Transactions - OCTOBER 10, 2018

Sears prepares potential bankruptcy filing

by Andrea Zander

Sears Holdings Corp. is preparing to file for bankruptcy, reported The Wall Street Journal.

The company has hired M-III Partners, a boutique advisory firm, to put together a possible bankruptcy filing. The news outlet reported that Sears has $134 million in debt, maturing Oct. 15.

The report details the retailer unveiling a debt-reduction plan and hiring restructuring expert Alan Carr to its board of directors to avoid a Chapter 11 filing. ESL Investments, the hedge fund managed by Sears CEO Eddie Lampert, said in a filing last month that the debt coming due was among the obligations creating “significant near-term liquidity constraints” for the company.

The September proposal includes selling off many of Sears’ remaining stores and asking lenders to exchange their loans for equity stakes in the retailer. It also includes an offer to buy Sears’ signature Kenmore appliances brand for $400 million. A special committee of the board is currently evaluating the proposal.

As of its latest quarter, Sears was operating some 900 stores (Sears and Kmart) down from 4,000 plus in 2005.

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