Analysis Group Publishes Article on the Economics of Fraudulent Conveyance
November 28, 2017
There has been wide speculation on how the 2015 Sears/SRG sale-leaseback transaction would fare if Sears were to declare bankruptcy in the future. Specifically, many commentators have argued that the transaction could be unwound pursuant to avoidance actions under the Bankruptcy Code. Analysis Group Vice President Edi Grgeta and Manager Konstantin Danilov, as well as Friedman Kaplan Partner Christopher Colorado, discuss the complex economics and continued vulnerability of the $2.7 billion transaction in a Journal of Corporate Renewal article titled “Sears, SRG, and the Economics of Fraudulent Conveyance.” The authors detail the value relinquished by Sears as compared to the value it received from Seritage, potentially applicable federal and state fraudulent conveyance laws, and possible challenges to the transaction. Since many distressed retailers use asset sales to increase liquidity, these considerations are also relevant to many other business transactions.