A committee of Payless Holdings LLC.'s unsecured creditors is opposing a $25 million debtor-in-possession financing plan pitched by some secured lenders in the company’s liquidation bankruptcy.

The proposed loan gives the lenders too much collateral and unjustifiably releases owner Alden Global Capital from liability for contributing to the giant shoe chain’s collapse, according to a March 25 bankruptcy court filing by the committee appointed to represent the unsecured creditors.

Groups of store landlords also oppose the DIP financing — which...