Sears Holdings’ independent directors have rejected the current $4.4 billion bailout offered by chairman and former CEO Edward Lampert, increasing the possibility the retail icon has reached the end of its 126-year road, according to reports from CNBC and Reuters.
The company will ask a bankruptcy judge for permission to shut down at a court hearing today, the news sources reported. However, Reuters and The Wall Street Journal said it is possible that the company will again get a last-minute reprieve, or just possibly stay its execution a little bit. They reported that Lampert has been working on possibly improving his bid, and bankruptcy judge Robert Drain could give him an extension to keep working on it.
(Update: On Tuesday, Judge Drain gave Lampert until Wednesday at 4 p.m. to submit a better bid.)
The bid from ESL, Lampert’s company, was the only offer the retailer received before the Dec. 29 deadline.
Sears’ closing would affect around 500 stores and more than 68,000 employees. It will also mean the liquidation of another retail icon, Kmart, which Sears purchased in 2005.
Sears Holdings filed for Chapter 11 on Oct. 15. At the time of its filing, its balance sheet listed $6.94 billion in assets and $11.34 billion in liabilities, and it was unable to meet a $134 million debt payment.
The Sears bankruptcy saga has drawn attention from the industry, as jewelry vendors were nervous that the company would not recognize their rights to consignment merchandise. However, that matter was quickly settled in a court ruling in October, avoiding what would have most likely been a lengthy court battle on the issue.
Sears originally began as a jewelry company. In 1886, Richard W. Sears purchased unwanted watches from a Minneapolis jeweler and sold them to coworkers. He eventually partnered with watchmaker Alvah C. Roebuck to form a jewelry and watch company that would target underserved rural areas via a mail-order catalog. The retailer eventually expanded to a brick-and-mortar retailer that stocked a wide variety of items, leading some to dub it “the original everything store.”
Its bankruptcy papers can be seen here.
(Image courtesy of Sears Holdings)