Published: Wed, January 09, 2019
Markets | By Erika Turner

Sears reportedly seeks to liquidate after rejecting investor's last-ditch takeover bid

Sears reportedly seeks to liquidate after rejecting investor's last-ditch takeover bid

For Sears Holdings, it appears the end is at hand.

Lampert, Sears' former CEO, gave the company more than $2.4 billion in secured financing, ESL said in a letter to Sears' investment banker. ESL wanted to finance a portion of the $4.4 billion bid by trading $1.3 billion in Sears debt it holds for ownership in the new company.

Lampert will be able to use debt he controls as part of his bid, a process known as "credit bidding", Schrock said.

Image: Sears has been steadily shutting stores, earmarking 262 shops for closure by February this year.

Sears Chairman Edward Lampert's push to save the bankrupt retailer still has a shot to succeed. Were Sears to liquidate its assets, it would become one of the most high-profile victims in the wave of bankruptcies that has swept the retail sector in the last few years, as the explosion in online shopping exacerbates the fierce price competition facing brick-and-mortar stores. As of the filing, the company had just under 700 stores and 68,000 workers. Lampert loaned out his own money and put together deals to keep the company going, turning whatever profit he could for his hedge fund. It also sought a release from any liability related to transactions between the hedge fund and the retailer prior to Sears' bankruptcy filing.

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Lampert's is the only bid created to keep Sears open. When the company was in court November 27 to finalize bankruptcy financing, a hedge fund affiliated with ESL swooped in to ignite a last-minute bidding war for the right to lend to it.

"U.S. Bankruptcy Judge Robert Drain in the Southern District of NY, who is presiding over the case, could decide to give Lampert more time to improve on his bid, the sources said", Reuters notes.

"We would rather look for easier things to do", he said.

Tuesday's court hearing in the Southern District of NY comes a day after the retailer took to social media to dispel the notion it was not longer in the running, saying in a tweet: "We may be slowing down, but we are not out of the race just yet".

Unsecured creditors have pushed for Sears to liquidate, partially because they contend they will realize a better financial recovery if it does.

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