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UPDATE: Sears Asks Bankruptcy Court To Liquidate, Lampert Gets 24 Hours For Rescue Attempt

UPDATE: Sears Asks Bankruptcy Court To Liquidate, Lampert Gets 24 Hours For Rescue Attempt

At long last, the harrowing saga of the demise of American retail icon Sears is nearing its end. The retailer requested permission from a bankruptcy judge to move forward with liquidation Tuesday, though Chairman Eddie Lampert negotiated 24 hours to shore up a bid to keep the company alive, according to reports. 

The move to liquidate the 126-year-old company was largely expected after Lampert’s last-ditch bid to rescue the retailer from liquidation failed. Sears creditors were unimpressed with Lampert’s $4.4B bid to acquire between 400 and 500 stores, in addition to other assets, out of bankruptcy through his hedge fund ESL Investments. Concerns that the bid did not address the depth of Sears’ bankruptcy costs, which will likely reach more than $200M, were at the heart of creditors’ concerns, sources told Reuters

Lampert’s attorneys revisited bankruptcy court Tuesday as well to discuss key details from ESL’s bid in a final attempt to stall liquidation. Presiding U.S. Bankruptcy Judge Robert Drain gave Lampert a deadline of 4 p.m. ET Jan. 9 to provide a redrafted offer and a $120M deposit to be in the running to bid for the company.

Should Sears liquidate, it will shutter hundreds of stores across the country, and roughly 68,000 people will be out of a job. As of mid-October, Sears was operating roughly 700 stores. In addition to the plan announced in December to shutter 80 more stores, Sears announced plans in August to close 46 stores. The Hoffman Estates, Illinois-based chain has been circling the drain for several years due to slumping store sales and an inability to keep up with current shopping trends; it filed for Chapter 11 bankruptcy protection in October under a mountain of debt.

UPDATE, JAN. 8, 2:55 P.M. ET:  Following a bankruptcy court hearing Tuesday, Sears has agreed to await a revised bid offer from Chairman Eddie Lampert to save the century-old retailer from liquidation. The redrafted offer, due Jan. 9 at 4 p.m. ET, must include a $120M deposit, Reuters reports. At that time, bankruptcy courts will determine whether Lampert’s bid will suffice during a Jan. 14 bankruptcy auction.