Sears, the Amazon of its day, files for bankruptcy

Ivan Schwartz
October 15, 2018

Its debt to Pension Benefit Guaranty Corp, a US government agency overseeing the retirement benefits of former Sears workers, was not disclosed in the bankruptcy filing. He made several debt deals that kept Sears afloat but didn't appear to have a strategy to turn the company around.

Rosenblum told The Post that those with the most to lose from Sears' end will be the workers who stand to lose their pensions and jobs. The company also has $269 million available to it from lenders, according to figures it released on September 13.

Sears shares were trading down 14 percent in pre-market trading on Monday at 35 cents, giving the company a market capitalization of just $35 million.

The filing, which is happening ahead of the crucial holiday shopping season, comes after rescue efforts engineered by Lampert have kept it outside of bankruptcy court — until now.

Judge Robert Drain will oversee the bankruptcy, with Sears represented by the law firm Weil Gotshal & Manges, according to court documents.

The company says in its release that it intends to continue payment of employee wages and benefits, honor member programs, and pay vendors and suppliers in the ordinary course for all goods and services provided on or after the filing date. One of Sears' major shareholders recently dumped a chunk of his stock for pennies on his original investment. The company added a new director who is familiar with bankruptcies and restructuring.

And reports are swirling that the company is talking to advisers and banks in preparation for a bankruptcy filing. ESL Investments is also Sears' largest stockholder and creditor.

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Sears said it has received a $300m financing package to fund its operations during the bankruptcy proceedings and was negotiating an additional $300m. Usually, funding is secured well before the final days.

A spokeswoman for the mall's parent company, Washington Prime Group Inc., on Friday said the mall is in "active negotiations to transform" the space.

Sears Holdings, which owns Sears and Kmart chains, is expected to file for federal bankruptcy in NY early this morning, October 15. It could attempt to emerge as a profitable company.

But the onset of discounters like Walmart created challenges for Sears that have only grown and it faced even more competition from online sellers and appliance retailers like Lowe's and Home Depot. The company issued a statement saying it intends to stay in business, keeping stores that are profitable open, along with the Sears and Kmart online shopping sites. A long series of store closings has left it with fewer than 900 today.

A Sears Essentials store in Palatine, Illinois.

Sears said it will sell assets and begin closing 142 unprofitable stores by year-end with the aim of reorganizing around a smaller platform of around 700 of its best stores.

As of August, the 132-year-old company had 506 locations, including 482 full-line department stores, as well as 360 Kmart stores, according to a public filing.

Other reports by GizPress

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