Sears rejects bailout bid, hundreds of stores likely to close
Jan 09 2019
Sears will then hold an auction January 14, when it will compare Lampert's offer against others by liquidators. It is still possible that those wishing to shutdown the company will bid more for the assets than Lampert is offering.
Lampert's latest attempt to rescue Sears came after his previous $4.4 billion bid fell short, prompting the retailer to make liquidation preparations ahead of bankruptcy court hearing in NY on Tuesday.
US 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 his bid, the Reuters sources said, adding that a bankruptcy auction for Sears' assets is not due until January 14.
It's not the first frenzied deal Sears has made during its bankruptcy.
Sears has not said how many other offers it received or whether any others would let the retailer avoid liquidation. 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.
Lampert had submitted a bid on December 28. Those creditors, which include Sears landlords and bondholders, have also questioned Lampert's pre-bankruptcy transactions with the retailer.
Sources told Reuters the company's board will ask a bankruptcy judge on Tuesday for permission to liquidate, closing all of its hundreds of remaining stores and selling off all its assets across the country.
Sears dates back to the late 1880s and its mail-order catalogs.
The iconic retailer gradually lost its shine, however, as consumers turned to e-commerce and brick-and-mortar rivals such as Walmart Inc and Target Corp.
Image: Sears has been steadily shutting stores, earmarking 262 shops for closure by February this year.
But critics say Lampert let the stores deteriorate over the years, even as he bought the company's stock and lent it money. The retailer plans to announce its liquidation Tuesday morning, the sources added.