Guess who is getting paid now?
Attorney fees billed in advance, all utility companies, and multitudes of other claimants. Doubt that there will be any help from the court regarding our back wages due before bankruptcy.
I hear 20/20 is interested.
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I got a check from the bankruptcy court for my mileage last week (let go from HE last month). I didn’t think I would ever see that money but I guess Drain forced them to pay it out. Good on him if that’s the case.
Actually; that is NOT how bankruptcies normally work. The creditor receives a DIP loan; which has virtually a zero chance of not being fully repaid; with interest. The DIP lenders monitor bank accounts daily; and has SUPER SENIORITY over everything else; excluding tax claims.
The DIP and results of asset sales are used to cover all payments; including attorney and restructuring fees. Attorneys generally feel confident they will be paid via the DIP and only bill AFTER providing services. The judge can claw-back any payments deemed excessive.
In this case Sears could be deemed ADMINISTRATIVELY INSOLVENT; and could be a first case where certain payments may not be made; including the DIP! I suspected this might happen when they filed; since Lampert engineered this bankruptcy unlike any other. [Draining every asset he could before filing]. Lampert may not understand retailing... but he is definitely a hedge fund expert and financial engineering Guru.
I would not be surprised if the DIP; some attorney fees; or even the Prime Clerk itself fail to get fully paid. IF that does happen I would not be surprised if this case alone causes the consideration of new or strengthened bankruptcy laws.
Actually that's not how this bankruptcy was working. The judge had to force the issue because Sears was dragging its feet, and the judge was kind of snippy about it too about why it was taking so long for everyone to get paid.
That’s how bankruptcies work. Why would anyone provide any services to a bankrupt company if it didn’t?
Pre-bankruptcy claims not getting paid will make for a good sob story but not much else will come of it. Except bad PR for a company that doesn’t need anymore.