Cyrus, Omega Call Truce in Sears CDS Fight After Settling Trades

A bankruptcy judge approved Sears Holdings Corp.’s sale of notes to Cyrus Capital Partners even as he called the outcome “odd,” ending a chapter in the hedge fund’s efforts to keep its payouts on a series of derivatives as low as possible.

The judge, Robert Drain, questioned why other bids for the notes did not emerge after he opened the door for more buyers to step in December, and at least one other potential purchaser had expressed interest. A lawyer for the retailer’s creditors also said the evaporation of buyer demand is puzzling, but said that parties had sold their ...