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Bankruptcy negotiations can be a protracted process with an uncertain outcome. Bebe was not as financially stressed as some other retailers that have filed for bankruptcy. The company had more to offer landlords when effectively buying out their leases; by saying, “Hey, if we go through bankruptcy you may just get pennies on the dollar. If we work out a deal you’ll get something more than that.” They were able to convince landlords to do that. There probably were objections that a landlord could have made, “Hey, is this retailer really a valid candidate for the bankruptcy process and the bankruptcy court?” That is not an easy process, either. That could have been a protracted argument, certainty. NREI: Would this arrangement have been possible if Simon and GGP had not bought out Aéropostale stores last year? Matthew Harding: I think in one way they are linked, by showing that landlords used creativity and they were willing to do things that are different from the usual bankruptcy approach. NREI: How likely is it that the industry will see this type of arrangement more often as an alternative to bankruptcy proceedings? Matthew Harding: I think it is going to be relatively infrequent.

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