This is how Judge Drain's order and the attached exhibits to that order describe what is going to happen to "Old Sears". And by Old Sears, I mean what is left over after Sears Holdings Corporation and its debtor subsidiaries which are all parties to the bankruptcy have sold substantially all of the go-forward assets to Transform Holdco.
the "Distribution Requirement" is located on page 12 of the Asset Purchase Agreement which was attached to and approved as a result of Judge Drain's order. The Asset Purchase Agreement was also filed with the SEC. It is docket # 2507. When you get to the point about the Securities Consideration, I documented what this was in an earlier post today. The Securities Consideration is 3000 shares of Class B stock in Transform Holdco with a liquidation value of $300,000.
“Distribution Requirement” shall mean the requirement that each Seller...(i) shall distribute the Securities Consideration received by it to Persons qualifying as holders of “securities” of such Seller for purposes of section 354 of the Code, (ii) shall distribute all of the cash received pursuant to Section 3.1(a), as well as all of its other property pursuant to the Bankruptcy Plan, (iii) shall dissolve no later than the end of the third taxable year ending after the Closing Date, and (iv) during the period between the Closing Date and its dissolution, shall limit its activities to those which are merely for the purpose of liquidating its assets (which may include maintaining a going operation for the preservation of value, pending distribution or sale), winding up its affairs, resolving and paying its debts, and distributing any remaining assets (which may include a distribution to a non-corporate liquidating vehicle).
So, this is not a reorganization of debt. notice points (iii) and (iv) above. The Seller(s) are Sears Holdings Co. and each of its debtor subsidiaries who are a party to the Asset Purchase Agreement. Those Sellers are required to DISSOLVE no later than the end of the third taxable year after the Closing Date and their actions during that period of time is limited to undertaking the steps necessary to liquidate their assets, wind up their affairs and pay their debts.
I am not sure how liquidating, winding up affairs, paying debts and then dissolving can be construed as reorganizing.
The steps Sears Holdings Co. and it debtor subsidiaries are required to take in the "Distribution Requirement" set forth above are not opinions. They describe the facts of what is going to happen. If you can read that and apply any "logic" as to how those things are substantially any different that what they say, please chime in and let us know.
Again, everyone is entitled to their own opinion, but there are some pretty specific facts which run contrary to what a lot of people think is going on based on their feelings, gut reaction, emotions, or whatever.
