Sears Holdings (OTCPK:SHLDQ) may not have enough cash needed to pay certain administrative claims in order to exit Ch.11 bankruptcy. In a court filing (docket 5144 Exhibit B) late Friday, Sears stated they are now trying to get holders of administrative claims, which are mostly vendor claims, to take a huge "haircut" for their claims. These must be paid in order to exit Ch.11 or Sears Holdings may have to convert to Ch.7 with a trustee controlling the liquidation process. Many vendors have already sold their claims to bankruptcy claim speculators who are worried how much they will actually get paid.
The confusion over the numbers was clearly evident at a seven hour hearing on September 12, when Judge Drain gave up on determining the amount Sears Holdings and Transform (ESL/Lampert) owe each other regarding their dispute over the Asset Purchase Agreement. I expect even more confusion at the September 27 (updated date) confirmation hearing in White Plains. (The hearing may take more than just one day.) At least the lawyers are making a fortune off this deal, but most investors, however, could get nothing.
Plan Voting Results
Prime Clerk filed the voting results (docket 5137) and as expected, PBGC voted to accept the plan since they negotiated their own special deal months ago. They were in their own separate class-number 3. Shareholders were not allowed to vote on the plan and were deemed to have rejected it. ESL/Lampert did not even vote. (The polite way is to say they "abstained" from voting.) Because they filed objections to the plan, lawyers decided to consider their potential votes as rejecting the plan.
Since at least one impaired voting class accepted (Class 3) the plan, the plan is confirmable under sections 1129(a)(10) and sections 1029(b) as long as the plan does not "discriminate unfairly" and
