Hold that funeral!
Bankrupt Sears Holdings appears to have escaped what some saw as a near-certain liquidation—after chairman Edward Lampert’s company won a Jan. 14 auction for its assets.
Last week, the company rejected a $4.4 billion bid from Lampert’s company, ESL. Without any other bidder vying to keep it open, some thought it would have no choice but to close its doors. However, on Jan. 8, New York Judge Robert Drain gave Lampert a day to sweeten his offer. His revamped bid, which reportedly topped $5 billion, has now been accepted by the company, according to reports on CNN, the Associated Press, and several other news sources.
Sears is due to report the auction winner at a court hearing today, the reports said.
A CNBC report noted that, like the earlier reports of a liquidation, the company’s continued survival is far from guaranteed.
It quoted sources as saying that its unsecured creditors committee currently opposes the Lampert bid, in which case Drain would have to rule on whether to accept it.
If Sears does survive, it will be a much smaller company. At the timing of its filing, it numbered 687 stores and aimed to close nearly 150. Lampert has said he envisions the eventual chain to number about 400 stores.
At its peak, in 2011, Sears had 4,000 stores.
Sears Holdings also owns Kmart, which it purchased in 2005.
The company filed for Chapter 11 in October. At the time, Lampert served as both chairman and CEO, but stepped down as CEO. Through various holding companies, he reportedly owns about 49 percent of the company’s stock.
The company has not been profitable since 2011. In the last quarter it reported financial results, the second quarter ended Aug. 4, it said that total same-store sales fell 3.4 percent, though jewelry was one of the sectors that reported positive comps.
Sears Holdings currently employs 68,000 people. Its bankruptcy papers can be seen here.
(Image courtesy of Sears Holdings)