Deal reached to save Sears from liquidation

Judge authorizes sale to former CEO’s ESL group

Judge approves sale of company to former CEO Lampert’s hedge fund

WHITE PLAINS, N.Y. – A federal judge on Thursday approved a lastminute deal to save Sears Holdings in shrunken form, giving the death-defying retailer a second chance at life.

Judge Robert Drain authorized a deal to sell the major remaining assets of Sears to its chairman, largest shareholder and former CEO Eddie Lampert’s hedge fund, ESL Investments.

Hours before Drain announced his decision, attorney Ray Schrock, who represents Sears, noted the gravity of the moment as closing arguments began.

“Today is obviously a very import day for Sears,” he said to Drain. “The fate of Sears is going to be in the court’s hands.”

Putting Sears’ plight in the broader context of the entire retail industry, which has been disrupted by forces from Amazon to the rise of fast fashion, Schrock said, “like so many retailers, it’s a melting ice cube, and the timing is urgent.”

As sales cratered over the last roughly 15 years, Sears has closed more than 3,500 stores and cut about 250,000 jobs, leading to the company’s Chapter 11 bankruptcy filing in October.

Without approval of the sale to ESL, Sears would have almost certainly liquidated altogether. Instead, about 425 stores and 45,000 employees will be transferred to ESL.

“The execution risk for this transaction, when one considers the alternative … is reasonable to take,” Drain said.

Drain acknowledged that Lampert, who has been fiercely criticized for his role in the downfall of Sears, had been portrayed as a cross between the American railroad baron Jay Gould and bumbling fictitious character Barney Fife.

“During the course of this case, Mr. Lampert, in particular, has been subject to substantial verbal abuse,” Drain said. “He has the opportunity now not to be a cartoon character and take action that in fact would be of great meaning” to the company’s employees, vendors and shoppers.

Although the company will survive, store closures are not expected to stop altogether.