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Asset/Investment Management
cyruscapital.com

Investments

25

Portfolio Exits

2

Funds

2

About Cyrus Capital Partners

Cyrus Capital Partners, L.P. is a privately owned firm. The firm primarily invests in value stocks employing a fundamental analysis. It invests across the capital structure of leveraged companies throughout their life cycles, including those in financial distress, special situations, arbitrage, and seeks to generate attractive absolute returns that are not correlated to or dependent upon the general equity and fixed income markets. The firm was previously known as Och-Ziff Freidheim Capital Management. Cyrus Capital Partners was founded in August, 1999 and is based in New York, New York with additional offices in London, United Kingdom and Stamford, Connecticut.

Headquarters Location

1 Station Place

Stamford, Connecticut, 06902-6800,

United States

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Latest Cyrus Capital Partners News

‘It’s done, it’s over’: Eddie Lampert’s Sears case won’t go to Supreme Court

Mar 27, 2023

Three courts had already rejected an attempt from Lampert and other lenders to wring millions more from what’s left of the former retail giant. Published March 27, 2023 Daphne Howland/Retail Dive Last week the Supreme Court delivered a hard stop to arguments made by former Sears CEO Eddie Lampert and other lenders looking to get more money out of what remains of the beleaguered retailer. For years, it seemed like there was no end in sight for Sears’ bankruptcy process, even though it technically concluded in late 2022 after three contentious years, following decades of struggle. Lampert’s history with the retailer began nearly 20 years ago as an investor, with stints as CEO and board chair. He is now a majority owner of what’s left of it after its bankruptcy filing in 2018 . His hedge fund, ESL Investments, and Cyrus Capital Partners are among lenders to Sears Holdings Corp. Lampert, TransformCo (also known as “new Sears”), and an attorney for ESL and Cyrus, didn’t respond to requests for comment for this story. The case surrounded a claim by lenders, including ESL and Cyrus, that their collateral was undervalued in bankruptcy court. The original decision in August 2019 by Judge Robert Drain was upheld twice on appeal. The lenders calculated that they had $718 million in unpaid debt after first-lien lenders were paid, and because a $433.5 million credit bid fell short of the value of their collateral, they were entitled to more money. Had they prevailed, in addition to potentially wringing hundreds of millions more dollars out of what’s left of Sears, Lampert’s fund and the other lenders cited a section of the bankruptcy code, 507(b), that would have, to the detriment of other creditors, allowed them “a super-priority claim that steps ahead of everybody,” said William Norton, partner at Bradley Arant Boult Cummings, a bankruptcy specialist. The courts’ math Drain, however, found they were owed nothing, and that 507(b) didn’t apply. In their appeal in November of 2019 in district court, Lampert and the other lenders claimed that Drain “applied a hypothetical liquidation valuation, which valued the collateral at hundreds of millions of dollars less than its actual replacement cost — even though no such liquidation actually occurred for the bulk of the collateral in question.” “The bankruptcy court compounded this error by applying a starting ‘net orderly liquidation value’” standard that undervalued their collateral, they also said. This was a middle-of-the-road assessment of the lenders’ collateral, according to Stu Komrower, a partner at law firm Cole Schotz who specializes in bankruptcy and corporate restructuring. Broadly, the three yardsticks available in estimating the worth of creditors’ collateral — in this case, mostly Sears’ inventory — are: retail value, fire-sale liquidation value, or net orderly liquidation value. Drain employed the last one, also known as NOLV, which falls somewhere in between the other two. It reflects the value of inventory sold during an orderly going-out-of-business sale. “So it was a little bit of a ‘split the baby’ in terms of valuation,” Komrower said by phone. “But I think the judge, who is a very highly regarded, very smart judge, took the right approach, and had a practical orientation, with some substantive backup for that practical orientation.” Lampert’s appeals couldn’t overcome that. The Southern District of New York district court, then the Second Circuit Court of Appeals, each in turn endorsed the bankruptcy court’s original reasoning and math. And last week, with the words “certiorari denied,” the U.S. Supreme Court declined to hear the case, leaving Drain’s initial decision intact. Absent a significant or contentious legal issue, or the need to resolve incongruous district-court decisions, the high court wasn’t likely to take up this case, our experts said. And so that is the end of the line for Eddie Lampert, at least for this particular aspect of Sears’ long-running bankruptcy. “It’s done, it’s over. He’s out of there, move on,” Komrower said. “The Supreme Court has spoken by not speaking.”

Cyrus Capital Partners Investments

25 Investments

Cyrus Capital Partners has made 25 investments. Their latest investment was in TeraWatt Infrastructure as part of their Series A on September 9, 2022.

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Cyrus Capital Partners Investments Activity

investments chart

Date

Round

Company

Amount

New?

Co-Investors

Sources

9/13/2022

Series A

TeraWatt Infrastructure

$1,000M

No

26

7/12/2022

Series C - II

May Mobility

$111M

No

9

4/28/2022

Series B - II

Sealed

$29.5M

No

3

1/26/2022

Series C

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$99M

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10

6/24/2021

Series B

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$99M

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10

Date

9/13/2022

7/12/2022

4/28/2022

1/26/2022

6/24/2021

Round

Series A

Series C - II

Series B - II

Series C

Series B

Company

TeraWatt Infrastructure

May Mobility

Sealed

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Amount

$1,000M

$111M

$29.5M

$99M

$99M

New?

No

No

No

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Co-Investors

Sources

26

9

3

10

10

Cyrus Capital Partners Portfolio Exits

2 Portfolio Exits

Cyrus Capital Partners has 2 portfolio exits. Their latest portfolio exit was Clearwire on July 09, 2010.

Date

Exit

Companies

Valuation
Valuations are submitted by companies, mined from state filings or news, provided by VentureSource, or based on a comparables valuation model.

Acquirer

Sources

7/9/2010

Acq - P2P

$99M

1

6/18/2010

IPO

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$99M

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10

Date

7/9/2010

6/18/2010

Exit

Acq - P2P

IPO

Companies

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Valuation

$99M

$99M

Acquirer

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Sources

1

10

Cyrus Capital Partners Acquisitions

1 Acquisition

Cyrus Capital Partners acquired 1 company. Their latest acquisition was Flybe on October 19, 2020.

Date

Investment Stage

Companies

Valuation
Valuations are submitted by companies, mined from state filings or news, provided by VentureSource, or based on a comparables valuation model.

Total Funding

Note

Sources

10/19/2020

$99M

Asset Sale

1

Date

10/19/2020

Investment Stage

Companies

Valuation

$99M

Total Funding

Note

Asset Sale

Sources

1

Cyrus Capital Partners Fund History

2 Fund Histories

Cyrus Capital Partners has 2 funds, including Cyrus Select Opportunities Fund II.

Closing Date

Fund

Fund Type

Status

Amount

Sources

6/25/2020

Cyrus Select Opportunities Fund II

1

6/25/2020

Cyrus Select Opportunities Fund II

10

Closing Date

6/25/2020

6/25/2020

Fund

Cyrus Select Opportunities Fund II

Cyrus Select Opportunities Fund II

Fund Type

Status

Amount

Sources

1

10

Cyrus Capital Partners Team

4 Team Members

Cyrus Capital Partners has 4 team members, including current Founder, Managing Partner, Stephen C. Freidheim.

Name

Work History

Title

Status

Stephen C. Freidheim

Founder, Managing Partner

Current

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Name

Stephen C. Freidheim

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Work History

Title

Founder, Managing Partner

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Status

Current

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