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Since filing for Chapter 11 bankruptcy, Sears Holdings Corp. has been trying to convince suppliers to keep shipping it merchandise by touting the $300 million in financing it has secured so that its business can continue operating through the holidays, the Associated Press reported. But a growing number of manufacturers who themselves got hurt or watched others get burned by Toys ‘R’ Us’s quick demise don’t want to take a chance. Many manufacturers have already been keeping Hoffman Estates, Illinois-based Sears on a tight leash over the past few years as they watched its fortunes spiral downward. But their reluctance to work with the retailer heading into the holiday shopping season is a major blow to its survival. The fate of Sears, which also operates Kmart, depends on a critical flow of goods to its stores. “Toys ‘R’ Us was a game changer,” said Kenneth Rosen, a partner at Lowenstein Sandler, which represents several Sears’ vendors. “My clients want to work with Sears. They very much want to see Sears survive. At the same time, they don’t want to get burned twice.” 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. 

West Hempstead-based retailer National Wholesale Liquidators Inc., which recently disclosed plans to lay off 392 workers in New York State, has filed for chapter 11 bankruptcy and "is winding down its operations," Newsday reported. The Wednesday night bankruptcy filing by NSC Wholesale Holdings LLC estimates it has assets of $10 million to $50 million and liabilities in the same range. A news release Wednesday said the company has engaged two companies to help it sell the inventory and fixtures at its stores. The filing in U.S. Bankruptcy Court in Wilmington, Delaware, put the number of creditors at 200 to 999. The largest listed creditor, Arett Sales Corp. of Pennsauken, New Jersey, had an unsecured claim of $3.4 million, according to the filing.

Neiman Marcus Group Ltd., the Dallas-based luxury department-store chain, started talks in recent weeks with a group of creditors that could lead to a debt restructuring that will push out looming debt maturities and avert a bankruptcy filing, WSJ Pro Bankruptcy reported. The company began talks with a group of bondholders and lenders represented by the law firm Paul Weiss Rifkind Wharton & Garrison and financial advisers Houlihan Lokey that could lead to a restructuring of Neiman’s $4.7 billion in debt. Almost all of the debt comes due in 2020 and 2021. The company’s goal in the talks is to extend the debt maturities and possibly reduce the overall amount of debt without a bankruptcy filing. The luxury department store chain is being advised in the talks by Lazard Ltd., Moelis & Co. and Weil Gotshal & Manges.

For nearly two decades, Synchrony Financial was the exclusive issuer of Walmart Inc. credit cards. That came crashing down in July, when Walmart told Synchrony it was switching to Capital One Financial Corp., the Wall Street Journal reported. Walmart executives had grown irritated because, among other issues, they wanted Synchrony to share more of the cards’ revenue and approve more applicants, according to people familiar with the situation. Store cards were already slumping as many traditional mall retail businesses, like J.C. Penney Co. Inc. and Macy’s Inc., lose popularity. Sears Holdings Corp., which filed for bankruptcy protection last week, was one of the first department stores to roll out its own credit card decades ago. As those retailers shrink, banks are scrambling to compete for card agreements with a handful of big, successful merchants like Amazon.com Inc. and Costco Wholesale Corp. And those companies, like Walmart, are finding they can demand bigger concessions from card companies.

Mattress Firm Inc., whose bankruptcy filing earlier this month would generally freeze most pending lawsuits against it, faces a challenge from Tempur-Pedic North America LLC, which Monday sought court approval to continue a trademark infringement case against the retailer, WSJ Pro Bankruptcy reported. The bedding-products maker moved to lift the automatic stay that is shielding Mattress Firm in U.S. Bankruptcy Court in Wilmington, Del., with the aim of restarting litigation already pending in federal court. Tempur-Pedic North America in August sued Mattress Firm and three unrelated companies in federal court in Tampa, Fla., alleging trademark infringement and unfair competition. It alleged, among other things, that Mattress Firm and the others make, advertise and sell mattresses under the name “‘Therapedic,’ which, as used by defendants, is confusingly similar” to the Tempur-Pedic brand. In that lawsuit, Tempur-Pedic sought a preliminary injunction seeking to stop Mattress Firm and others from infringing on its products.

The losses that drove Sears Holdings Corp. into bankruptcy could end up being a valuable multi-billion dollar asset because of tax breaks — especially for its most notable creditor and Chairman, Eddie Lampert, Bloomberg News reported. As of the retailer’s bankruptcy on Oct. 15, Sears estimated it had net operating losses it could use to offset $5 billion of future taxable income, and separate tax credits of around $900 million. These are the most valuable assets Sears has, and under U.S. tax law, they could disappear in bankruptcy if another company or investor takes the company over. The assets are so prized, that Sears has said they will help its efforts to reorganize. A new, restructured Sears is more attractive with them, and could even use them to buy up another company. But while its survival is up in the air, the tax assets also means Lampert has more of an incentive to keep Sears alive than other creditors. If he doesn’t step in with financing, keeping the tax asset alive, it’s not clear whether other investors will. “He’s in an enviable position," said Robert Willens, a New-York based tax consultant. Willens said that he sees an advantage for Lampert in the bankruptcy. Essentially, if Sears reorganizes and some of its debt converts to stock in a new company, Lampert could take more than half of the new stock without losing the tax assets, whereas other creditors can not.

Sears Holdings Chairman Eddie Lampert is in discussions with at least one potential partner to contribute to a $300 million bankruptcy loan the U.S. retailer is seeking, Reuters reported. Lampert's hedge fund, ESL Investments, has held discussions with Cyrus Capital Partners, an investment firm that holds some of Sears' existing debt, about sharing the burden of funding portions of the $300 million loan, which would be separate from another $300 million bankruptcy loan that Sears' banks have offered to provide. Through his hedge fund, Lampert has invested billions of dollars in Sears since he created it in its current form in 2005 through a merger with peer Kmart. As a result, he is the department store operator's largest shareholder and creditor. The bankruptcy loan from the banks, including Bank of America, Wells Fargo, and Citigroup, falls first in line for repayment in the Sears bankruptcy case, while the $300 million loan that Sears is seeking from lenders including ESL would be repaid afterwards.

Senate Democrats urged Treasury Secretary Steven Mnuchin to recuse himself from any decisions involving the U.S. government’s pension insurer and Sears Holdings Corp., the bankrupt retailer he previously backed, WSJ Pro Bankruptcy reported. Senate Finance Committee members Robert Menendez (D-N.J.), Ron Wyden (D-Ore.), and Sherrod Brown (D-Ohio), said in a Friday letter that “anything short of full recusal will present a significant conflict of interest and risk bias” in the Pension Benefit Guaranty Corp.’s dealings with Sears. The PBGC backstops corporate pensions and is the largest single Sears creditor, assuming the retailer terminates one or both of its underfunded retirement plans through bankruptcy. A former Sears investor and board member before joining the Trump administration, Mnuchin now sits on the PBGC’s board along with Labor Secretary Alexander Acosta and Commerce Secretary Wilbur Ross.

Shortly after filing for bankruptcy last week, Sears Holdings Corp. sent a letter to suppliers asking for their “ongoing support.” However, some vendors have stopped shipping products to the retailer over concerns they won’t get paid, Bloomberg reported. Their willingness to continue working with the department-store chain during bankruptcy will play a crucial role in whether the company survives. Suppliers had already been demanding better payment terms with the retailer over the past several years as its finances deteriorated. This included payment in advance of shipping for some vendors, instead of the traditional 60 days or so. Now that it has filed for chapter 11, the retailer wants terms that are less favorable for suppliers. 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. 

Nine West Holdings Inc. unveiled Wednesday an amended restructuring plan that settles potential lawsuits against private-equity owner Sycamore Partners LP for $105 million in cash, far less than the amount the unsecured creditors committee is seeking, WSJ Pro Bankruptcy reported. Nine West reached the settlement with Sycamore Partners, minority owner KKR Credit Advisors (US) LLC, and its secured and unsecured term loan holders, according to the plan filed on Wednesday in the U.S. Bankruptcy Court in New York. But the new plan doesn’t have the support of the retailer’s unsecured creditors committee, which earlier this week sought the court’s permission to pursue its own lawsuits against Sycamore Partners for more than $1 billion in damages. Nine West said that the new plan has garnered the support of 80 percent of the company’s unsecured term loan holders and 85 percent of its secured debt holders.