Sears Holdings Corp. suppliers who are deciding whether to keep shipping goods to the retailer are seeing warning signs from the market for bankruptcy claims, Bloomberg reported. Few buyers have emerged for the Sears administrative claims, and the bid prices are far below where they stood at a similar stage of Toys “R” Us Inc.’s bankruptcy. The toy retailer looms large because its rapid descent into liquidation in March wiped out some claims buyers. And Sears isn’t helping matters with its delay in securing some of its bankruptcy financing, said sources. “Toys “R” Us spooked the trade claims market,” said Gregory Plotko, a partner in the bankruptcy practice at Richards Kibbe & Orbe LLP. “Accordingly, claims buyers are being more cautious with Sears claims and are waiting to see how the case develops.” Claims traders are offering Sears vendors about 65 to 70 cents on the dollar, whereas Toys “R” Us claims fetched as much as 85 cents early in the toy chain’s bankruptcy process. Read more.
One of the worst outcomes for a business owner is having a major customer file for bankruptcy and leave behind a large unpaid account receivable. ABI's Business Creditor’s Guide to Distressed Vendors, Debt Collection and Bankruptcy provides an insider’s look into the options available to help screen a business’s customers, plan for worst-case scenarios, and, if the situation does arrive, efficiently handle the fallout.
