Sears Methodist creditor committee objects to amended plan treatment

By Kali Hays

New York, Feb. 26 – Sears Methodist Retirement System, Inc.’s official committee of unsecured creditors objected to confirmation of the company’s amended plan of reorganization, according to a motion filed Thursday with the U.S. Bankruptcy Court for the Northern District of Texas.

As previously reported, the plan is based on the liquidation of all remaining and available assets, and the proceeds from the sales will be transferred to a liquidating trust for the benefit of unsecured creditors.

In its objection, the committee claims that “although certain non-cash assets are being transferred to the liquidating trust, there is no clear source of cash to fund the liquidating trust.”

The committee also claims that the plan “provides no clear distribution to the general unsecured creditors” and said that the plan should be “modified to provide some split of any net recoveries by the liquidating trust between the holders of unsecured deficiency claims and the holders of other unsecured claims,” according to the objection.

A hearing to confirm the plan is scheduled for Feb. 27.

Sears Methodist is a Dallas-based nonprofit senior living provider that filed for bankruptcy on June 10, 2014. The Chapter 11 case number is 14-32821.

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