Sears Trustees Consult Evercore to Review Bids from Former Lampert CEO: Sources

(Reuters) – Two directors of the Sears Holdings Corp SHLDQ.PK board of directors have hired Evercore Investment Bank Inc. (Reuters)EVR.N) to closely examine Sears' former CEO Eddie Lampert's dealings with the US retailer before filing for bankruptcy protection, officials close to the case said Friday.

Transactions, including the segregation of activities and real estate from Sears, may be subject to review during a bankruptcy proceeding, with creditors demanding transactions robbing the retailer of valuable assets. Billionaire Lampert is Sears' largest shareholder and creditor through its hedge fund, ESL Investments Inc.

"ESL has supported the council's decision to authorize the revision," said a spokesman for Lampert's hedge fund. "These types of analyzes are customary and ESL is confident that the Subcommittee will confirm that the transactions involving ESL were conducted on fair and reasonable terms and approved in accordance with the government's procedures." 39, appropriate enterprise ",

Sears, who filed for Chapter 11 on Oct. 15, and Evercore declined to comment.

Sears directors, Alan Carr and Bill Transier, who joined the retailer's board earlier in October, would work with Evercore to review the deals and decide if there was any reason to sue Lampert, according to the documents. of the bankruptcy court filed last week and the sources who asked not to be identified because the role of Evercore is not yet official.

In addition to the directors, Lampert will likely face an investigation by the Sears Unsecured Creditors Committee, a group selected by a government bankruptcy watchdog in most cases, the sources said. The committee includes the owners of Sears, the US government that oversees the remaining retirees, sellers and bondholders' representatives.

In addition to the directors, Lampert will likely face an investigation by the Sears Unsecured Creditors Committee, a group selected by a government bankruptcy watchdog in most cases, the sources said. The committee includes the owners of Sears, the US government agency that oversees the remaining retirees, sellers and bondholders' representatives.

Lampert organized Sears' merger with the Kmart discount chain in 2005. Since then, he has led numerous transactions involving the retailer, including the separation of approximately $ 2.7 billion from his real estate in Seritage Growth. Properties (SRG.N).

In recent years, ESL has made rescue loans to Sears, which had lost billions of dollars and had fallen behind in competition with discount retailer Walmart Inc. (WMT.N) and the Amazon.com Inc e-commerce company (AMZN.O). Sears now owes about $ 2.6 billion to Lampert and owns almost half of the company.

The hiring of Evercore remains subject to court approval. The committee also hired the law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP to help revise the agreements, according to documents filed by the court.

Sears is also seeking financing in the event of bankruptcy to avoid liquidation. The retailer has postponed a hearing on a loan on which Lampert was in talks and has not given a new date, according to court documents.

LONG HISTORY OF OFFERS WITH SEARS

Andrew Dietderich, attorney representing Sears Creditor, Fairholme Capital Management LLC, said the company's many transactions over the years had resulted in a slowdown in bankruptcy.

"These cases are the last mile of a multi-year liquidation, without bankruptcy," Dietderich told the US Bankruptcy Court in White Plains, New York. Bruce Berkowitz, founder of Fairholme, left the Sears Board of Directors in 2017.

Creditors can claim that transactions put in place before a bankruptcy have deprived them of value and have pre-empted legal proceedings to determine their repayment.

"Your honor, all the transactions that took place here took place under the strictest control of corporate governance," said ESL lawyer James Bromley at the court hearing. from last week 's bankruptcy, adding that Fairholme' s representatives sat on the Sears Board of Directors. several transactions.

Lampert now offers to buy more financially healthy Sears stores at a bankruptcy auction, after offering to buy out the company's real estate, the Kenmore appliance brand and the service trade. out of court earlier this year.