Omega Asks Judge to Partly Invalidate Sears Internal Note Sale

Omega Advisors asks the judge presiding over Sears Holdings Corp.’s bankruptcy to undo the sale of intercompany notes at the center of a hedge fund war in the derivatives market.

• Omega asks the court to invalidate the sale of the $650m Sears Roebuck Acceptance Corp. medium-term notes to Cyrus Capital Partners, and void what it calls a “clandestine agreement” not to sell an additional $1.4b of the MTNs, according to a filing late Dec. 6.
• Lawyers for Omega argue the sale was unfair because Sears had announced plans to sell “no more than” $251m of the debt.
• Lawyers argue Omega ...