Trou­bled Sears chain gets an­other re­prieve from liq­ui­da­tion

Merced Sun-Star - - Front Page - BY ANNE D’INNOCENZIO

Sears re­ceived an­other life­line Tues­day when the com­pany’s chair­man and largest share­holder promised to line up the nec­es­sary fi­nanc­ing to keep the strug­gling depart­ment store chain afloat.

The re­prieve came af­ter what Sears lawyers de­scribed to a bank­ruptcy judge in New York as “round-the-clock” ne­go­ti­a­tions fol­low­ing the com­pany board’s ini­tial re­jec­tion of Ed­die Lam­pert’s pro­posal, which sought to pre­serve 425 stores and 50,000 work­ers. 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.

The bid now re­quires Lam­pert to de­posit $120 mil­lion by 4 p.m. Wed­nes­day through his ESL hedge fund.

The re­vised bid is not of­fi­cial, and will be eval­u­ated in an auc­tion set for Jan. 14 that will com­pete with other bids from liq­uida­tors look­ing to shut it down.

The 11th hour ne­go­ti­a­tion is yet an­other twist in the rocky jour­ney of Sears whose fate has been hang­ing in the wind, par­tic­u­larly since it filed for Chap­ter 11 bank­ruptcy on Oct. 15. As of the fil­ing, the com­pany had just un­der 700 stores and 68,000 work­ers.

Sears, which be­gan as mail or­der watch busi­ness 132 years ago and grew to be the largest re­tailer in the world, has been in a slow death spiral, hob­bled by the Great Re­ces­sion and out­matched by com­peti­tors like Ama­zon and Wal­mart

Un­der Lam­pert, Sears has bought time over the years by spin­ning off stores and putting on the block the brands that had grown syn­ony­mous with the com­pany, such as Crafts­man. Lam­pert loaned out his own money and put to­gether deals to keep the com­pany go­ing, turn­ing what­ever profit he could for his hedge fund.

MARK LENNIHAN AP

Sears is get­ting an­other re­prieve from liq­ui­da­tion af­ter its chair­man and largest share­holder re­vised his bid to save the brand.

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