Sears Facing Liquidation With No Bids Submitted

Sears, a 125-year-old company, is the closest to death it has ever been. Sears filed for bankruptcy on Oct. 15 when it had a $134 million payment it could not meet. Now, there is a deadline of 4:00 p.m. ET Friday, Dec. 28 to submit an offer for the company.

If a bid is submitted, Sears’ advisors would have until Jan. 4 to decide whether the bidder is a “qualified bidder.” An auction for liquidation bids would take place on Jan. 14. If there is no acceptable bid, liquidators will break the company up into pieces. The liquidation process would take weeks, according to the guidelines laid out by the bankruptcy court.

Sears was once the nation’s biggest retailer, but has struggled for years with losses and debt. From 2013 through this October, Sears’ store count has fallen from 1,980 to 687, according to the company’s bankruptcy filing. Since then, the company has announced the closure of 182 unprofitable stores and is weighing the closure of 50 to 80 more.

Sears chairman, Eddie Lampert, has put forward a $4.6 billion proposal to buy the company out of bankruptcy. The $4.6 billion offer is comprised of various tranches of financing, including money from his hedge fund, ESL Investments. According to people familiar with the matter, ESL is the only party offering to buy Sears as a whole.

Lampert, who has controlled Sears for more than a decade, is Sears’ largest investor. Lampert was keeping Sears alive through complex investments from ESL, pouring billions of dollars into the company. Due to requirements by the Securities and Exchange Commission, Lampert will be required to make his bid public. As of the afternoon of Dec. 27, Lampert had neither submitted his bid, nor rounded up financing.

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