Sears just got another lifeline.
In a last-ditch effort to save the ailing retailer, chairman Eddie Lampert submitted a revised bid of about $5 billion before the Wednesday deadline through an affiliate of his hedge fund, ESL Investments Inc., according to an exclusive report from Reuters.
The billionaire executive and largest investor of Sears Holdings Corp. reportedly agreed to assume up to $300 million of tax and vendor bills that the company had racked up since it filed for Chapter 11 bankruptcy protection in October. The offer also included a $120 million deposit, of which more than $17 million could be nonrefundable.
The latest development in the Sears saga came a day after Lampert’s initial bid of $4.4 billion failed to meet requirements and was considered “administratively insolvent.”
Following an extended hearing on Tuesday in the United States Bankruptcy Court for the Southern District of New York, Judge Robert Drain gave Lampert a second chance to save the beleaguered retailer. The executive remains Sears’ largest investor, with ESL loaning the company more than $2.4 billion in financing over the last several years.
Similar to the previous proposal, the revised version would prevent the 126-year-old business from liquidating its assets while maintaining operations at 425 stores and retaining 50,000 employees. It allows Sears to mull over next steps as the company prepares to hold an auction for its assets on Monday, where it will weigh Lampert’s offer against liquidation bids that could break up Sears into pieces as well as shut down all department stores and lose tens of thousands of jobs.
In the event of liquidation, Sears has already hired Abacus Advisory Group LLC to help manage its remaining assets, including inventory, store fixtures and equipment.
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