Categories Consumer, Earnings, LATEST, Retail

Relief for Sears after chairman’s buyout bid gets court nod

The uncertainty over the fate of embattled retailer Sears Holdings (SHLD) eased slightly Tuesday after a bankruptcy judge allowed hedge fund ESL Investments, owned by the department store’s chairman Edward Lampert, to go ahead with the plan to acquire the company.

The order came as a big relief for Sears, which has been on the verge of liquidation after all the efforts to salvage it failed. Last week, Lampert’s $4.4-billion offer to acquire the store chain suffered a setback after it faced resistance from the company’s management. Also, there has been no clarity on how he is going to fund the deal.

The crisis took a new turn this week after Sears failed to pay the bankruptcy expenses to its legal consultants, and the management decided to inform the court about its objection to Lampert’s offer.

The order came as a big relief for Sears, which has been on the verge of liquidation after all the efforts to salvage it failed

As per the court’s directive, ESL has to deposit $120 million before Wednesday evening to avoid the liquidation process. The next step will be the auction, to be held early next week, at which ESL will compete with the other bidders, which will be followed by the final approval by the court by month-end.

The downfall of Sears is a classic example of how traditional American retailers are being crushed by the growing competition and the rapid adoption of e-commerce, an area dominated by Amazon (AMZN) and Walmart (WMT).  Experts are of the view that more Sears stores will be closed soon, irrespective of the final outcome of Lampert’s acquisition bid.

Sears liquidation looms closer than ever

Being unable to operate its remaining outlets, which once formed part of a huge store network, the company was forced to file for bankruptcy protection in October last year. Of late, the more-than-a-century-old retail store chain has been rapidly shrinking amid operational losses and mounting debt.

When Lampert came up with the initial offer of $4.6 billion in early December, it was seen as the last chance for Sears to survive. The offer also gives some hope to suppliers and lenders who are currently apprehensive about the future of the company.


Follow our Google News edition to get the latest stock market, earnings and financial news at your fingertips

Most Popular

Key highlights from Autodesk (ADSK) Q4 2021 earnings results

Autodesk, Inc. (NASDAQ: ADSK) today reported its fourth quarter financial results for the period ended January 31, 2021. Net income for the fourth quarter was $911.3 million, or $4.10 per

Infographic: Beyond Meat (BYND) reports wider Q4 loss; Revenue up 4%

Beyond Meat (NASDAQ: BYND), a specialist in plant-based meat substitutes, Thursday reported a wider loss for the fourth quarter, despite an increase in revenues. The numbers also missed the consensus

Virgin Galactic stock tanks on delayed test flight

Virgin Galactic (NYSE: SPCE) reported fourth-quarter 2020 financial results after the regular market hours on Thursday. The space tourism company reported zero revenue in the fourth quarter, compared to $529,000


Add Comment
Viewing Highlight