[ad_1]
Sears Holdings was given permission yesterday to sell hundreds of its top-performing stores to avoid liquidation.
The OK Sears plan decision, ruled Thursday by Justice Robert Drain of the US Bankruptcy Court for the Southern District of New York, marks the victory of former CEO Edward Lampert and his hedge fund, ESL Investments.
Sears maintained that the company had more value if it stayed in business by selling its stores. Lampert and ESL, Sears' largest shareholders and lending Sears more than $ 2.5 billion before filing for bankruptcy, are currently preparing an offer for certain sites.
A group of unsecured creditors of the retailer is fighting the move. Creditors, including Simon Property Group and other shopping center owners owning Sears stores, have argued in court that Sears would be wasting hundreds of millions of dollars if it were allowed to continue its business instead of forcing it to liquidate its assets.
Creditors doubt that the remaining stores are viable and believe that an offer by Lampert and ESL "could be part of an extended behavior that would have benefited some shareholders," according to documents filed by the court. They want to see if the hedge fund and its partners have benefited from a larger portion of Sears' debt, which has allowed them to "recover value" from Sears and "to exert undue influence" on the record bankruptcy.
Lampert and ESL countered, claiming in a document that the renters were trying to take advantage of the bankruptcy to evict Sears and modernize their malls.
When the parent company of Hoffman Estates-based Kmart and Sears stores asked for Chapter 11 protection in October, Sears said it would try to reorganize itself by finding a buyer for its 400 or so profitable stores. The company had previously announced the closure of about 180 Sears and Kmarts unprofitable.
The retailer's lenders promised him an initial $ 300 million bankruptcy loan to keep the stores open during the holidays. Earlier this week, Sears secured $ 350 million in additional financing from Great American Capital Partners, a subsidiary of the Great American Group liquidator.
The court's approval of the Sears sales plan requires it to find a first bidder by December 15. Other potential buyers would have a deadline of December 29; an auction, if necessary, would be held on January 14th.
Sears also received court approval to proceed with the sale of its home improvement business, which received a $ 60 million offer from Service.com. An auction will be held on December 13 if other bidders come forward.
…
Source link
