SEARS LAST CHANCE. Billionaire Edward Lampert will get one last chance to keep Sears Holdings Corp. from closing down – Todd Horwitz, Bubba Trading

 

One Last Chance

Billionaire Edward Lampert will get one last chance to keep Sears Holdings Corp. from closing down, after the retailer agreed to let its longtime leader compete in a bankruptcy auction that will decide the once-iconic department store’s fate. 

Sears, which filed for chapter 11 protection in October, plans to hold a court-supervised auction on Monday that will determine whether what is left of the 126-year-old chain is liquidated or left in Mr. Lampert’s control. The retailer’s independent board members and creditors want to wind down the business, but the hedge fund manager-turned-CEO wants to keep 425 stores open.

On Tuesday, after Mr. Lampert promised to revise his proposal, a Sears lawyer told the judge overseeing the bankruptcy case that the company would move forward with the planned auction. If Sears had rejected Mr. Lampert’s bid, there would have been no auction and Sears would have begun to liquidate.

Lampert’s hedge fund ESL Investments must pay a $120 million deposit by late Wednesday to continue pursuing the offer. If that bid is rejected, the bankruptcy court could approve liquidation by the end of this month. An ESL Investments spokesperson said in a statement that “our proposal provides substantially more value to stakeholders than would be the case in liquidation and is the only option to save an iconic American retailer.” A Sears Holdings spokesperson declined to comment.

The 126-year-old Sears, Roebuck & Co. revolutionized American capitalism and famously spawned the “everything store” concept that ultimately led to its demise, fanning across the country selling toys, tools, sofas, clothes and everything else to the country’s increasingly prosperous middle class.

But the company, long since eclipsed by retail rivals such as Walmart and Amazon, has in the last decade lost billions of dollars and closed hundreds of nationwide stores, becoming one of the most visible symbols of the fall of America’s brick-and-mortar retail empires.

Todd “Bubba” Horwitz

IN ASSOCIATION WITH

Financial Markets and Political Commentary
 

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About the author

Todd Horwitz - Author of “Average Joe Options“. Todd began his trading career in 1980 at the CBOE. He was one of the original traders in the OEX & helped start the SPX. He is a member the CME where he trades S&P futures as well as foreign currencies & is a regular contributor to CNBC, Bloomberg, BNN, Fox & many other major news networks.