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IN RE FOOTSTAR, INC.

No. 04 B 22350(ASH).

337 B.R. 785 (2005)

In re FOOTSTAR, INC., et al., Debtors.

United States Bankruptcy Court, S.D. New York.

May 10, 2005.

Attorney(s) appearing for the Case

Weil, Gotshal & Manges LLP, By Paul M. Basta, Esq., Martin J. Bienenstock, Esq., Sara C. Temes, Esq., New York, for Debtors.

Wachtell, Lipton, Rosen & Katz, By Robert B. Mazur, Esq., Amy R. Wolf, Esq., New York, for Kmart Corporation.

Kronish Lieb Weiner & Hellman LLP, By Richard S. Kanowitz, Esq., New York, for the Official Committee of Unsecured Creditors.

Kramer Levin Naftalis & Frankel LLP, By Matthew J. Williams, Esq., Erin Eliasen, Esq., New York, for the Official Committee of Equity Security Holders.

DECISION ON CROSS-MOTION BASED ON SECTION 365(e)(2)

ADLAI S. HARDIN, JR., Bankruptcy Judge.

The debtors moved to assume their executory contracts with Kmart Corporation ("Kmart") pursuant to Section 365(a) of the Bankruptcy Code, 11 U.S.C. § 365(a). Kmart opposed the motion on several legal and factual grounds, and also cross-moved for relief from the automatic stay to terminate the executory contracts under an ipso facto termination clause relying...

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