Sears intercompany notes sale invalidation request denied by court

By Caroline Salls

Pittsburgh, Jan. 3 – A motion to invalidate Sears Holdings Corp.’s medium-term intercompany notes sale was denied Thursday by the U.S. Bankruptcy Court for the Southern District of New York.

The order said bidder and creditor Omega Advisors Inc. made a request on Dec. 6 to invalidate the sale and lockup of $650 million of notes issued by Sears Roebuck Acceptance Corp. (SRAC).

In November, Sears received court approval to sell series B medium-term notes issued by SRAC. Cyrus Capital Partners is the purchaser.

Specifically, Omega Advisors subsequently asked the court to confirm the scope of the prior order authorizing the sale of property outside the ordinary course of business, invalidate any portions of the sale that exceeded that scope and clarify that the advance good-faith findings for the purchaser do not extend to unauthorized sales or agreements.

“Omega submits that the sale disclosed by the debtors on Dec. 4 was without proper notice and outside of the fair, transparent and competitive bidding process authorized by the court,” Omega’s motion said.

Sears is a retailer based in Hoffman Estates, Ill. The company filed bankruptcy on Oct. 15 under Chapter 11 case number 18-23538.

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