11th-hour deal allows Sears to remain open - for now

Sears to ask bankruptcy judge to liquidate

Sears is getting another reprieve from liquidation after its chairman and largest shareholder revised his bid to save the iconic brand.

Now Sears faces full liquidation of its assets if the judge doesn't decide to give Lampert more time to improve his offer, which Reuters' sources say he and his hedge fund, ESL Investments Inc., are attempting to do.

Sears' bankruptcy attorney said on Tuesday the retailer will move forward with its planned auction, set for January 14, averting liquidation plans that were supposed to be announced earlier in the day.

The talks continued into Tuesday.

Sears filed for bankruptcy protection on October 15, 2018. The 126-year-old company, whose closure would be among the most high-profile retail bankruptcies in recent years, struggled to convince suppliers to keep shipping it merchandise by touting the $300 million in financing it has secured in November so that its business could operate through the holidays.

Creditors, though, would prefer that Sears liquidate, as Lampert - the firm's former CEO - made a variety of controversial moves during his tenure as chief executive and they would prefer to cut their losses. As many as 50,000 jobs are at stake.

According to the report, the offer included too little cash to cover costs incurred in the bankruptcy and also undervalued inventory and other assets compared with what liquidators were indicating they would pay. It is known he expects the new Sears to borrow $1.3 billion from three leading banks. Lampert had put forward a $4.4 billion bid to save Sears by buying it out of bankruptcy through his hedge fund ESL Investments, but he could not reach an agreement with Sears' advisors, who believe the chairman's offer is insufficient, according to CNBC sources. If it depends on Lampert forgiving past debt, it could again scuttle the deal and kill the final chance the company has to stay in business. The attorney does not represent Lampert.

Lampert's offer did not include putting up cash to back the credit bid. The creditors' attorneys question whether the terms of those loans unduly benefited Lampert and his hedge fund rather than Sears.

The creditors also have been arguing for months that shutting down Sears was the best course for repaying the greatest amount of the money it owed. In bankruptcy court filings it called Sears previous plans to stay in business "nothing more than wishful thinking " and "an unjustified and foolhardy gamble with other people's money".

Related:

Comments

Latest news

AU urges 'respect' for results of DR Congo vote
France requested the meeting, which was scheduled for 15:00, as world powers await results from the landmark vote held last Sunday .

Liverpool defender Alexander-Arnold admits Man City defeat still burns
City are far too good a side to give up a title without a fight which will in all likelihood go down to the wire. Against Liverpool he showed it again. "If that goes in it might have been a completely different game".

Trump to visit border, White House announces amid shutdown, wall fight
US President Donald Trump arguing about border security with Senate Minority Leader Chuck Schumer in the Oval Office in December. Trump reaffirmed that he would consider declaring a national emergency to circumvent Congress and spend money as he saw fit.

Ref Ruling Melvin Gordon Didn't Fumble Swings Whole Ravens-Chargers Game
The Los Angeles Chargers are the No. 5 seed despite having a 12-4 record due to coming behind the Chiefs based on a tiebreaker. Keenan Allen is a legit No. 1 threat in the passing game and finished with almost 1,200 receiving yards and six touchdowns.

Other news