Sears Holdings CEO Buys Part Of Company's Debt

Sears Holdings CEO Eddie Lampert
Eddie Lampert, Chairman Of Both Sears Holdings And Seritage Growth Properties

Despite a $580M Q4 loss, Sears Holdings CEO Eddie Lampert refuses to throw in the towel. Lampert's latest play to turn around Sears' falling fortunes: buying some of the company's debt.

Lampert, through his ESL Investments, purchased part of a $750M loan Sears obtained to pay down some of its maturing debt. Reuters reports Lampert's stake is around $200M. The loan by Bank of America was staked by Sears inventory and receivables, and carries an interest rate four times higher than standard loans of its type.

Lampert appears to have minimized his risk, though. The collateral backing the loan assures he and the loan's other investors will be paid in full, should Sears be forced to liquidate. Lampert has tried turning Sears around by entering sale-leaseback deals for its stores. The moves haven't stopped Sears stock from plummeting, however, while a class-action lawsuit by a Sears shareholder alleges the sale-leaseback deal benefits mainly Lampert. [Reuter's]

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