Tuesday, September 24, 2019

Sears Holdings Bankruptcy Update

To address the timing mismatch of the Debtors’ assets and administrative claims, the Debtors intend to proceed with confirmation now and prosecute litigation with the oversight of the Litigation Designees who will be appointed effectively immediately upon entry of the Confirmation Order (and, on the Effective Date, will become the initial members of the Liquidating Trust Board), but intend to go effective once the Debtors either reconcile or settle with certain Administrative Expense Claimants. But the Debtors believe and will prove at the Confirmation Hearing that they have been and remain administratively solvent. The Debtors have met with certain Administrative Expense Claim creditors and proposed a settlement to such creditors in exchange for accepting a reduced but accelerated recovery on their Administrative Expense Claims. A construct for Administrative Claim settlements is attached hereto as Exhibit B (the “Administrative Expense Claims Settlement Proposal”). Negotiations among the Debtors and a group of ad hoc administrative creditors holding certain asserted Administrative Expense Claims are ongoing. In the Debtors’ view, and as the evidence demonstrates, such a settlement is “nice to have”—not a “must have.”

1 comment:

CP said...


PLEASE TAKE NOTICE that the hearing to consider (1) confirmation of the Modified Second Amended Joint Chapter 11 Plan of Sears Holdings Corporation and Its Affiliated Debtors (the “Confirmation Hearing”) and (2) the Motion of Debtors for Modification of Retiree Benefits (the “1114 Hearing” together, with the Confirmation Hearing, the “Hearing”) originally scheduled for September 27, 2019 at 11:00 a.m. (prevailing Eastern Time) and October 3, 2019 at 10:00 a.m. (prevailing Eastern Time) will go forward on October 3, 2019 at 10:00 a.m. (prevailing Eastern Time). The hearing scheduled for September 27, 2019 at 11:00 a.m. has been cancelled.
PLEASE TAKE FURTHER NOTICE that the short adjournment of the Hearing is intended to facilitate ongoing, productive negotiations with an ad hoc group of administrative expense claimants regarding resolution of confirmation objections and a framework to expedite the chapter 11 plan effective date. The Debtors believe that the brief adjournment will provide the parties in interest with the time necessary to finalize discussions, file supplemental pleadings describing the settlement (should it be finalized), with sufficient time for the Court and stakeholders to review, and is in the overall best interests of these estates.