Bankrupt Rock & Republic chased by landlord

The L.A. premium denim company that's trying to get out of Chapter 11 owes millions of dollars in back rent and interest on a Rodeo Drive store that it never occupied. As reported by California Apparel News, the space had been leased by Manny Mashouf, founder of Bebe Stores who then sublet it to Rock & Republic.

When Rock & Republic filed for Chapter 11 bankruptcy protection on April 1, it attempted to break some of its store leases, which retailers often successfully do in bankruptcy court. However, [landlord] New Pacific Rodeo and its president, David Margulies, were having none of this. New Pacific filed a claim and requested a hearing in bankruptcy court in an attempt to recuperate some of its money.

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For Mashouf, the entire sublease with Rock & Republic has been a bundle of problems. After subletting to the premium blue-jeans line, Mashouf was approached by Michael Ball, chief executive at Rock & Republic, about subsidizing the rent for him. Rock & Republic executives told Mashouf they had a potential subtenant but needed some help. "R&R [Rock & Republic] asked me to reduce rental payment under the terms of the sublease agreement. I explained that I assigned my rights to the landlord and could not modify the terms of the sublease agreement," Mashouf said in court papers.