Sears Holdings – Unsecured Creditor’s Committee Objects to Retention of Evercore Group as Investment Banker

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November 9, 2018 – Sears Holdings’ Official Committee of Unsecured Creditors filed an objection [Docket No. 629] to the Debtors’ application to retain Evercore Group as investment banker [Docket No. 424]. The committee asserts, “The Creditors’ Committee respectfully requests that the Court deny the Evercore Application absent additional evidence establishing the necessity of retaining Evercore in addition to A&M and modification to the terms of Evercore’s retention to ensure that there is no duplication of services….The burden is on the moving party to prove by evidence, not conclusory statements, that the proposed terms and conditions of a proposed retention are reasonable under Bankruptcy Code section 328(a). If the bankruptcy court finds that the proposed terms of a professional retention are unreasonable, the court may modify such the terms of retention to render them reasonable….In short, the Debtors have failed to establish that Evercore’s retention will not result in duplication of services that will (or can) be provided by A&M.  Moreover, permitting the retention by the RSC of multiple, duplicative advisors may lead to other parties in interest (including the Restructuring Committee) determining that they too require advisors to perform duties clearly within the purview of already retained professionals.” 

The objection continues, “The Debtors propose to pay Evercore a monthly fee of $200,000 (the ‘Monthly Fees’) and an additional fee (the ‘Additional Fee’) if the aggregate of all Monthly Fees paid to Evercore since the execution of the Engagement Letter are less than $3 million. The Additional Fee will be calculated as $3 million less the aggregate amount of all Monthly Fees paid to Evercore, such that Evercore will be paid no less than $3 million in connection with its engagement….Finally, the Debtors have not proven that the Additional Fee, which guarantees that Evercore will be paid a minimum of $3 million during its employment, is reasonable and should be pre-approved pursuant to Bankruptcy Code section 328(a). This is particularly true because the Court will not have the ability to revisit Evercore’s compensation in the event that there is a substantial amount of duplication of services performed by Evercore and A&M.”

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