Linda, I maxed out on my posts yesterday so couldn’t respond to you until today.
This is relative to my post 17700
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you said: There is zero stated in the APA that the NOLs and
other Tax Attributes will be included in the 363 Sale.
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page 395/598 of docket 2344 is the apa. If you have just the apa, look on page 2 in the last “whereas” just before Article I. it states:
…transaction…(i) constitute one or more plans of reorganization under section 368 (a) of the code (as defined below) and as qualifying as one or more reorganizations thereunder and (ii) satisfy the ownership requirements set forth in section 382 (1)(5)(A)(ii) of the code.
Both of those bankruptcy code cites in the apa relate to tax loss carryforwards.
Also, look at the actual page 50 of the apa, section 2.12 tax reorganization. Page 443/598
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then you added: PLUS why would the Debtors state as follows if Holdco
is to receive the Tax Attributes upon the approval and
closing of the 363 Sale:
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I’m of the opinion that what was shown on those pages 85 and 86 were plans which shc would use if shc were to attempt a reorganization. The holdco on the diagram was a company which shc would have created to transfer its assets and the consideration from holdco (stock and warrants) were the construct deloitte proposed based on the private irs ruling for another company.
This was a “what if” scenario in the event the esl bid was not approved and shc had to either reorganize itself or liquidate, or both.
Since shc is proposing to sell the going forward asset to esl as a going concern, I believe that shc gave up the opportunity to reorganize and instead “sold” that right to esl (transform holdco which recently referred to it as “new sears”
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you said:
“ The Debtors have commenced formulation
of a chapter 11 plan and are evaluating
the contours of a potential plan including
the Debtors’ significant Tax Attributes “
PLUS if the Debtors are planning to Liquidate
after the 363 Sale is approved why did they
say that they needed more time to get an
Agreement with the Creditors on a POR -
as the reason for extending the POR filing date?
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I believe shc filed for an extension of the por filing date out of an abundance of caution in the event the esl bid was not approved and they in fact had to go forward with a plan of their own.
In support of that opinion, look at the last paragraph on page 24/598 of docket 2344 which stated:
“if the debtors were not going to pursue an esl bid, they will hold a subsequent auction or auctions, where any individual real estate assets or smaller assets will be auctioned off for sale or the debtors would otherwise pursue a different alternative as part of a chapter 11 plan”
Now go to page 32/598 where sears discusses their alternatives in the event an esl bid is not approved.
“the wind down plan is conservative and does not contain outside potential that would be pursued on the company’s alternatives” (i.e. a total liquidation) (however, if pursued) “those potential alternatives include in pursuit of a chapt 11 plan involving the sale or reorganization around sears home service or certain other business and distribution of the debtors’ tax attributes to creditors”
The above construct, I believe, would be the scenario under which pages 85 and 86 (the diagram and discussion pages) would apply.
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It is my understanding that a POR is only for if
the Debtors intend to reorganize
and emerge from bankruptcy.
Where does it state
anywhere that the Debtors plan to convert to a
Chapter 7 Liquidation if the 363 Sale is approved?
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As discussed above, I believe the alternatives shc was looking at in the event esl’s bid was not accepted or approved was a complete liquidation (in essence a chapt 7 bk) or pursue a reorganization alternative around sears home improvement or some other business and then spin off the tax attributes to creditors. If they had taken that path, that Is where they would need to file a por.
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In your post 17961 you said:
ESL is buying 400 of 425 Stores that are
profitable. So I think that any distribution of
the Tax Attributes could be divided according
to the losses of the individual businesses - which
I think favors the Debtors.
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From a docket posted Monday morning (something like esl’s revised response to the ucc objections, it stated there were 100 dark stores in the assets esl bid on. It went on to say if esl’s bid were approved that those 100 stores would be immediately sold with the hope of realizing $100 million of excess proceeds.
Again, it seems to me like esl is structuring its bid to be able to obtain the maximum amount of nol’s possible subject to cancellation of debt issues etc.
