Sears Holdings has something looking over the company’s shoulder as it attempts to sell its Kenmore appliances brand.
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That something is the US government body that oversees the pensions for the company's 100,000 retirees.
Sears Chief Executive Eddie Lampert's hedge fund, ESL Investments, submitted bids last week of $400 million and $70 million for Kenmore and the department store's home improvement business, respectively.
The government agency known as the Pension Benefit Guaranty Corporation (PBGC) plans to use its right to effectively veto the Kenmore sale in order to negotiate a share of the anticipated proceeds from Sears, according to people familiar with the matter who requested anonymity to discuss confidential deliberations.
A spokeswoman for the PBGC declined to comment on the sale of Kenmore, known best for its refrigerators and washer and driers. But she said in a prepared statement to Reuters that the Sears financial situation continues to be monitored.
The PBGC move a tactic it used last year with Sears, when it won future cash payments from the company in exchange for agreeing to the sale of Sears' Craftsman tool line.
The PBGC, funded in part by insurance premiums paid by companies, is responsible for covering workers' pensions if their former employer cannot.
The PBGC's stance could jeopardize Sears' efforts to raise money to stay in business, according to Reuters.
Sears retirees' pensions face their own funding shortfall of $1.5 billion.