[ad_1]
Early Monday morning, Sears filed for bankruptcy protection after years of struggle and incessant losses. Sears said in court that the consequences of the disaster would be catastrophic if he could not repair his supply chain and maintain the flow of goods in the company's stores and warehouses.
Some 200 sellers have stopped shipping goods to its stores in the past two weeks and the company risks privileges if it can not pay the logistics companies owes millions of dollars over the next few weeks, Sears said in court documents. Toys "R" Us Inc., whose suppliers tightened the conditions and stopped the products just before last year's holiday, experienced a similar scenario.
Mr. Lampert seems determined to avoid this fate. The financier's hedge fund, ESL Investments, is expected to provide $ 300 million in bankruptcy financing to help the retailer stay in business during the holidays. ESL Investments is also in talks to buy about 400 of the most profitable Sears and Kmart stores, Sears said Monday.
At its peak, Lampert, which was formed by the merger of Sears in 2004, the store "where the America stores are located" and the big-box retailer Kmart, operated more than 2,300 stores. That number had been reduced to less than 700 after Sears Monday's deposit.
Sears announced that it would close 142 unprofitable stores by the end of the year and that liquidation sales should begin shortly. The closures add to the 46 stores that are expected to close by November.
The company currently operates 687 Sears and Kmart stores. It employs about 68,000 people.
Sears owes more than $ 5 billion to its lenders and bondholders, and paying interest alone costs the retailer $ 440 million a year. The bankruptcy took place before Sears was required to repay $ 134 million in loans later on Monday.
Sears, a US commodity since 1886, has struggled in recent years by closing stores, selling assets and borrowing money. But it was not always like that. Gordon Weil, author of "Sears, Roebuck, USA", tells the story of the retailer. Photo: Getty
About 400 stores have positive revenues and are expected to be viable, according to court documents.
"The successful sale of these viable stores as an operating company will not only save Sears and Kmart, but also preserve the employment of tens of thousands of employees," said Robert A. Riecker, CFO of society, in court documents.
A few days ago, the company had organized a $ 1.875 billion bankruptcy financing program, most of which was used to pay off existing loans, including $ 300 million in new money in addition to the bankruptcy program. similar injection of Mr. Lampert. Funding is provided by Sears' bank lenders, including
Bank of America
N / A.,
Wells Fargo
& Co. and Citibank N.A.
Even with this help, a quick bankruptcy process is needed, the company's lawyers said Monday. The company is looking to hold a sale of its assets in January and close the bankruptcy process in March.
"Sears has been fighting for some time," said Ray Schrock, lawyer for Weil Gotshal & Manges LLP representing Sears, at a hearing Monday afternoon in White Plains, New York, before the US Bankruptcy Judge Robert Drain. "It's hard to find a company that has tried so much to avoid chapter 11."
As part of the bankruptcy proceedings, Mr. Lampert left his position as General Manager but remains Chairman. Sears said it created an executive director's office and named Mohsin Meghji, managing partner of the restructuring consultancy firm M-III Partners, as director of restructuring.
Sears has received court approval to begin using the so-called "new money" portion of its bankruptcy financing. The loan will be used to keep stores open, pay employees and other standard measures.
Mr. Lampert's plan may meet with resistance.
Sears "is not so much an ice cube melting, but a puddle of water," said Andrew Dietderich, the lawyer representing investor Fairholme Capital Management LLC, headed by Bruce Berkowitz. Fairholme has a face value of approximately $ 330 million in certain of Sears' unsecured obligations.
Mr. Dietderich told the court that Fairholme was considering discussing with other creditors the review of Sears' and ESL's transactions while the retailer was owned by Mr. Lampert.
"All that I have done as an investor in Sears Holdings has been done in order to help the company and its people succeed," said Mr. Lampert in a statement provided by ESL Investments. An ESL lawyer at the hearing stated that Fairholme had approved all the transactions that had taken place.
President Trump appeared on Monday, calling the deposition "shameful" and "very sad" for members of his generation.
"Sears was a big problem when I grew up," said Trump, 72. "Sears has been dying for many years. It has obviously been mismanaged for many years. "
-Jennifer Smith
contributed to this article.
Write to Lillian Rizzo at [email protected]
Source link
