The estate of Sears Holding Corp. is trying to take back payments it made to vendors – many of them small businesses – more than a year ago as it tries to shore up funds to wrap up its bankruptcy case.
The company is seeking bankruptcy court approval of streamlined procedures for the about 730 preferential transfer lawsuits it recently filed. The lawsuits, known as adversarial proceedings, were filed against creditors that received payments for services or products in the 90-day period immediately before the bankruptcy filing, called the preference period.
While the motion is standard procedure in a bankruptcy, the size and scope is unusual, said David Wander a partner at Davidoff Hutcher & Citron LLP.
“In Sears there are many more of them,” said Wander, who represents a number of Sears vendors and creditors.