Sears reached the deal with Cyrus Capital Partners LP for the financing just before a hearing began in U.S. Bankruptcy Court for the Southern District of New York on the retailer’s so-called debtor-in-possession financing arrangements, according to a person familiar with the matter.
Cyrus’ loan replaced a similar deal Sears reached earlier this month with Great American Capital Partners, a financial firm affiliated with liquidation specialist Great American Group and financial services firm B. Riley Financial Inc(RILY.O). Cyrus offered better terms to Sears, the person said.
“The terms of the transaction were much less favorable than what we had agreed to,” said John Ahn, president at Great American Capital Partners.
A Cyrus spokeswoman had no immediate comment.
A Sears spokesman declined to comment on the deal for the $350 million loan, which U.S. Bankruptcy Judge Robert Drain approved at the hearing.
The loan adds to $300 million that banks provided Sears when it filed for bankruptcy protection in October, giving the beleaguered retailer a total of $650 million in financing.
“These loans are going to benefit everybody,” Drain said.
