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Sears Holdings – Unsecured Creditors Object to DIP Financing and Cash Management Motions, Citing Concerns Over Diminishing Asset Pool for Unsecured Creditors

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November 14, 2018 – Sears Holdings’ Official Committee of Unsecured Creditors filed an objection [Docket No. 740] to the Debtors’ debtor-in-possession (“DIP”) financing motion and cash management motion [Docket Nos. 7 and 5, respectively]. 

The Committee asserts, “The granting of the joint and several suprpriority claims and related liens in respect of the rolled up $1.53 billion of Pre-petition ABL obligations against Debtors that are not obligated on the Prepetition ABL Facilities debt has no basis in the law and may render theses estates administratively insolvent….In Addition to the nominal $1.83 billion DIP ABL Facility, which only provides $300 million of incremental value, the Debtors intend to seek authorization to obtain additional postpetition financing on a junior basis (‘Junior DIP’) because the DIP ABL Facility is insufficient to bridge the Debtors to the completion of their contemplated sale of approximately 400 four-wall EBITDA positive stores (the ‘Go Forward Stores’) as a going concern (the ‘Going Concern Sale’) and other asset sales….It remains to be seen whether using assets otherwise available to satisfy unsecured claims as security for the DIP ABL Facility and a Junior DIP Facility to conduct the Going Concern Sale is in the estates’ best interests or reasonably likely to maximise value for all stakeholders.”  

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The post Sears Holdings – Unsecured Creditors Object to DIP Financing and Cash Management Motions, Citing Concerns Over Diminishing Asset Pool for Unsecured Creditors appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.


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