Sears Takeover Bid Fails, Asks Bankruptcy Judge To Liquidate

Daniel Fowler
January 9, 2019

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.

In various documents, Sears itself acknowledged the problem, previously noting more than 200 suppliers have stopped or refused to ship merchandise to the company in the two weeks heading into bankruptcy, further crippling its business.

Lampert's offer did not include putting up cash to back the credit bid.

It also closes the curtain on Kmart, which is owned by Sears Holdings. A hearing planned for 10 a.m. didn't actually get underway until after 1 p.m. because attorneys were huddled to discuss details of the bid.

Lampert touted his merger of Kmart and Sears as laying the groundwork for their revival, a scenario that did not work out, and had the hedge fund manager relinquishing his role as CEO just after Sears filed for bankruptcy protection last fall.

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Sears' lawyers said a revised bid will require Mr Lampert to make a $120m (£94.4m) down payment, through his hedge fund, by 4pm NY time on Wednesday.

Since Sears filed for Chapter 11 bankruptcy protection October 15, Lampert has been fighting to keep a few hundred Sears and Kmart stores open. Under changes in the bid reached in negotiations, he will have until Wednesday afternoon to make a $120 million cash payment.

Even though no other bidders stepped forward, Sears Holdings' board decided the offer wasn't good enough since almost a quarter of it was in the form of debt forgiveness.

Unsecured creditors have pushed for Sears to liquidate, partially because they contend they will realize a better financial recovery if it does.

Lampert and his hedge fund argue the loans were proper and made to keep Sears alive. 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.

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