According to Omega's motion, the auction "was not a fair, transparent, and competitive bidding process," as required by the court’s Nov. 19 sale order and section 363(b) of the Bankruptcy Code, "because the bidders (aside from Cyrus) had no notice of what was actually being sold." Omega argues that the portions of the sale of the MTNs that exceeded the scope of the sale order and section 363(b) of the Bankruptcy Code should be invalidated because “the notes were sold without proper notice and outside of the fair, transparent, and competitive bidding process authorized by the Court."
According to the filing, Omega “is an interested bidder for the MTNs and participated in the Auction.”
Omega characterizes the unlisted MTNs sale as a “backroom negotiation” and intent to lock up the Sears Re MTNs, without notifying auction participants until two weeks after the auction, as rendering the auction “unfair, opaque, and uncompetitive, in violation of the Sale Order and 11 U.S.C. § 363(b), and raises the specter that Cyrus may have used its influence as a significant creditor in the bankruptcy as well as its influence as a member of the ISDA DC to create perhaps the least value-maximizing auction ever conducted in a sale authorized by this Court.” Omega requests entry of an order voiding the portions of the sale that were ultra vires, in particular, the agreement to sell the unlisted MTNs and to lock up the Sears Re MTNs.
https://reorg.com/omega-advisors-seeks-to-invalidate-sale-of-unlisted-mtns-to-cyrus-capital-sears-re-lockup-agreement-decries-auction-as-unfair-opaque-and-uncompetitive/