One of Sears Holdings Corp.’s largest creditors offered the bankrupt retailer more than $80 million in hopes of salvaging a bad credit-insurance bet, WSJ Pro Bankruptcy reported. Cyrus Capital Partners LP outbid other hedge funds in an unusual auction for internal loan claims among different Sears subsidiaries. Sears put these intercompany loans up for sale before the Thanksgiving holiday last week but hasn’t publicly announced which bids, if any, it would accept. The potential sale could provide desperately needed cash for the retailer’s restructuring efforts as it tries to save hundreds of its best-performing stores from liquidation. A deal with Cyrus would require approval from the U.S. Bankruptcy Court in White Plains, N.Y., where the chain sought protection from creditors last month. Read more.
In related news, Sears Holdings Corp. won court approval yesterday for $350 million in critical bankruptcy financing that will keep the 125-year-old retailer operating through the holidays while it attempts to reorganize, Reuters reported. Sears reached the deal with Cyrus Capital Partners LP for the financing just before a hearing began in U.S. Bankruptcy Court for the Southern District of New York on the retailer’s debtor-in-possession financing arrangements. Cyrus’ loan replaced a similar deal Sears reached earlier this month with Great American Capital Partners, a financial firm affiliated with liquidation specialist Great American Group and financial services firm B. Riley Financial Inc. Cyrus offered better terms to Sears, according to sources. Read more.
