Northwest Arkansas Democrat-Gazette
Expert in restructuring gets seat on Sears’ board
Sears Holdings Inc. added restructuring expert Alan Carr to its board of directors, the company said Tuesday, as it faces critical debt repayments.
Carr, the chief executive officer of the restructuring advisory firm Drivetrain LLC, has more than 20 years of experience with financially distressed companies as both an investor and an adviser, according to his firm’s website. Before taking his current role, he was a distressed debt and private equity investor at Strategic Value Partners LLC.
“I don’t think it is an immediate drive to bankruptcy, but clearly the options are limited,” David Tawil, president and co-founder of
Maglan Capital, said of Sears. He said he thinks the company could be looking at a big liquidity infusion or at restructuring debt.
Carr joins the board as the retailer faces $134 million of borrowings maturing on Monday. ESL Investments, the hedge fund managed by Sears Chief Executive Officer Eddie Lampert, said in a filing last month that the debt coming due was among the obligations creating “significant near-term liquidity constraints” for Sears. The company mentioned those constraints as part of a proposal to sell real estate to help pay down borrowings, which would cut Sears’ debt by nearly 80 percent.
“Alan brings deep experience as a director for companies that went through complex organizational change,” Lampert said in a statement. Carr has served on the boards of a number of companies that restructured in bankruptcy, including Gibson Brands, ExGen Texas Power and LightSquared.
Lampert has been using his own money for years to keep Sears from collapsing as its customers turn to other retailers and sales fall. The 125-yearold retailer, based in Hoffman Estates, Ill., has relied on piecemeal deals and infusions from the hedge fund manager to offset billions of dollars in losses.
Last month, ESL urged the retailer to sell $1.5 billion more in real estate and restructure $1.1 billion in debt to avoid bankruptcy, according to the filing with the Securities and Exchange Commission. Lampert is the company’s biggest shareholder.
In August, the board said it was weighing a proposal from Lampert that Sears sell its Kenmore brand. It said ESL might offer to buy it if the company was willing to sell.
Sears has closed hundreds of stores and cut more than $1 billion in expenses. The company’s shares closed at 59 cents Tuesday and are down more than 90 percent over the past year.