Lampert, Sears Lenders Lose Appeal for Priority Bankruptcy Claim

Sears Holdings’ bankruptcy estate sufficiently repaid former CEO Eddie Lampert’s hedge fund and other lenders based on properly calculated collateral valuation, the Second Circuit ruled.

ESL Investments Inc., run by Lampert, and other second-lien lenders had recovered more than the value of collateral securing their claims, the US Court of Appeals for the Second Circuit affirmed Friday.

The US Bankruptcy Court for the Southern District of New York, which oversaw Sears’ Chapter 11 case, “committed no legal or factual error” in 2019 when it denied the lenders’ right to assert priority claims against Sears, the appeals court said. Other lenders ...