The post No Deal: Sears Rejects Lampert's Takeover Bid, Will Liquidate 126-Year-Old Retail Icon appeared first on CCN.
The decision was predicated on the condition that Lampert's hedge fund provide a $121 million deposit by Wednesday, as the former CEO makes a last-ditch effort to save the company.
The revised bid is not official, and will be evaluated in an auction set for Monday that will compete with bids from liquidators looking to shut the chain down.
Plagued by falling sales and heavy debt, Sears filed for Chapter 11 bankruptcy reorganization in October and announced plans to close 142 of its roughly 700 remaining stores and eliminate thousands of jobs. The company responded by closing unprofitable stores.
In the Lehigh Valley, Sears closed the Kmart at 1502 S. Fourth St.in Allentown on Sunday. The creditors' attorneys question whether the terms of those loans unduly benefited Lampert and his hedge fund rather than Sears.
Lampert's is the only bid created to keep Sears open.
Abid Qureshi, an attorney representing a committee of Sears' creditors, said they had not been included in those negotiations and continued to have "significant concerns" about ESL's bid.
Retail expert Burt Flickinger discusses how Sears Chairman Eddie Lampert is trying to buy the company out of bankruptcy.
CCN previously reported that Sears was on life support heading into the New Year, with a bid from Lampert and ESL being the last thing standing between the 20th-century icon and liquidation. It also sought a release from any liability related to transactions between the hedge fund and the retailer prior to Sears' bankruptcy filing.
ESL denied those allegations but Qureshi said Tuesday creditors are still assessing what they believe are "significant viable claims against ESL".
When Sears filed for bankruptcy in October, it said it hoped to stay in business, using the bankruptcy process to shed debt and other costs to become a smaller, more competitive retailer. He did not disclose details of the new offer.
ESL said that should its bid be accepted, it expects the company to emerge from bankruptcy.
"U.S. Bankruptcy Judge Robert Drain in the Southern District of NY, who is presiding over the case, could decide to give Lampert more time to improve on his bid, the sources said", Reuters notes.
"I remember at the beginning of summer, we'd start flipping through the catalog, having to get the penny loafers of the Mary Janes, the black and white shoes", she said. Without an agreement, Sears faced the possibility of liquidation.
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