Sears Chairman Eddie Lampert has submitted a revised bid of roughly $5 billion in a last-ditch attempt to save the retailer from liquidation.
Lauren Hirsch of CNBC.com had the story:
This latest attempt comes one day after Lampert’s initial $4.4 billion bid to save Sears was rejected by the company. It faced a number of challenges, including being short of covering Sears’ administrative expenses, making it “administratively insolvent.”
As part of the new bid, Lampert will assume tax and vendor bills incurred since Sears’ October bankruptcy, the person said. As with its previous bid, it will aim to keep roughly 50,000 jobs.
It could not be immediately determined whether Lampert’s bid also relies on the forgiveness of debt through a so-called “credit bid.” Sears unsecured creditors objected to the $1.8-billion credit bid that helped support Lampert’s original offer.
Should Sears accept the bid as financially viable, it will allow ESL to participate in an auction set for Jan. 14 against other buyers. Lampert’s bid is the only one that would keep Sears alive.
Jessica DiNapoli and Mike Spector of Reuters reported that the bid will be considered on Jan. 14:
The new bid, which Sears will consider during a Jan. 14 bankruptcy auction, proposes assuming up to about $300 million of tax and merchandise expenses the 126-year-old company has racked up since its Oct. 15 bankruptcy filing, the sources said.
The offer, which aims to preserve up to 50,000 jobs, also would assume up to roughly $350 million in additional Sears bankruptcy expenses, severance benefits for employees and other liabilities, one of the sources added. Sears employed about 68,000 people when it filed for bankruptcy.
Ensuring Sears can pay its expenses, which include bills for legal and financial advisers and are known as administrative claims, was a main point of contention as the company negotiated the deal with Lampert.
Lampert’s previous bid had proposed acquiring 425 Sears stores.
Lisa Fickenscher of the New York Post reported that the Jan. 14 auction may not be the final word:
The other major bone of contention, especially with the retailer’s unsecured creditors, is Lampert’s demand to be released from liabilities related to transactions ESL did prior to the Oct. 15 bankruptcy filing.
Those include the sale of Lands’ End and the sale of Sears real estate to Seritage Growth Properties, a holding company in which Lampert is a big shareholder.
The ESL bid will be compared against those from liquidation firms, including Abacus, which was selected by Sears to handle a liquidation sale.
The Jan. 14 auction will not be the final word on the ESL bid.
“The auction could last a matter of hours or days,” Ana Lucía Hurtado, senior distressed-debt legal analyst at Reorg, told The Post.
But there are a number of other hurdles before any decision is final.
The judge will determine whether to bless the sale or not by Feb. 1, according to court documents.
