https://twitter.com/petition/status/1088186370093449217
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We've pointed out a few instances lately where the MSM has mischaracterized the current status of Eddie Lampert's proposal to purchase Sears Holding Corp. in bankruptcy. Here's one, for instance:
https://example.com/0JbaPvEFwC
First, the Sears Holding Corporation drama continues as the company heads towards a contested sale hearing in the beginning of February. To say that it “staved off liquidation” is, at this juncture, factually incorrect.
While the company’s prospects have improved along with Mr. Lampert’s purchase offer, it is not a CERTAINTY that the company will be able to avoid liquidation. At least not until the Official Committee of Unsecured Creditors’ objection is overruled...
...and the bankruptcy court judge blesses the Lampert deal. The sale hearing is slated for February 4.
Which begs the question: do we think there is a reasonable likelihood of the UCC prevailing with the objection to the sale AND its motion to obtain standing to pursue claims?
In a word: NO. First, regarding the sale, this is a "business judgment" standard and the company ran a process and determined, with the assistance of independent directors (and their advisors), that the Lampert offer is the highest or best offer.
Second, as @JessicaDiNapoli and @mike_d_spector reported yesterday, Judge Drain himself was critical to the parties getting a deal done with Mr. Lampert. As a judge, you don't save a patient just kill it a few weeks later.
Third, it helps that the releases were limited in scope. While there was a release to objections to Mr. Lampert's credit bid, the debtors preserved their rights to pursue Mr. Lampert and ESL (et al) for other claims including fraudulent conveyances, preferences, etc.
Finally, this is where the lessons of Nine West and Payless come in. The debtors and their independent directors have a battery of professionals who are pursuing investigations into the actions of ESL/Lampert.
We joked about this, sure, but there is rhyme and reason. The fact that so many professionals have been hired is meant to insulate the debtors/directors from the UCC. And we think it's likely to work. The company will tell the judge that they're investigating and have claims.
As long as the judge is convinced that the debtors can deliver a meaningful investigation and pursuit of some claims against ESL/Lampert, he'll hold the UCC at bay, avoiding the Nine West scenario. Just our 2cents.
And so we're, to some degree, unfairly beating up the WSJ on a technical point. But, as you see, there are still a number of elements to consider before willy nilly concluding that the company staved off liquidation full-stop. Ultimately we may end up at the same place.