A bankruptcy judge in New York is scheduled to rule Thursday on the Chapter 11 reorganization plan for Sears Holdings, the parent of Sears and Kmart stores. On Monday, as many as 70 vendors to the now-defunct Sears Holdings filed documents asking the court not to grant Sears’s reorganization plan.

The vendors are seeking a Chapter 7 liquidation that would “stop wasting the precious, little, cash on hand,” which they claim rightfully belongs to them and other creditors. The objections focus on the amount that is being paid in legal fees to “professionals” (i.e., lawyers and banks).

The creditors “do not want these professionals to bill even one more hour” to the reorganization plan. If the court decides not to allow a conversion to Chapter 7 liquidation, the creditors want a trustee named to mediate their demands.

According to the filing, the vendors that have signed on to the objection “are now being pushed closer to insolvency” as a result of the reorganization plan that calls for them to wait for an unspecified length of time to be paid in full.

Outstanding claims from the objectors total approximately $180 million. The remnants of Sears Holding had $50.1 million in unrestricted cash available to distribute on September 21. If that amount were distributed to the objectors, they would receive about 27% of the amount due to them.

The catch is that the vendors believe that the professionals have carved out about $30 million of the available cash “for the benefit of the professionals.” They want an independent trustee to figure out where the money came from and where it’s going to go. If the $30 million were to be paid to these objecting vendors, the payment would add another 16% to the $180 million that they are currently underwater.

And, wonder of wonders, the objectors note that $97 million of the funds earmarked to be distributed to the surviving company (called Transform Holdco) are “speculative” and that there is “no assurance that these funds will ever be paid” to the creditors.

Imagine that. Eddie Lampert and his professionals might just keep the money and tell the creditors to take a hike.

It’s no surprise that Sears is among the companies with the worst reputations but not one of the most valuable brands in the world.

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