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Sears Creditors Say Ch. 11 Plan Lacks Legal Basis

Law360 (May 23, 2019, 5:34 PM EDT) -- Multiple Sears creditors have asked a New York bankruptcy court to reject the company’s Chapter 11 plan, claiming the proposal has a shakier legal and financial foundation than Sears would have creditors believe.

Led by the unsecured creditors committee and ex-Sears CEO Edward Lampert's hedge fund ESL Investments — the current owner of Sears’ stores — several creditors objected to the plan's disclosures Wednesday. The creditors argue that there is no legal basis for a proposed pension settlement and that the plan as a whole falsely assumes there will be enough money to pay administrative costs of the case. 

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