Replies to post #20169 on Sears Holdings Corp. (fka SHLDQ)

[linda1]

Preferred Securities always have a Face Value and
receive dividends based on the Face Value.


Note that the 3,000 Class B Preferred Units
are valued at $ 300,000. That is a Face Value
of $ 100 each.


I think you are quite correct that the Class B
Preferred Units will not be issued from Transform
Holdco. Notice that it states “ 3,000 Class B
Preferred Units of NEWCO - which is short for
NEW COMPANY.


Transform Holdco will likely change its name to
SEARS.....?? to reflect the business name of its
425 Stores before it issues the 3,000 Class B
Preferred Units.


Note that the language states equityholder(s)
- which means either one or more. I do not think
that any of Equity Securities of the Subsidiaries
belong to the SHLDQ Holders and there must be
a separate registry for the owners of the Equity
Securities of the Subsidiaries.


Plus it would be impossible to distribute 3,000
Class B Preferred Units to SHLDQ Holders if there
are more than 3,000 Holders of SHLDQ Shares.


You could make a list of the other Debtors - Subsidiaries
of SHC - and research who the Equityholder(s) is/are.
I still think the Parent Company SHC would have to be
either the sole or the Majority Holder of the Equity.



The Securities Consideration shall comprise
3,000 Class B Preferred Units of Newco,
with an aggregate liquidation preference
of $300,000 and otherwise subject to the
terms and conditions set forth in the
Amended and Restated Limited Liability
Company Operating Agreement of Newco
as in effect on the Closing Date and as
may be amended from time to time
thereafter.

2. The Securities Consideration delivered
to the Sellers pursuant to Section 3.3 of
the Agreement shall be allocated among
the Sellers that are Debtors in accordance
with the Allocation Schedule. The Allocation
Schedule shall identify the amount of cash,
Securities Consideration (including any
fractional units) and credit bid debt that is
allocable to each transfer of Acquired Assets
contemplated by the Agreement (a “Transfer”).

3. As soon as practicable after the Closing,
each Seller other than SHC shall distribute
the Securities Consideration received by it
(whether directly in respect of a Transfer
by it or pursuant to the Distribution
Requirement from a direct or indirect
subsidiary) to its equityholder(s) pursuant
to the Distribution Requirement, subject
to item 5 below.

4. As soon as practicable thereafter
(and effective as of the Closing Date),
SHC shall distribute the aggregate
Securities Consideration received by
it (whether directly in respect of a
Transfer by it or pursuant to the
Distribution Requirement from a direct
or indirect subsidiary) ratably to holders
of Senior Second Lien Obligations
pursuant to the Amended and Restated
Security Agreement, dated as of
March 20, 2018, among SHC and
certain of its Subsidiaries, as Grantors,
and Wilmington Trust, National
Association, as Collateral Agent,
with any fractional preferred units otherwise
determined for any single holder being
rounded up or down to the nearest
whole unit, subject to (x) item 5 below
and (y) with respect to each holder,
receipt of evidence reasonably satisfactory
to SHC of an exemption under applicable
securities Laws for the transfer of the
applicable pro rata portion of the
Securities Consideration to such holder. “

[linda1]

In Docket # 2 it states the Equity Interests
of the Debtors. As I figured, SHC has 100 %
Equity Interest in some of the Debtors, but not
all. It looks like all of the Debtors’ Equity
Holder(s) is a Parent Company.