From Fox Rothschild LLP:
In October of this year, Sears Holdings Corp and affiliated Debtors filed a Chapter 11 case in the U.S. Bankruptcy Court for the Southern District of New York in a case pending before Judge Drain. Since that time, the company has been reducing its debt and its physical footprint by closing stores. After the bankruptcy was filed, Sears unsecured creditors began to claim that the Debtors’ former CEO & Chairman siphoned value away from Sears in a multitude of insider transactions.
Recently, the Debtors brought suit against its former CEO, his hedge fund and other investors claiming that when Sears was declining, its controlling shareholder (who also served as its CEO & Chairman) transferred billions of dollars for “grossly inadequate consideration or no consideration at all.”
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