MGR AND LANDLORDS SETTLE LEASE DISPUTE

Byline: Carol Emert

WASHINGTON--Merry Go Round Enterprises Inc., Joppa, Md., has resolved a dispute with landlords holding several hundred of its store leases.
MGR, which filed for Chapter 11 bankruptcy protection in January, agreed to maintain some leases through Dec. 31, 1994, and to continue paying rent on those spaces through Jan. 31, 1995, according to Thomas J. Leanse, an attorney with Katten, Muchin, Zavis & Weitzman, Los Angeles.
"The idea is to protect the landlords so they have the tenant through Christmas and have rent coming in during the slow month of January," said David Pollack, a partner with Pollack, Myers & Rosenblum, Philadelphia.
Each of the law firms represent groups of landlords.
If MGR wants to terminate any leases before December, it must notify those landlords by Sept. 8 and close the stores by Sept. 18. It could not be learned Monday how many leases MGR will terminate in September and how many will remain open at least through December. MGR has negotiated those numbers separately and in confidence with each landlord, Pollack and Leanse confirmed.
MGR did not return telephone calls requesting comment, and the attorneys declined to estimate the number of stores that might close under this agreement.
The dispute arose from MGR asking a federal bankruptcy court in Baltimore to extend the period to reject or keep its leases until Jan. 31, 1995. But landlords argued that this would give MGR the freedom to close stores during the back-to-school and Christmas seasons, leaving malls with dark stores at peak sales times.
MGR reported last week that it had closed 122 underperforming units from July 30, 1993, through July 30, 1994, bringing its total to 1,313.
--Fairchild News Service

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