms—contemporaneously with the expiration of the Prime Lease—on May 31, 2020 (the “Expiration 

Date”). Section 21 of the Sublease provides that if the subtenant remains in possession of the Subleased 

Premises after the Expiration Date, then (i) subtenant shall be deemed a tenant at will, (ii) subtenant shall 

continue to pay Base Rent and Additional Rent at an increased rate calculated at 150% of the original 

rates (the “Holdover Rate”), (iii) there shall be no renewal or extension of the Sublease by operation of 

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law, (iv) the tenancy at will may be terminated upon thirty days written notice from the sublandlord, and 

(v) subtenant shall be liable to sublandlord for all damages suffered and reasonable expenses incurred on 

account of such holdover. Sublease at Section 21.A. Furthermore, following the Expiration Date, 

subtenant is required to surrender possession of, and remove all property situated in, the Subleased 

Premises. 

8. Prior to the Petition Date, Madewell was in default under the Sublease for failure to pay 

the Base Rent due for March and April 2020 ($95,040) and the Additional Rent due for January through 

April 2020 ($6,893), for a total of $101,933 (the “Pre-Petition Balance”). 

9. Subsequent to the Petition Date and prior to the Expiration Date, Madewell has failed to 

pay the Base Rent and Additional Rent due for May, in the aggregate amount of $48,907.12. 

10. Notwithstanding the Expiration Date, Madewell has continued to occupy the Subleased 

Premises and has not provided any information as to when it intends to vacate and surrender said 

premises to CaaStle. Under the terms of the Sublease, after the Expiration Date, Base Rent and Additional 

Rent continue to accrue at the Holdover Rate for so long as Madewell continues to occupy the Subleased 

Premises as a tenant at will. In turn, and by virtue of Madewell’s ongoing holdover occupancy, CaaStle 

continues to incur additional rent obligations to Factory under the Prime Lease.

2

11. While the automatic stay imposed by section 362(a) of the Bankruptcy Code upon the 

commencement of Madewell’s Bankruptcy Case may not necessarily prohibit CaaStle from issuing a 

thirty-day notice of termination of Madewell’s post-Expiration Date tenancy at will and taking possession 

of the Subleased Premises, it nevertheless likely applies to prohibit CaaStle from (i) forcibly removing 

any items of personal property belonging to Madewell, and (ii) applying the Security Deposit to pay 

down the Pre-Petition Balance. 

 

2 CaaStle reserves the right to pursue allowance and payment of an administrative expense claim in this case for the 

Base and Additional Rent accruing at the original and holdover rates after the Petition Date in connection with the 

Sublease and the Subleased Premises. 

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12. Out of an abundance of caution, therefore, CaaStle seeks relief from the automatic stay in 

this case so as to permit it to (i) terminate and take possession of the Subleased Premises, (ii) forcibly 

remove and dispose of any tangible personal property remaining in the Subleased Premises after it takes 

possession, and (iii) apply the Security Deposit in its possession to pay down the Pre-Petition Balance 

owed under the Sublease. 

ARGUMENT 

13. As a preliminary matter, the automatic stay imposed by section 362(a) of the Bankruptcy 

Code arguably does not apply. Section 362(b)(10) expressly provides that “the filing of a petition...does 

not operate as a stay— 

(10) under subsection (a) of this section, of any act by a lessor to the debtor under a 

lease of nonresidential real property that has terminated by the expiration of the stated 

term of the lease before the commencement of or during a case under this title to obtain 

possession of such property. 

11 U.S.C. §362(b)(10). In the instant case, as noted above, the Sublease expired on the Expiration Date 

in accordance with its own terms. As such, the automatic stay is arguably inapplicable to CaaStle’s 

efforts to obtain possession of the Premises. However, from June 1, 2020 until the present, the Debtor has 

occupied the Subleased Premises as a “tenant at will” subject to termination on thirty days’ notice from 

CaaStle. This holdover status creates some uncertainty regarding the application of the exception set 

forth in section 362(b)(10). As such, CaaStle has determined to exercise prudence and refrain from 

exercising its rights to retake possession absent an order confirming that the stay does not apply in this 

case or lifting and terminating the stay to the extent that it does apply. 

14. In seeking relief from the automatic stay, section 362(d) of the Bankruptcy Code 

provides that: 

(d) On request of a party in interest and after notice and a hearing, the Court shall grant relief 

from the stay provided under subsection (a) of this section such as by terminating, annulling, 

modifying or conditioning such stay – 

(1) for cause, including a lack of adequate protection of an 

interest in property of such party in interest; ... 

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11 U.S.C. § 362(d)(1). “Cause” is expressly defined to include a lack of adequate protection. However, a 

lack of adequate protection is not the exclusive basis for “cause” for relief from the stay. See 11 U.S.C. 

§102(3) (“‘includes’ and ‘including’ are not limiting”). Hence, section 362(d)(1) leaves “courts to 

consider what constitutes ‘cause’ based on the totality of the circumstances in each particular case.” In re 

Wilson, 116 F.3d 87, 90 (3d Cir. 1997). 

15. Because the Sublease has expired on the Expiration Date in accordance with its own 

terms, it is no longer considered property of the bankruptcy estate. 11 U.S.C. §541(b)(2) (nonresidential 

real property lease which terminates at the expiration of the stated term of such lease before the 

commencement of the case is not property of the bankruptcy estate). More importantly, expiration renders 

it impossible for the Debtor to assume the Sublease, since the lease is no longer “unexpired,” as expressly 

required by the Bankruptcy Code. 11 U.S.C. §365(a) (“the trustee, subject to the court’s approval, may 

assume or reject any ... unexpired lease of the debtor.”) (Emphasis added). See In re Memphis Friday’s 

Associates, 88 B.R. 830, 833 (W.D. Tenn. 1988) (lease which terminates prepetition may not be assumed 

by debtor in possession); In re Gisc, Inc., 130 B.R. 346, 348 (Bankr. M.D. Fla. 1991) (same). 

16. Even assuming arguendo that the expired Sublease could be assumed because of the 

tenancy at will created at expiration, (i) at best, all that could be assumed is a month to month holdover 

tenancy which could be terminated by CaaStle on thirty days’ notice at any time subsequent to 

assumption, and (ii) it is highly unlikely that the Debtor would want to cure the substantial monetary 

defaults that are described above, as required by section 365(b)(1) of the Bankruptcy Code. 11 U.S.C. 

§365(b)(1) (where lease is in default, debtor must cure or provide adequate assurance that it will promptly 

cure defaults). 

17. The foregoing legal and practical limitations on the Debtor’s ability to assume the 

Sublease establish cause to lift the automatic stay so as to permit CaaStle to exercise his contractual and 

state law rights to terminate and obtain possession of the Premises. See In re Premier Automotive 

Services, Inc., 343 B.R. 501, 520 (Bankr. D.Md. 2006) (Landlord granted relief from stay where, “[t]o the 

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extent that the debtor’s month to month tenancy is considered an executory lease, it is a mere allusion 

because the debtor’s assumption of it will not provide permanent relief.”); In re Masterworks, Inc., 94 

B.R. 262, 265 (Bankr. D. Conn. 1988) (“It is well settled that where the debtor will be unable to assume a 

lease pursuant to Code § 365(a), there is cause for relief from the automatic stay.); In re Q.T., Inc., 118 

B.R. 47 (Bankr. E.D. Va. 1990) (pre-petition termination of lease constitutes cause for granting relief 

from automatic stay to permit landlord to reenter and take possession of lease property). 

18. To the extent that the automatic stay is lifted and terminated, CaaStle should also be 

permitted to remove and dispose of any personal property remaining in the Subleased Premises after the 

holdover tenancy is terminated and CaaStle takes possession. CaaStle will afford the Debtor a reasonable 

opportunity to remove any of its personal property, but the automatic stay should not prohibit CaaStle 

from disposing of said property if the Debtor fails to act in a reasonable time frame after its holdover 

tenancy is terminated. 

19. With respect to the Security Deposit, there should be no dispute that the Pre-Petition 

Balance exceeds the amount of the Security Deposit so that there is no equity remaining for the Debtor. In 

the absence of any equity in the Security Deposit, the Court should lift the automatic stay to immediately 

permit CaaStle to apply the Security Deposit to pay down the Pre-Petition Balance. 11 U.S.C. §362(d)(2). 

20. CaaStle requests that the Court waive the fourteen day stay imposed by Bankruptcy Rule 

4001(a)(3) so as to permit it to immediately take all actions necessary to enforce its rights to terminate the 

holdover tenancy, take possession, remove any remaining personal property, and apply the Security 

Deposit to pay down the Pre-Petition Balance. 

CONCLUSION 

WHEREFORE, for the foregoing reasons, CaaStle respectfully requests that this Court enter an 

Order (i) lifting and terminating the automatic stay so as to permit it to exercise its contractual and state 

law rights to possession with respect to the Subleased Premises, including its rights to terminate the 

holdover tenancy, take possession, remove any remaining personal property, and apply the Security 

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Deposit to pay down the Pre-Petition Balance and (ii) granting such other and further relief as the Court 

deems just and proper. 

Date: July ___, 2020 Respectfully submitted, 

/s/ Robert M. Marino 

Robert M. Marino, VBN 26076 

Redmon Peyton & Braswell, LLP 

510 King Street, Suite 301 

Alexandria, VA 22314 

(703) 684-2000 

Fax 703-684-5109 

Counsel for CaaStle Inc. 

CERTIFICATE OF SERVICE 

I HEREBY CERTIFY that on this _____ day of July 2020, I caused a true copy of the foregoing Motion, 

with Exhibit and proposed Order attached, to be served electronically through the ECF system upon all persons 

designated to receive electronic notice thereunder, as reflected on the Master Service List maintained in this case, 

and by email to the following parties in accordance with the requirements of that certain Order Establishing Certain 

Notice, Case Management and Administrative Procedures entered herein on May 5, 2020 (Docket No. 109). 

Debtors: 

Chinos Holdings, Inc. 

225 Liberty Street, 17th Floor 

New York, New York 10281 

Attn: Maria Di Lorenzo 

Counsel to the Debtors: 

Weil Gotshal & Manges, LLP 

767 Fifth Avenue 

New York, New York 10153 

Attn: Ray C. Schrock, P.C. 

Ryan Preston Dahl 

Candace M. Arthur 

Daniel Gwen 

Email: ray.schrock@weil.com

ryan.dahl@weil.com

candace.arthur@weil.com

daniel.gwen@weil.com

Co-counesl to the Debtors: 

Hunton Andrews Kurth LLP 

Riverfront Plaza, East Tower 

951 East Byrd Street 

Richmond, Virginia 23219 

Attn: Tyler P. Brown 

Henry P. (Toby) Long, III 

Nathan Kramer 

Email: tpbrown@huntonAK.com

hlong@huntonHK.com

nkramer@huntonHK.com

Office of the U.S. Trustee 

701 East Broad Street, Suite 4304 

Richmond, Virginia 23219 

Attn: Kenneth N. Whitehurst, III 

Email: USTPRegion04.RH.ECF@usdoj.gov

Counsel for the Official Committee of Unsecured Creditors: 

Hirschler Fleischer, P.C. 

2100 East Cary Street 

The Edgeworth Building 

Richmond, VA 23223 

Attn: Robert S. Westermann 

Email: rwestermann@hf-law.com

Counsel for the DIP Agent: 

Seward & Kissel, LLP 

One Battery Park Plaza 

New York, New York 10004 

Attn: Gregg S. Bateman 

Email: bateman@sewkis.com

/s/ Robert M. Marino 

Robert M. Marino 

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