UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In Re: METROPARK USA, INC., Debtor.

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Chapter 11 Case No. 11-22866 (RDD)

Objection Date: May 18, 2011 Hearing Date: May 23, 2011

LIMITED OBJECTION OF SIMON PROPERTY GROUP, INC. TO MOTION OF THE DEBTOR FOR ORDER (A) SETTING (1) DATE TO CONDUCT AUCTION OF DEBTORS INTERESTS IN CERTAIN REAL PROPERTY LEASES AND INTELLECTUAL PROPERTY, AND (2) SALE HEARING DATE; (B) APPROVING BIDDING PROCEDURES AND TERMS OF AUCTION; (C) ESTABLISHING CURE AMOUNTS; (D) AUTHORIZING DEBTOR TO ENTER INTO LEASE TERMINATION AGREEMENTS; (E) APPROVING AND AUTHORIZING SALE OF LEASES AND INTELLECTUAL PROPERTY TO HIGHEST OR OTHERWISE BEST BIDDER FREE AND CLEAR OF ALL LIENS, INTERESTS, CLAIMS AND ENCUMBRANCES PURSUANT TO 363 OF THE BANKRUPTCY CODE; (F) WAIVING REQUIREMENTS OF RULE 6004 OF THE FEDERAL RULES OF BANKRUPTCY PROCEDURE AND LOCAL BANKRUPTCY RULE 6004-1 AND (G) GRANTING RELATED RELIEF Comes now, Simon Property Group, Inc. and its related entities (Simon), through its undersigned counsel, and hereby files this Limited Objection to the Motion of the Debtor for Order (A) Setting (1) Date to Conduct Auction of Debtors Interests in Certain Real Property Leases and Intellectual Property, and (2) Sale Hearing Date; (B) Approving Bidding Procedures and Terms of Auction; (C) Establishing Cure Amounts; (D) Authorizing Debtor to Enter Into Lease Termination Agreements; (E) Approving and Authorizing Sale of Leases and Intellectual Property to Highest or Otherwise Best Bidder Free and Clear of all Liens, Interests, Claims and Encumbrances Pursuant to 363 Of The Bankruptcy Code; (F) Waiving Requirements of Rule 6004 of the Federal Rules of Bankruptcy Procedure and Local Bankruptcy Rule 6004-1 and (G) Granting Related Relief (the Sale Motion) and in support of the same states as follows:

BACKGROUND 1. On or about May 2, 2011, (the Petition Date), the Debtors filed their voluntary

petitions for relief under chapter 11 of title 11 of the United States Code (the Bankruptcy Code).

2.

Since the Petition Date, the Debtors have continued in the operation and

management of their business as Debtors-in-Possession under 1107 and 1108.

3.

The Debtor is the lessee under thirteen (13) leases with Simon, of these, ten (10)

are for certain premises listed on Exhibit A of the Sale Motion (the Leases).

5.

By way of background, the retail shopping centers managed by Simon, including The Leases

the Simon community shopping centers, are generally large, up-scale, centers.

between Simon and the Debtor contain very specific restrictions and covenants, which are of paramount concern for shopping center owners and their landlords.

6.

Simon has concerns with respect to the terms and conditions of the proposed

procedures contained in the Sale Motion. Specifically, Simon objects to (i) the Debtors proposed cure amounts, and (ii) adequate assurance of future performance with respect to the leases listed on Exhibit A of the Sale Motion.

LIMITED OBJECTIONS 7. The Debtor is in default of its monetary obligations under the terms of its Leases.

Such default includes unpaid pre-petition rent and post-petition rents due pursuant to the Leases, as well as, pecuniary costs incurred as a direct result of the defaults. The Lease defaults are identified in Exhibit 1 attached hereto and incorporated by reference. The Sale Motion fails to compensate Landlord for any actual pecuniary loss resulting from the default and the Debtor has not provided adequate assurance of future performance under the Lease it seeks to assume. Both are required by 11 U.S.C. 365(b)(1)(B)-(C) as more fully described below.

8.

In addition to the defaults detailed in Exhibit 1, the successful bidder must

specifically agree to take the Leases subject to all charges accrued, but not yet billed under the Leases, including, but not limited to, common area maintenance, real estate taxes, overage rent, percent rent and utilities.

9.

In the 1984 Amendment to the Bankruptcy Code, Congress added Section

365(b)(3)(A-D), which specifically defines, adequate assurance of future performance of a lease of real property in a shopping center includes adequate assurance as follows:

11 USC 365 (b)(3)(A-D) (A) of the source of rent and other consideration due under such lease, and in the case of an assignment, that the financial condition and operating performance of the proposed assignee and its guarantors, if any, shall be similar to the financial condition and operating performance of the debtor and its guarantors, if any, as of the time the debtor became the lessee under the lease; that any percentage rent due under such lease will not decline substantially; that 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; and that assumption or assignment of such lease will not disrupt any tenant mix or balance in such shopping center. Debtor must provide sufficient information to satisfy the requirements of the

(B)

(C)

(D)

10.

above in regards to adequate assurance of future performance.

CONCLUSION

11.

For all of the foregoing reasons, Simon respectfully requests that this Court deny

the Sale Motion or, in the alternative, Simon prays for the Court to enter an order setting forth the correct Cure Amounts for the Simon Leases, procedures for adequate assurance of future performance to be provided by the assignee, payment of the cure amount in addition to charges accrued as of this date but not yet billed, including but not limited to, common area maintenance, real estate taxes, overage rent, percent rent and utilities as heretofore described and for all other relief the court deems just and proper.

Respectfully submitted,

/s/Ronald M. Tucker Ronald M. Tucker, Esq., Attorney for Simon Property Group, Inc. and its related entities

225 W. Washington Street Indianapolis, IN 46204

Indiana Bar #11428-49 (317) 263-2346 (317) 263-7901 (FAX) rtucker@simon.com

Exhibit 1

CERTIFICATE OF SERVICE The undersigned hereby certifies that a copy of the foregoing was served this 17th day of May, 2011, via U.S. Mail prepaid, facsimile transmission and/or ECF Noticing, to individuals listed below. By: /s/Ronald M. Tucker Ronald M. Tucker, Esq.
Susan D. Golden Office of United States Trustee SDNY 33 Whitehall Street New York, NY 10004 Cathy Hershcopf Cooley LLP 1114 Avenue of the Americas New York, NY 10036 Jeffrey L. Cohen Cooley LLP 1114 Avenue of the Americas New York, NY 10036 Ronald A. Clifford Blakeley & Blakeley, LLP 1000 Quail Street Suite 200 Newport Beach, CA 92660