‘Come to Papa, Sears’

Lampert’s $4.6B

Eddie Lampert is still a believer.

The Sears Holdings chairman offered to buy back the bankrupt retailer via his ESL Investments fund for $4.6 billion, a price tag that includes saving 500 Sears stores, the company’s headquarters in Hoffman Estates, Ill., and its Kenmore and DieHard brands.

Lampert’s move could enable some 50,000 employees to keep their jobs.

“Sears is an iconic fixture in American retail and we continue to believe in the company’s immense potential to evolve and operate profitably as a going concern,” Lampert wrote in a letter to Sears’ financial adviser Lazard Frères.

The company’s long-suffering creditors, who have said in court filings that they want the company to liquidate instead of reorganize, will likely object to Lampert’s bid, which could also be challenged by a group of liquidators who are preparing a competing bid to close down the chain.

Lampert’s offer came with an important caveat.

He wants to be released from potential litigation tied to past financial deals he’s done to keep the company afloat.

Lampert asked for a “full release” for “liability related to any pre-petition transactions involving ESL,” according to the letter.

The hedge fund mogul says his offer is contingent on the court agreeing “you can’t sue us,” said Debtwire legal analyst Sarah Foss.

Both the unsecured creditors’ committee and a special committee of the board are investigating those deals that occurred before Sears filed for bankruptcy protection on Oct. 15.

Lampert’s offer also includes swapping $1.8 billion in debt that Sears owes ESL for equity, a maneuver known as a credit bid — which the unsecured creditors have also objected to, according to court documents.

“I can see the unsecured committee attacking ESL’s ability to credit bid,” Foss said.