SAN FRANCISCO-Mervyns, which entered Chapter 11 bankruptcy at the end of July, recently gained some breathing room for deciding which of 172 leaseholds it will retain and which it will let go. It also hired a third party to review the leases and negotiate with landlords in advance of any decisions.

The extension of the leasehold review–to Feb. 23, 2009 from Nov. 25, 2008–was granted earlier this month by US Bankruptcy Judge Kevin Gross. This week, Gross was scheduled to sign off on the hiring of Hilco Hilco Real Estate LLC of Northbrook, IL to review Mervyn’s leases and negotiate discounts with landlords where appropriate. Hilco is currently handling the going-out-of-business sales now occurring at 26 Mervyns locations.

In arguing for the extension of the leasehold review period, a transcript made available online last week lays out the reasons for Mervyn’s request. The first is that Hilco, whose hiring was to be approved by the court late last week, has only recently begun its review process.

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