Published: Wed, January 09, 2019
Business | By Eloise Houston

USA retail giant Sears considers takeover bid after liquidation threat

USA retail giant Sears considers takeover bid after liquidation threat

Lampert's $4.4 billion offer does not complete the sale, but rather starts an auction that is due to be completed on January 14.

"Sears Holdings Corp will ask a bankruptcy judge on Tuesday if it can proceed with liquidation after it could not reach an agreement on Chairman Edward Lampert's $4.4 billion takeover bid, casting doubt on the survival of the 126-year-old USA department store", Reuters exclusively reported Tuesday, citing sources familiar with the matter. That raised concerns in the negotiations since the maneuver might not be allowed in court, the sources said, given ongoing investigations of Lampert's pre-bankruptcy deals, which the hedge fund manager maintains were proper.

Sources told Reuters the company's board will ask a bankruptcy judge on Tuesday for permission to liquidate, closing all of its hundreds of remaining stores and selling off all its assets across the country. But many retailers end up going bust after filing, despite plans to stay in business.

Sears filed for bankruptcy protection on October 15, 2018. In recent years, Toys "R" Us, RadioShack and Sports Authority have followed that path to the graveyard.

Sears Holdings has rejected Chairman Eddie Lampert's bid to save the 126-year-old company, setting the storied retailer with more than 50,000 employees on a path to liquidation, CNBC reported, citing sources familiar with the matter.

"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.

He also offered to forgive more than $1 billion in debt he is owed by Sears from earlier loans he made to the company.

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.

If Sears doesn't accept the $4.4 billion bid, Transform Holdco said it also would bid individually on some assets, including real estate, certain intellectual property and the Sears Home Services business.

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