Friday is yet another big day for former Sears CEO Eddie Lampert.
The bankrupt retailer and its independent board of directors will decide by Friday whether Lampert’s multi-billion dollar bid to keep hundreds of store locations open is qualified under procedures approved by a bankruptcy court.
Last Friday, Lampert submitted a $4.4 billion bid through a subsidiary of his hedge fund ESL Investments to keep 425 stores open and 50,000 people employed. The bid includes financing from three institutions. Meanwhile, two teams of liquidation firms have also submitted bids to dissolve Sears and sell it in parts, as reported by The Wall Street Journal.
Lampert’s bid could save the retailer from liquidation. However, if it doesn’t get approved on Friday, he does have a backup plan.
In the event that Lampert cannot succeed in keeping the 425 stores open, ESL will place a $1.8 billion bid – through Transform Holdco LLC – for Sears’ real estate, the hedge fund detailed in documents released on Wednesday. This option would keep just 250 store locations open.
Even if Lampert’s initial bid is approved, the board would still have to decide whether that offer is better for the company and creditors than the liquidation offers, according to the Journal.
Sears filed for bankruptcy in October and has since shuttered hundreds of stores as it attempts to restructure and return to profitability. As part of its bankruptcy deal, the once iconic retail chain said it would close more than 170 of its 700 stores by the end of the year. Last week, Sears announced plans to shutter an additional 80 store locations in March.
At its peak, Sears operated nearly 4,000 stores.
Sears has been spinning off profitable brands – like Craftsman – to keep it afloat throughout a restructuring process.
The retailer – once the country’s largest – has not posted a profit since 2012.