Sears agrees to consider revised Lampert bid
- Author: Eleanor Harrison Jan 09, 2019,
Jan 09, 2019, 2:06
Drain said that Sears will consider Lampert's offer versus a potential liquidation during a bankruptcy auction on January 14. It is still possible that those wishing to shutdown the company will bid more for the assets than Lampert is offering.
"Sears Holdings Corp will ask a bankruptcy judge on Tuesday if it can proceed with liquidation after it could not reach an agreement on Chairman Edward Lampert's $4.4 billion takeover bid, casting doubt on the survival of the 126-year-old US department store", Reuters exclusively reported Tuesday, citing sources familiar with the matter.
It's not the first frenzied deal Sears has made during its bankruptcy. The bid would have kept 425 stores open and offered jobs to 50,000 of its remaining employees.
When Sears filed for bankruptcy in October, it said it hoped to stay in business, using the bankruptcy process to shed debt and other costs to become a smaller, more competitive retailer. According to lawyers close to the matter, one of the main sticking points was that the $4.4 bilion bid, which included $1.3 billion in financing from three financial institutions, didn't include cash. Drain said other parties could submit new or improved bids, and Sears' financial advisers would let them know if they would be considered at the auction.
Sears' bankruptcy, which includes discount chain Kmart, followed a decade of revenue declines, hundreds of store closures, and years of deals by billionaire Lampert in an attempt to turn around the company he put together in 2005 through an $11 billion deal. The creditors' attorneys question whether the terms of those loans unduly benefited Lampert and his hedge fund rather than Sears.
The creditors have argued that forgiveness of his debt should not be accepted as part of the bid, because Lampert loaned Sears the money when he was CEO. Even as Sears' brick and mortar competitors established effective e-commerce operations Sears - a pioneer in catalog sales - failed to do so.