Sears’ liquidation spared again by chairman’s bid
SAN JUAN – Edward Lampert, Sears’ chairman, managed to hold off the planned liquidation of the company Tuesday by accepting to deposit $140 million by Wednesday at 4 p.m. through his hedge fund, ESL Investments Inc., to satisfy the Sears board’s requirement for cash to be included in his bid.
The Associated Press reported that, 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.”
Sears Holdings Corp., which includes Kmart stores as well, filed for bankruptcy on Oct. 15. The company has nearly 700 stores and 68,000 workers.
“ESL Investments’ longstanding goal has been to enable Sears Holdings Corporation to return to profitability, for the benefit of Sears and all of its stakeholders. ESL consistently believed that restructuring the company’s finances as a going concern and outside a court-run bankruptcy process would have been a better path for Sears.
“To that end, ESL put forward proposals in April and August to acquire certain Sears assets, followed by a comprehensive proposal in September for liability management transactions, strategic asset sales (including those assets that ESL had made proposals to purchase) and real estate transactions. All the proposals had the goal of providing liquidity and runway for a transformation. While a comprehensive out-of-court resolution was ESL’s preferred approach, it did not prove possible to achieve this outside the framework of a Chapter 11 process,” ESL said following the announcement by Sears Holdings that it filed a petition for relief under Chapter 11 of the U.S. Bankruptcy Code.