Transform Holdco LLC v. Sears Holdings Corp. (In re Sears Holdings Corp.)

Transform Holdco LLC v. Sears Holdings Corp. (In re Sears Holdings Corp.)

Opinion

OPINION AND ORDER

Briccetti, J.:

Appellant Transform Holdco LLC ("Transform") appeals from the June 15, 2021, Order of the U.S. Bankruptcy Court for the Southern District of New York (Hon. Robert D. Drain, Judge) granting the motion of Sears Holding Corporation and its affiliates ("Debtors") to compel Transform to return approximately $6.3 million in cash formerly held by the Debtors' non-debtor Indian and Hong Kong subsidiaries ("Foreign Subsidiaries").

For the following reasons, the bankruptcy court's order is AFFIRMED.

The Court has appellate jurisdiction pursuant to 28 U.S.C. § 158(a).

BACKGROUND

I. The Bankruptcy Proceedings

On October 15, 2018, the Debtors filed for Chapter 11 bankruptcy [*2]  protection. Having determined that selling their business as a going concern would maximize the estate value, the Debtors engaged in an auction process. (A-516).¹ Pursuant to an Asset Purchase Agreement ("APA"), executed on January 17, 2019, the Debtors agreed to sell substantially all their assets to Transform for $5.2 billion, subject to bankruptcy court approval. (A-40). A copy of the APA was filed with the bankruptcy court on January 18, 2019. (Id.).

Following a contested hearing that spanned several days, on February 8, 2019, the bankruptcy court approved the APA and the transaction with Transform. (A-510).

The sale closed on February 11, 2019.² The same day, the parties executed an amendment to the APA (the "First Amendment"), a copy of which was filed with the bankruptcy court on February 14, 2019. (A-1713).

II. The APA and First Amendment

Pursuant to the APA, the Debtors would transfer certain assets ("Acquired Assets") and certain liabilities ("Assumed Liabilities") to Transform at closing. Certain other assets ("Excluded Assets") and liabilities ("Excluded Liabilities") were expressly excluded from the transfer. Excluded Assets included "all bank accounts" and "all cash and cash equivalents." [*3]  (APA § 2.2; A-7109).

Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.