Sears CEO steps in for bankruptcy financing

Cornelia Mascio
Ottobre 15, 2018

Sears has hired M-III Partners, a boutique advisory firm specializing in seeing companies through bankruptcies and restructuring, according to the Wall Street Journal.

Sears revealed Tuesday night that investor Bruce Berkowitz of Fairholme Capital Management dumped 142,000 shares of Sears in the last few days, for only 59 cents to 65 cents a share. Sears has a $134 million loan payment due on Monday, meaning it's roaring into the bankruptcy station at full speed.

The most recent filing from Sears showed it had only $193 million in cash on hand as of August 4, the end of its last fiscal quarter. The company also has $269 million available to it from lenders, according to figures it released on September 13. Reports circulated that the company is talking to advisers and banks in preparation for a bankruptcy filing. The troubled retailer has been a runaway train of woe for years as customers fled and sales plummeted, but it has managed to avoid running off the rails primarily because chairman and CEO Eddie Lampert has continuously loaned it money to keep the lights on.

A representative for Sears, which is based in Hoffman Estates, Illinois, didn't immediately respond to a request for comment.

If Sears does file for bankruptcy, it could try to stay in business, using the court process to shed debt and unaffordable leases. It could attempt to emerge as a profitable company.

American consumers are now lamenting the loss of one of the country's most famous retailers, which at one point was the world's largest. But its declines goes back decades, well before the growth of online shopping that threatens traditional brick-and-mortar retailers. A long series of store closings has left it with under 900 today. Seeded with hundreds of Sears properties at the separation, as Sears has closed stores, Seritage has been able to raise rents threefold to new tenants. The company recently announced another 46 store closings that will take place just before the start of the holiday shopping period.

The idea is to prop up Sears while the company searches for a buyer, according to the report, which cited unnamed sources.

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