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United States retail giant Sears considers takeover bid after liquidation threat

United States retail giant Sears considers takeover bid after liquidation threat

The Seritage deal as well as the sale of Lands' End are being investigated by the creditors' committee and are the subject of potential litigation against ESL and Lampert, who offered to pay $35 million to be absolved of allegations that ESL paid favorable prices to obtain the assets.

Lawyers representing Sears Holdings told a bankruptcy judge Tuesday that former CEO Eddie Lampert's bid to buy the assets wasn't adequate and said it wants to proceed with plans to liquidate, according to several published reports. According to lawyers close to the matter, one of the main sticking points was that the $4.4 billion bid, which included $1.3 billion in financing from three financial institutions, didn't include cash.

"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.

The revised bid is not official, and will be evaluated in an auction on January 14 that will compete with other bids from liquidators who are looking to shut down the company.

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.

While Lampert and ESL sought to keep Sears afloat, creditors had been keen on the firm's liquidation so that they could recoup at least some of what they are owed.




Sears filed for bankruptcy protection on October 15, 2018.

The deal was reached after days of "virtually round-the-clock negotiations", Sears attorney Ray Schrock told the court.

Sears Holdings Corp shares more than doubled after news emerged that Lampert would have another chance to rescue Sears from liquidation.

Lampert's offer did not include putting up cash to back the credit bid.

ESL's ability to finance its purchase by effectively forgiving the retailer's debt will be also be considered at the bankruptcy auction, Schrock said. Without an agreement, Sears faced the possibility of liquidation.

"We would rather look for easier things to do", he said. Meanwhile, Lampert also plans to present details of his offer and make the case for renewing efforts to save Sears in bankruptcy court on Tuesday.


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