What remains of Sears Holdings Corp. will finish its bankruptcy with a heap of unpaid bills, according to creditors who are ramping up for a court fight over the former retailer’s bankruptcy plan, WSJ Pro Bankruptcy reported. The retailer filed for bankruptcy protection last year, sold off parts of its business, and tried to scrape together cash to pay off hundreds of millions of dollars of debts. The old Sears left behind is pushing for court approval of a chapter 11 plan, but a group of creditors said in a court filing on Wednesday that there is not enough money to cover costs from the bankruptcy process itself. Suppliers, landlords and others owed money by Sears would be better off if the chapter 11 case was converted to a chapter 7 liquidation, with a trustee to take over for the 10 legal and professional firms that have been managing the company’s final affairs, the committee of unsecured creditors said. Read more.
In related news, Sen. Elizabeth Warren (D-Mass.) and Rep. Alexandria Ocasio-Cortez (D-N.Y.) teamed up yesterday to blast Treasury Secretary Steven Mnuchin over the bankruptcy of Sears, Roll Call reported. Warren and Ocasio-Cortez are questioning Mnuchin’s actions as a member of the Sears board and his longstanding ties to Eddie Lampert, the Sears CEO who came into that role after the retailer was purchased by his hedge fund. “We are deeply concerned by the financial engineering and potentially illegal activity that took place at Sears Holding Corporation while you served on the company’s board. In addition, we are concerned that, as Treasury Secretary, you are in position to take actions that benefit Sears’ shareholders and owners at the expense of workers and taxpayers,” the lawmakers wrote in a letter released yesterday. Read more.
