Sears To Close After 126 Years

After 126 years in business as an iconic American retailer, Sears Holdings has reportedly turned down a bid by Chairman Eddie Lampert to help it stay open. But Lampert’s hedge fund, ESL Investments, reportedly wants to challenge the decision per unnamed sources with knowledge of the situation, CNBC reported.

The hedge fund will reportedly refer to the advisory fees incurred by Sears over its bankruptcy, which are said to make up a portion of the retailer’s administrative expenses. But unnamed sources in the report indicated that the move will reportedly put the retailer, which has over 50,000 employees in the ranks, closer to liquidation. The retailer reportedly intends to make its liquidation plans known on Tuesday morning (Jan. 8).

Last week, according to CNBC, the company’s advisors revealed that it would give ESL until Tuesday morning to revise the bid before announcing a decision, but there are several obstacles in the way. The biggest issue blocking the deal is the $1.8 billion Lampert added to his offer by forgiving ESL debt owed through a credit bid. The restructuring committee advising Sears has concerns about whether or not the bankruptcy judge will allow Lampert to use a credit bid without looking at a pending investigation about the company’s transactions that occurred when he was at the helm.

In addition, the money is not enough to cover the fees and vendor payments owed, so Sears considers it “administratively insolvent.”

If the two sides can’t come to an agreement, Sears – which hasn’t turned a profit since 2010 – will have to liquidate. The retailer, which started in the 1880s as a mail order catalog and was once the biggest department store chain in the country, has been brought down by online and offline competitors, as well as the 2008 financial crisis. Sears had 68,000 workers and 687 locations at the time of its Chapter 11 bankruptcy filing in October.