Sears Holdings Corp. won approval from a federal bankruptcy judge to raise cash by selling off $250 million of intercompany debt, however, Cyrus Capital Partners obtained some changes to the court order that authorized the sale. The changes could make the notes less valuable to potential buyers.
The changes include provisions that the sale of the notes won’t be "free and clear" of claims from Sears Roebuck Acceptance Corp., the unit that issued them. The inclusion of that language could increase the odds that a panel of derivative traders will exclude the notes from a separate auction that will determine the payout on some $400 million of swaps on Sears.
“They may be trying to create some uncertainty,” said RK&O partner Julia Lu. "Whether or not justified, people may be hesitant in assuming they can deliver these notes into the auction.”