Published: Wed, January 09, 2019
Markets | By Jeffery Armstrong

Sears Holdings Likely Heading to Liquidation

Sears Holdings Likely Heading to Liquidation

Lampert's ESL Investments said late last month it was prepared to pay $4.4 billion for numerous retailer's remaining assets, including about 425 Sears and Kmart stores.

"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. Sears stock is trading at 22 cents a share on the New York Stock Exchange.

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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.

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. Reports swirled that Sears had decided it was not a viable option to stay in business and that it would ask the court Tuesday for permission to start shutting down. When the company was in court November 27 to finalise bankruptcy financing, a hedge fund affiliated with ESL swooped in to ignite a last-minute bidding war for the right to lend to it. Sears was the third largest retailer in the the time.

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The hemorrhaging picked up speed in the third quarter of 2016 when the company reported a net loss of $748 million, nearly double what it lost in the same quarter a year earlier.

Once America's largest department store chain, Sears had 687 stores and 68,000 workers by the time the Illinois-based company filed for Chapter 11 bankruptcy protection in October. The company responded by closing unprofitable stores.

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Lampert's offer was reportedly the only one that sought to rescue the company rather than liquidate it. It began opening retail stores in 1925.

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