Sears Holdings Corp. suppliers who are deciding whether to keep shipping goods to the retailer are seeing warning signs from the market for bankruptcy claims.
In a bankruptcy case, administrative claims from firms that help keep the business running are among the first to be paid, and these IOUs can become a tradable asset. Suppliers can sell them at a discount to cash out, thus avoiding the risk that the company will run out of money. The buyers are betting that the claims eventually will be honored and return more than they paid.
