Sears to Liquidate After Takeover Bid Falls Through

Eddie Lampert gets another chance to save Sears with new purchase bid

Eddie Lampert gets another chance to save Sears with new purchase bid

A judge still needs to approve the agreement.

Lampert's ESL Investments said late last month it was prepared to pay $4.4 billion for numerous retailer's remaining assets, including about 425 Sears and Kmart stores.

Liquidation appears to be the fate of Sears and its chairman, Eddie Lampert.

Lawyers for Lampert and his hedge fund, ESL Investments, were pressing for more time to sweeten his offer.

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. Meanwhile, Lampert also plans to present details of his offer and make the case for renewing efforts to save Sears in bankruptcy court on Tuesday.




Lampert had submitted a bid on December 28.

Sears filed for Chapter 11 bankruptcy in October.

"If Lampert's deal doesn't pay enough cash to pay their fees, they would have concerns", said bankruptcy attorney Kenneth Rosen of Lowenstein Sandler, who represents smaller creditors. 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.

About $17.9 million of the $120 million deposit is nonrefundable and will cover the cost of delaying the company's liquidation if ESL doesn't emerge as the winning bidder, Schrock said. If Sears doesn't accept Lampert's bid, it's likely the retailer will face liquidation and begin the shutting down process very soon. Those creditors, which include Sears landlords and bondholders, have also questioned Lampert's pre-bankruptcy transactions with the retailer. Reports swirled that Sears had decided it was not a viable option to stay in business and that it would ask the court Tuesday for permission to start shutting down.

While current Sears shareholders have lost almost all their investment and creditors that include the US government are owed $11 billion, Lampert has pocketed nearly $1.4 billion to date from his investment in the retailer, calculated Institutional Investor in a recent story.

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